No matter how wonderful the business (or franchise) concept is, if the location is bad, YOU’RE TOAST!
The fact that a location “feels right” is not sufficient reason to commit to a lease.
Location-selection should be a disciplined exercise that takes into account the “Key Location Criteria” that you (or the franchisor) have determined are critical to the success of the business. The criteria will probably be weighted and will include items such as: Ideal size; Ideal frontage; Passing trade – people per hour at the “critical” hours; maximum rental; required site-services etc.
If it’s a franchise which has multiple units operating, this tool should be an integral part of the franchisors toolkit. However, its mere existence does not necessarily mean that it’s any good!
The first thing that you should ask for is to see the Checklist so that you can determine whether one exists. If it does, you should determine whether your location has been selected using information that is relevant to the items on the checklist.
Now go and look at other locations that the franchisor has selected. Have a chat to the franchisee or his staff. Pop in to other businesses in the area and have a chat.
Find out what may be happening in the area that you do not know about and that may have a huge effect on any business in the future – Example: where a retail business relies on tenants of nearby buildings for patronage, and a major tenant with hundreds of employees is “moving out” in a years time! You’ve got to know this kind of information.
There’s a fundamental rule in retail – As long as there are enough feet, you have a chance. Don’t land up with a location that has insufficient passing trade, or the incorrect passing trade. It is much more expensive to get people to come to you from far away, than to “attract them in if they’re already at your store-front.
Finally, as Location is such an important issue, you should consider employing the services of people knowledgeable in the industry to conduct an independent assessment of the proposed location.
The alternative is … Blood, Sweat and Tears (and it has nothing to do with Rock & Roll).
Michael Marcus – The Franchisees Advocate Group
Saving Franchisees. Assisting Independent Business. BEFORE it’s too late!
The Franchisees Advocate Group - Australia
Business and Franchise Help - Australia
Re: It’s The “location” Stupid!
Thank you for these observations, Michael.
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