In Lightbridge Academy’s seven years of franchising, the early education and child care brand has grown to nearly 100 centers open or in development. That rapid growth can be attributed to a number of factors: an unabating demand for high-quality education services, a roster of cutting-edge programs and services, an emphasis on personal relationships and a strong corporate support system for franchisees to name just a few. But one of the most crucial contributors to the success of Lightbridge Academy’s franchisees is the brand’s careful real estate selection strategy, which seeks to establish new facilities only in prime sites and markets.
By the end of 2018, Lightbridge Academy plans to open 11 new franchise locations with centers in New Jersey, New York, Virginia, and Pennsylvania, and the brand is also targeting Ohio, North Carolina and Florida for additional openings. In each of those markets, Lightbridge Academy’s franchise development team is working with real estate firms to secure the best possible sites for new facilities.
According to Mark Mele, Lightbridge Academy’s Senior Vice President of Franchise Development, the brand’s real estate strategy largely comes down to one principle: “we look for viable sites that make the best economic sense, and sites that we would sign corporately,” Mele said. By looking at each real estate property with the same lens as they would for a corporate location, Mele says the development team provides a level of due diligence that franchisees cannot always provide for themselves.
We spoke with Mele to learn more about how Lightbridge Academy has refined its real estate strategy and what the development team looks for in new sites.
How does Lightbridge Academy go about finding real estate for each new facility?
Mele: We start by focusing on the markets where we are primed for expansion. So even before we talk to a prospective owner, we know exactly where we want to grow and have a good idea of how to tackle that market. For example, we’ll start by looking at a state like Ohio, and then determine what cities meet or exceed the criteria from a demographic standpoint. Other steps include visiting each city and shopping available sites with our team of real estate brokers. Once we find the best sites, we’ll determine if the local tuitions in the market can support the real estate prices. When these steps are completed, we’ll start looking for qualified prospects interested in the same market as we are.
Once we have a qualified prospect whose core values align with ours, we’ll carefully vet them and then invite them out to a Discovery Day at our home office for a full presentation of our franchise opportunity and both parties can see if there is a fit. Once we are prepared to move forward, a background check has been cleared and a franchise agreement has been signed, our real estate team will start working with the franchisee to find the perfect location. Some franchisees want to lease a space and some want to buy, so our real estate team will work with a broker to find the best sites that match the franchisee’s preference. Then the broker brings back a list of potential sites, and our team will vet them with our sophisticated data platform to narrow down to the sites that meet or exceed our demographic requirements, then it’s up to the franchisee to decide which of the qualifying sites they are most interested in.
What types of sites are you typically looking for?
Mele: The majority of our facilities are freestanding locations in highly visible sites and demographically sound markets. We vet each site independently to ensure it will work for our prototypical design.
If the franchise candidate is looking to purchase a location, they have a couple of options. They have the option of buying land where they can build a facility or they can purchase an existing structure that can be retrofitted as a Lightbridge Academy. If the franchisee is interested in leasing, we’ll find a building that works for a retrofit and work with the landlord to make that happen.
Do you approach the real estate selection process differently for an owner’s second or third location?
Mele: Once an owner has opened a Lightbridge Academy and has gone through the real estate selection process, they have a better sense of what’s involved and what makes for a perfect location. They will tend to do more research on their own and are more involved in the selection process, but the things that we’re looking for in a market and site are still the same.
How has Lightbridge’s approach to real estate selection changed over the years?
Mele: For years we’ve been focused predominantly on suburban areas, but since we have been expanding at such a brisk pace, we’ve been pulled into new and different markets, including more urban settings.
Lately, because we’re reaching into so many new markets, we’ve been partnering with larger real estate firms that can purchase the land and develop it all themselves as a turnkey operation.
Are there any recent examples of Lightbridge facilities that found especially great locations?
Mele: Yes, and one recent example is a unit we opened in Garnet Valley, Pennsylvania, which had quite a few children enrolled before the doors were even open. That was a great example of us hitting a market that was eager for our services. When you can open up on day one with more than 30 children enrolled, that tells you the development and marketing strategy is working. We’ve refined those strategies to a point where it is very comfortable and effective to execute, and of course, we continue to refine it with each new market and center.