Non-Traditional Real Estate Locations

Brands can reach new audiences by opening up stores in unconventional locations

SPONSOREDUpdated 4:16PM • 03/11/16

The right location is key for franchisee success. Franchise brands will do copious amounts of research in order to determine the best sites for expansion, and oftentimes, they will turn to non-traditional real estate options to expand their customer base while growing their brand.

Real estate can be tough to come by as there are new franchise locations popping up every day. The International Franchise Association estimated there were 781,794 franchise units operating in the U.S. in 2015. With this kind of growth, the franchise real estate market is becoming more and more saturated, and it’s forcing brands to think outside the box. Bob Simpson of Simpson Consulting Group, who has more than 27 years of experience in real estate, franchising and retail operations, explained why franchises are looking at non-traditional real estate spots. He also shared some of the most common examples.

Overcome Saturation

When a franchise becomes successful and dominates the market, they may have run out of spaces to launch new locations. Simpson said there are brands like sandwich shops and coffee shops that have completely conquered the market and don’t want to encroach on another franchisee. This means franchise brands have to be more creative in their real estate search.

“The idea of going to non-traditional locations is to attract customers they were not finding originally,” Simpson said. “Brands start to think ‘we have dominated the market, so how can we capture a new audience without building a location next to an existing brand?”

Reach new audiences

He said a brand’s research department will look at up and coming neighborhoods for major cities. The reasoning behind this includes a brand wanting to be a part of a cool, hip neighborhood that is growing, which also means that rent will be affordable, as there typically isn’t major business penetration there yet. Brands are able to stake their claim in a part of town that hasn’t yet become mainstream, and in the process, the brand has a chance to establish their relevancy. Checkers* & Rally’s is an example of a brand using this type of real estate tactic. The brand targets rapidly growing areas that are prime spots for real estate development. The mentality has worked—Checkers & Rally’s is one of the fastest growing fast-food chains.

Checkers & Rally’s is also at the forefront of another type of non-traditional real estate location: the big box store. Checkers & Rally’s, and other brands like Philly Pretzel Factory, have opened up franchise locations inside large retailers like Wal-Mart. Marty Ferrill, president of Philly Pretzel Factory, said having franchises in Wal-Mart brings in a whole new crowd of customers and investors.

“In some cases you’re dependent upon the place or the venue to drive traffic. It gives our brand real exposure from a sales standpoint while helping us grow more units,” Ferrill said. “Traffic in big-box stores is the perfect opportunity for us as there are a lot of people walking around for a few hours that need to snack.”

College campuses are another non-traditional real estate development spot for brands. Restaurants know that college students are in a hurry, whether to class or to the library to study. Setting up a franchise at the student union or in a shopping plaza by a school can attract a whole new audience. Wing Zone, a nationwide leader in dine-in and delivery wings, recently opened a location at the University of Florida, the same college where the idea for the brand started.

In the end, when brands are targeting non-traditional locations, Simpson explained there’s ultimately one key to success—keeping an open mind.

“In order to achieve success in non-traditional locations, brands need to be adaptable. That means either trying these new spots or adapting the brand model to achieve success in a new real estate location,” Simpson said. “Brands have a large network of franchisees they can use for research to help determine the best non-traditional real estate locations.”

*This brand is a paid partner of 1851 Franchise. For more information on paid partnerships please click here.

Non-Traditional Real Estate Locations

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