How can you conduct a feasibility study and site selection analysis for your franchise location?

1 Feasibility study

A feasibility study is a preliminary assessment of the market potential, demand, competition, and profitability of a franchise location. It helps you determine if your franchise concept is suitable for the area, if there are enough customers who can afford and want your products or services, if there are any legal, regulatory, or environmental issues that might affect your operation, and if you can expect a reasonable return on your investment. To conduct a feasibility study, you need to gather and analyze data from various sources, such as demographic reports, industry trends, customer surveys, competitor analysis, trade area maps, and financial projections. You can use online tools, such as Franchise Navigator or Franchise Grade, to help you with this process, or hire a professional consultant to do it for you.

2 Site selection analysis

A site selection analysis is a more detailed evaluation of the specific location or property that you are considering for your franchise. It helps you compare and rank different options based on criteria such as visibility, accessibility, traffic, parking, signage, size, layout, rent, utilities, maintenance, security, and compatibility with your franchise standards and requirements. To conduct a site selection analysis, you need to visit and inspect each potential site, measure and record its features and conditions, check its zoning and permitting status, negotiate with the landlord or seller, and estimate the costs and benefits of each option. You can use online tools, such as LoopNet or CoStar, to help you with this process, or hire a professional broker to do it for you.

3 Location validation

Once you have narrowed down your choices to one or a few locations, you need to validate your decision by getting feedback from your franchisor, your customers, and your peers. Your franchisor can help you verify if the location meets their standards and expectations, and if they approve of your site selection. Your customers can help you test the market demand and preferences for your location, and if they are willing to patronize your franchise. You can use online tools, such as SurveyMonkey or Google Forms, to create and distribute customer surveys, or conduct focus groups or interviews. Your peers can help you learn from their experiences and insights, and if they have any advice or recommendations for your location. You can use online platforms, such as Franchise Business Review or Franchise Direct, to connect and communicate with other franchisees in your industry or area.

4 Location agreement

The final step is to secure your location by signing a lease or a purchase agreement with the landlord or seller. This is a legally binding contract that defines the terms and conditions of your occupancy and use of the property, such as the duration, rent, fees, deposits, taxes, insurance, maintenance, repairs, improvements, subleasing, termination, and renewal. You need to review and understand every clause and provision of the agreement, and negotiate for the best possible deal for your franchise. You also need to consult with your franchisor, your lawyer, and your accountant before signing anything, and make sure that the agreement complies with your franchise agreement and local laws.

Choosing the right location for your franchise can make or break your success as a franchisee. By conducting a feasibility study and a site selection analysis, you can increase your chances of finding a location that suits your franchise concept, attracts your customers, and generates your profits. By validating your decision and securing your agreement, you can ensure that your location meets your franchisor's standards and expectations, and that you have a clear and fair contract with your landlord or seller. With these steps, you can start your franchise journey on the right foot and enjoy the benefits of being part of a proven and profitable business model.

5 Here’s what else to consider

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