LOCKING IN A LOCATION

What you need to know about finding and researching a site for your franchise.

Search carefully for the right site to establish your franchise

outlet and you will be well set to build your business.

How can you maximise the profit of your franchise? First of all, it needs a saleable product or service that can bought at the right cost; it takes initiative and hard work to develop and maintain a good reputation; it takes financial nous to manage costs and cashflow; and, of course, it takes the right location.

An advantage of investing in a franchised business is the experience that comes into play in choosing a site: a good franchisor understands what makes a franchise success, and will turn down overpriced premises.

Many a franchisor has experienced how hard it is to find locations to develop their franchise networks. It is a delicate balance of availability, accessibility, business competition, services and cost.

It can be tempting to act instantly when a commercial opportunity arises, but rushing into premises that prove ultimately unsuitable is not wise.

One challenge might be finding a location at just the time you are ready to buy a franchise. That might well guide your choice of whether or not to buy an available business that is already established, or seek a brand new site.

When it comes to new or greenfield sites, find out if the franchise chain you are interested in has a site selection policy. Some franchisors will take on this task, others will give guidance and insist on final approval, and some franchise companies leave the decision to franchisees.

You will know what suits you best and what skills you have to spot and negotiate the right venue. If this is not your strength, you could bring in expert help from an independent advisor.

SAME PRINCIPLES

If you are considering buying an existing business, apply the same rigorous principles of site evaluation, particularly if it is a retail outlet. An established business will be able to supply trading figures you can use to work out the viability of the business in its present location.

Underperformance might indicate poor management and leadership from the outgoing franchisee, or it may be in the wrong location to maximise its potential.

As a franchise you will need to run your business efficiently, so some of the considerations will include: NEIGHBOURHOOD Is it a desirable area your customers will want to visit? Does it suit the profile of the business? Is it a suburb that is booming or fending off a decline? Does it have the right zoning for your business activity? PERSONAL How far do you want to travel each day to get to and from work? This is particularly pertinent when you are starting out and putting in long hours to establish the business. COMMUNITY Are you already part of the local community with contacts you can leverage as you build the business? It the site is elsewhere, will it be easy for you to establish connections with businesses and charities in the area?

It is worth taking a helicopter view as well, looking at how the new site would work within the network.

Consider:

• The franchisor’s expansion strategy

• How the location will fit into their plans

• What level of support will be available to you if you are, for example, the first interstate franchisee.

Your choice of location will have a significant impact on the success of your business, and buying a franchise will give you a head start in picking the right site.

Rushing into premises that prove ultimately unsuitable

is not wise.