Choosing The Perfect First Franchise Location
We all know the old real estate adage "Location, Location, Location", and for any business, selecting the right location in which to operate can be crucial to commercial success. And for a franchisor looking to launch their initial expansion plans, selecting the right geographical location for the first units or franchisee sites will be a crucial factor in determining how their franchising business journey progresses.
What factors and criteria should an emerging franchisor consider when deciding where to stick that first pin in their franchise location map?
Identify Target Audience and Demographics
Based on their knowledge and experience of the core product or service that the brand delivers, the franchisor should already have this information at their fingertips. What factors such as age, income, lifestyle and other preferences will make the population in any particular geographical area the ideal consumer and target audience for the brand? Are there particular tastes, trends or cultural factors which would make a particular region a perfect location for the brand, or conversely be an area where the business is unlikely to be a winner.
Location research
A set of key site selection criteria - a "wishlist" for the perfect franchise location - will be invaluable in narrowing down the number of potential areas, but what those criteria are will of course vary from brand to brand. Does the franchise require a physical space or presence and in which case, of what size? Does it need to be in an area of high footfall? Are there any access requirements? Would an out of town or high street location be required? What are the cost and budgetary requirements? Getting the site selection criteria nailed down will not only make the task of finding that perfect first franchise location much easier, but will also be a vital tool when moving forward with future expansion plans.
Proximity
For many emerging franchisors, setting up their first franchise location close to home makes perfect sense. Not only are they likely to have prior local knowledge to assist with site selection and possess the advantage that the brand may already be known and have a following in the area, it also means that they can be close on hand to help and support the new franchisee in the initial stages of their business journey, and to tackle any unforeseen challenges or problems too.
Competition
Assessment of any competition should always be a crucial part of any strategic location decision. Selecting a geographical location where the market is already saturated with similar offerings may not make commercial sense. That said, healthy competition isn't always a negative - other businesses offering comparative products or services locally will likely indicate a demand in the area that could be tapped in to. And of course, entering a market as the very first brand in a particular industry also can present its own challenges in winning the hearts and minds of consumers and persuading them to become the first adopters of the product or service.
Cost
It might look like the perfect first franchise site but cost needs to be the overriding consideration and can be a deal-breaker. The commercial success and profitability of the first franchise location is crucial to the franchise growth story - it should become the blueprint and benchmark for the expansion of the brand going forward and so making sure that the figures stack up is crucial.
Just as when making any significant business decision, doing full and proper research and due diligence when deciding where to launch a first franchise location is vital. But find the right site that ticks all of the boxes and that will play a pivotal role in the entire brand's success story.
