If you’ve purchased a franchise that requires a great physical location like a food franchise or an automotive franchise, you may need to be a bit more patient than you originally thought. But, it will be worth it if you end of scoring a great spot.
That’s because a great location can raise your odds of success as the owner of a franchise business significantly.
Ask Existing Franchisees This Question
Part of what you need to do when you investigate a franchise is contact existing franchisees and ask them questions about their businesses, like the one I included in this article.
Here’s another one to ask, and it has to do with the topic of the article you’re now reading:
“Were you able to secure a location for your franchise business in a reasonable amount of time?”
That begs this question, however:
“What do you mean by reasonable, Joel?”
A Reasonable Time Frame to Secure a Franchise Location
If my answer to that question was “It depends,” would you be frustrated by my answer?
Answer: It really does depend. It depends on three things:
- The type of franchise business you have purchased
- The area of the country your franchise business will open in
- The real estate landscape
A food franchise may take longer to find a good location for (compared to a retail store) because of what’s needed on the inside. Like, stoves, plumbing, and refrigeration. And, don’t forget the specific things needed for food-service businesses, like grease disposal systems, custom venting, and fire-suppression equipment. In addition, the local fire marshal will probably get involved early on in the process to let you know what the maximum seating capacity can be. (Details, details)
Other franchise types will have their own specific requirements for the location. I just wanted to give you a specific example.
What city would be more expensive to open a franchise business in: Boston or Aberdeen?
If I were a betting man, I’d wager a lot of money on Boston. Commercial real estate prices are going to be significantly higher in Boston. There is a larger population, plus there’s more competition for retail space. It will probably take a little (or a lot) longer to find a great location in the Boston area than it would in Aberdeen, South Dakota. (Nothing against Aberdeen. I hear it’s a beautiful city.)
Some areas of the country can be challenging, real estate-wise. Especially cities that are targeted for growth.
For example, whenever a list like this one comes out, the commercial real estate markets in the cities mentioned can get real tight in a hurry. It can be a lot harder to find a good location. Franchisees that wanted to open in 6 months (after they signed their agreements) may all of a sudden have to be satisfied opening their new businesses in 12 months or more.
If you call enough franchisees and ask them how long it took for them to open their franchise locations once they signed their agreements, you’ll be able to get an average. That’s what you should go on. It’s the “reasonable” time frame I mentioned earlier.
Getting It Right
If you’ve invested in a franchise that requires a great location, don’t be afraid to step up and pay more if you feel it’s a prime spot.
One great thing about franchising is that you don’t – and won’t – have to find a suitable location for your franchise on your own. Most franchisors these days have either a real estate department, or at least access to real estate experts, who can help you secure a good location. Your franchisor can help you get it right.
FYI: The franchisor wants you to have a great location just as much as you do. Since you are going to be paying royalties-a percentage of your sales revenue to them, if you’re successful, they’re successful. The more you bring in the more they make. It’s a win-win!
Getting your franchise location right is crucial. With your franchisors help you should be able to secure a good one.
The Franchise King®, Joel Libava, is a franchise ownership advisor. He’s the author of Become a Franchise Owner! (Wiley Publishing) and owns and operates Franchise Business University. Joel contributes a blog post to Franchise Direct monthly.