How Real Estate Suppliers Support Franchises

Real estate vendors help both franchisors and franchisees find and secure locations that will do well in their target market.

By Katie Porter1851 Franchise Contributor

Updated 2:14PM • 06/09/22

Franchises use vendors to assist with various aspects of the business, such as real estate procurement. When a company is expanding and needs to find locations to do so, it often seeks the help of real estate suppliers — which are often commercial brokers — to help find and secure the land and/or spaces.

“When they're first starting out, they're probably going to outsource a lot of things because they're not going to have the expertise to do it,” said Gwyn O’Kane, franchise consultant at FranDecision.

The Entrepreneur’s Source just recently released a ranking of the best franchising suppliers in numerous categories, out of 750 vendors. The top 10 name brands that help franchises with their real estate aspects are:

And while many “hire a director of real estate internally to help them make intelligent decisions on where their franchisees should be targeting and help them through that process, most still work with real estate brokers, who are usually going to have all the information about what's available on the market and what can be sold,” said Joshua Kovacs, CEO of Oakscale Franchise Development. “And there are various suppliers that come up with information like what your target areas are and who your customer is in a certain geographical area.”

LocateAI, which came in at number five on The Entrepreneur’s Source list, helps franchises with both real estate purchasing and location demographics. Ty Brewster, a broker at the brand, works exclusively with franchises, including Potbelly Sandwich Shop and ISI Elite Training to find retail spaces.

“On the technology side, we have a reporting system that tracks 180 million cell phones around the country, and we provide all that data to our clients for free,” said Brewster. “The geofencing data understands what the traffic looks like in a certain area where you're looking to open a store. We can tell you, 'Here are your clients and this is where they're found in the highest numbers.”

After looking at the 68-point psychographic categories that they break down data into, franchisees can work with the brokers at LocateAI to find spaces in those target areas where they could move into or build.

“We help identify space available in the market, help them with letters of intent and negotiate to get the right terms,” Brewster said. “And we are paid a commission from the seller of the property. We are a free service to all of our franchisee clients because we get paid by the landlords.”

These kinds of suppliers can be an extraordinarily helpful asset for franchises that are trying to expand, need help locating the right neighborhoods and find real estate to purchase. Be sure to check out The Entrepreneur's Source ranking for a full list of vendors.