5 WAYS TO SE­CURE THE BEST SITE

Pick the top spot for a fran­chise busi­ness and pay the right price.

Inside Franchise Business - - Contents -

Pick the top spot for a fran­chise busi­ness.

1. UN­DER­STAND THE BRAND’S

CUS­TOMER BASE

A pas­sion for the brand you are about to in­vest in needs to be bal­anced by clar­ity about who the cus­tomer is, why he or she buys the prod­uct or ser­vice, and the best way to de­liver it.

Con­sider whether the cus­tomer base of the lo­cale you are re­search­ing has a home-grown de­mo­graphic that meets the busi­ness needs, or whether cus­tomers will be trav­el­ling to the des­ti­na­tion. If so, can they eas­ily ac­cess the out­let? Are there neigh­bour­ing busi­nesses that will help at­tract and keep your tar­get cus­tomer?

2. RE­VIEW CUS­TOMER TRAF­FIC FLOW

There are sta­tis­tics avail­able from shop­ping cen­tres on their traf­fic flow, but noth­ing beats be­ing on the ground and ob­serv­ing for your­self when and how cus­tomers ac­cess a busi­ness, whether or not they pur­chase, and the length of time they spend on site. It’s worth in­vest­ing the time to do some solid re­search on this.

A seem­ingly top spot can re­veal its weak­nesses when you look at whether or not cus­tomers are drawn to the busi­ness or walk straight past – and the rea­son why.

3. EVAL­U­ATE RENTAL COSTS

If all the re­search points to a good po­si­tion for the busi­ness then it’s time to num­ber crunch. On top of the rent there may be ini­tial fitouts to pay for. Land­lords can be flex­i­ble over costs and can of­fer rent-free pe­ri­ods, for in­stance, but it’s cru­cial to take an ob­jec­tive view on whether or not the costs can be eas­ily met by the busi­ness you will be op­er­at­ing.

4. CHECK LEASE TERMS

It’s ideal if a fran­chise term and lease agree­ment co­in­cide. In­ves­ti­gate the lease re­newal terms, any ex­tra costs, and what you will have to make good when you leave the busi­ness. Will the land­lord de­mand re­fur­bish­ment of the site after a num­ber of years? If so, when is that due? If this is a brand new site, will the land­lord’s de­mands on how the out­let looks fit with what the brand re­quires?

5. SEEK AD­VICE

Turn to the ex­perts for help in pick­ing the right site. Many franchisors will want to be in­volved in the site se­lec­tion or have a team that can sug­gest ap­pro­pri­ate lo­ca­tions. There are leas­ing agents who can help ne­go­ti­ate good rental deals. Lawyers and ac­coun­tants can re­view the rel­e­vant doc­u­ments and of­fer feed­back on the vi­a­bil­ity of any deals.

Other fran­chisees within the brand might also of­fer their tips on why their lo­ca­tions work – or why they don’t – and how to avoid pay­ing so much for a prop­erty that you can’t get a re­turn on your in­vest­ment.

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