Strategic Real Estate Decisions for Franchises

Choosing the right site for your business is crucial but, for many franchisees, the real estate site selection process can seem a bit overwhelming. They need to consider the demographics of the area, square footage of the building, cost per square foot and whether the site lends itself to strong traffic. Building from the ground up can be time-consuming and expensive, but it allows owners to create their ideal space. Alternatively, remodeling a second-generation space can save time and money, but it requires a bit more flexibility.

Here is a strategic outline of the factors you should consider during the real estate process.

Location

Location, location, location. If you’re making a real estate investment for your franchise, it’s because that space is a crucial part of you successfully running your business. Bring a deep understanding of the demographics your business will serve to this process, and you can analyze the demographics of the population surrounding a given site to see if it’s a good fit. 

This is also an important time to consider foot traffic. If you’re building an office for the sole purpose of having a designated space for your administrative work or equipment storage, foot traffic will be less important. But, if your business might benefit from high volumes of foot traffic, visibility should be another major consideration.

Market Research

Look into the presence and performance of potential competitors in the area, but bear in mind that this can be a double-edged sword. The presence of successful competitors is likely an indication that your product or service is in demand in the area, but you do not want to enter a market that is already oversaturated. Industry professionals can help you strike that balance.

Accessibility

Your business should be accessible to a variety of people. Your potential customers may use public transportation, require mobility aids, want ample parking or prefer that the business is easily accessible by sidewalk. 

Considering the many factors that could impact a customer’s ability to get to or experience within your business will help you to avoid alienating people with disabilities, people who require alternative transportation or people who place emphasis on convenience.

Costs

Real estate is an investment, and you are entering into a long-term relationship with the site and everything associated with it. You should consider the terms of the lease or purchase agreement as they relate to any costs you might incur as well as any ongoing operating costs like utilities and maintenance. 

It is important to look at the bigger picture when evaluating costs as the more affordable choice at the outset may not guarantee long-term affordability. Sometimes, it’s worth making the bigger initial investment for more security and stability in years to come. For example, the condition of the property and any future infrastructure and facilities needs can provide context for the price and help you to make an informed decision.

Brand Image

Your ultimate decision needs to align with the kind of business you’re looking to grow. One of the beauties of the franchise model is that the brand has already established a visual identity and brand standards that customers expect at each location, regardless of ownership. All of these factors come together to impact the overall experience of your team, customers and potential customers; weighing them against existing brand standards will help you deliver what’s expected.

The real estate process can be demanding and somewhat tedious, but the hard work pays off. Franchisees should conduct thorough due diligence and seek guidance from real estate professionals, the franchisor and fellow franchisees with firsthand experience to gather insights and select the ideal location.

Find more information on the real estate process:

• How Do I Secure Real Estate for My Retail Franchise?
• Location, Location, Location: Five Tips to Help You Choose the Right Franchise Real Estate
• The 8 Essential Real Estate Questions Franchisees Should Ask Franchisors