How can you avoid common mistakes when choosing a franchise location?

1 Know your target market

Before you start looking for a location, you need to understand who your target customers are, what they want, and where they are. You can use various tools and methods to research your market, such as surveys, interviews, focus groups, online analytics, and competitor analysis. You should also consult your franchisor, who may have valuable insights and data on the demographics, preferences, and behaviors of your potential customers. Knowing your target market will help you narrow down your options and select a location that matches their needs and expectations.

2 Evaluate the competition

Another factor you need to consider when choosing a franchise location is the level and type of competition you will face. You should avoid areas that are saturated with similar or superior businesses, as they will make it harder for you to attract and retain customers. You should also be aware of any emerging or potential competitors that may enter your market in the future. On the other hand, you may benefit from locating near complementary or compatible businesses, such as those that offer different products or services to the same customer segment. You should analyze the strengths and weaknesses of your competitors, as well as their locations, prices, promotions, and reputations.

3 Assess the site characteristics

Once you have identified some possible locations, you need to assess their physical and operational characteristics. These include the size, layout, condition, and accessibility of the site, as well as the availability of parking, utilities, signage, and security. You should also check the zoning, licensing, and leasing requirements and regulations of the site, as well as the costs and terms of the contract. You should visit the site at different times and days to observe the traffic, footfall, visibility, and noise levels. You should also talk to the neighbors, landlords, and local authorities to get a sense of the area's reputation and potential.

4 Follow the franchisor's guidelines

Another mistake you can avoid when choosing a franchise location is ignoring or violating the franchisor's guidelines. Your franchisor may have specific criteria and standards for selecting and operating a location, such as the minimum size, design, equipment, and layout. Your franchisor may also have exclusive or protected territories that prevent you from locating too close to another franchisee or competing with them. You should follow the franchisor's guidelines carefully, as they are designed to ensure consistency, quality, and efficiency across the franchise network. You should also communicate with your franchisor regularly and seek their approval and support for your location choice.

5 Do a feasibility study

Finally, before you commit to a location, you should do a feasibility study to determine if it is viable and profitable. A feasibility study is a comprehensive analysis of the market, financial, and operational aspects of your location choice. It helps you estimate the demand, revenue, expenses, and risks of your location, as well as the return on investment and break-even point. You should use realistic and reliable data and assumptions to conduct your feasibility study, and compare different scenarios and alternatives. You should also consult your franchisor, accountant, lawyer, and other experts to verify and validate your findings.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?