In business, the three most important factors needed to secure success are location, location, and location. This is especially true for businesses that rely heavily on daily traffic in order to meet certain turnover objectives when it comes to sales and even more so, when stock that needs to be moved is perishable. This is even more evident in the case of franchising, where a constant flow of sales is needed for the franchisee to stay afloat. National Operations Manager of The Fish & Chip Co., Werner Hedder shares more on the topic and how franchisors go about sourcing and selecting the best location for a franchisee to set up shop.
Whilst there are many elements in business that are needed to ensure success, the location of the business or store is one of the biggest determining factor in the success of a franchisee. A franchisee may be part of the best brand with the most impressive reputation, however if the business is not where the customer is, all will be in vain. If the location is in a quiet and underpopulated area the chances are the store will not reach its greatest potential as it will not reach the number of sales it requires to meet its targets.
When selecting a location for a new store, a few factors need to be taken into consideration by the franchisor to ensure the position chosen will be to the benefit of the business owner as well as the brand in totality.
Whilst different franchisors will have different requirements for their locations, as based on their target market, The Fish & Chip Co. (who serves customers between LSM 3 and 7) considers the following factors:
- The population of the area – The area needs to be occupied with enough people who have a demand for the product. If the population is not high enough, the establishment of a store cannot be justified as the store will not see enough feet through its doors to keep the business afloat.
- Accessibility and visibility of the store – These two factors work together as it is important to ensure that a store has maximum visibility, is convenient to reach and not out of the way. In an age where instant gratification is of prime importance to consumers, brands need to have maximum visibility and accessibility to gain and retain a customer’s loyalty.
- Foot traffic in the area – This is important as passing trade needs to be kept constant. The higher the number of customers who move through the area, the better for the store who needs constant sales to be successful.
- Proximity of local transport – Drop off zones for local transport are very important to many brands, especially The Fish & Chip Co. As the majority of customers might not have private transport, these drop off areas need to be considered as they will ensure greater foot traffic. Once again, if the store is out of their way or far for them to reach, the store will not be visited as often.
- Proximity of other stores in the group – It is important to also bear in mind that stores within the same group cannot be situated too close to one another, as the success of the one store could be to the detriment of the other (should customers prefer one store above the other). It is important take note that while franchisees operate individual business units, all work together under the same brand and to the benefit (or downfall) of the entire group.
Aside from these criteria that need to be met, the site also needs to meet the specifications of the brand identity, to ensure brand consistency is always realised. All sites will have to conform to certain profiles as determined by the analysis of existing successful businesses.
Only once all the needed factors have been weighed up will the franchisee be ready to secure their location and start building the business.
Opinion piece shared by PR Worx.