| Location. Location. Location. It's true. Location is the | | | | temporary retail stores at other locations, taking |
| most critical factor in the success or failure of any | | | | advantage of the busy pre-Christmas period to sell as |
| new franchise business, and almost every other | | | | much as I could in as short a time as possible. The first |
| business, for that matter. | | | | was again at a place disproportionately favored by the |
| Some franchisors have locations already available for | | | | lunchtime crowd, however the rent and overheads |
| the consideration of potential franchisees. Some | | | | were sufficiently low to make the economics of the |
| facilitate the purchase of existing outlets in established | | | | store work in my favor. It did pretty well. |
| locations from franchisees looking to sell. Others may | | | | The second store was much larger, something all |
| leave the choice of location entirely up to you, although | | | | retailers would normally see as a huge positive, |
| they will normally keep a watching eye on your choice. | | | | however the building itself was isolated from the main |
| When I returned from teaching an MBA class in New | | | | center of a regional shopping mall. While it received |
| Venture Creation at Utah State University in 2001, I | | | | plenty of passing automobile traffic as they entered |
| explored franchise ownership for the first time. I had | | | | and left the car park, the effort required for shoppers |
| enjoyed teaching about franchising and had enjoyed | | | | to actually come across to the building worked against |
| excellent customer experiences at franchises such as | | | | its success. While I didn't lose money on the deal, I had |
| Subway, Cold Stone Creamery, and Boston Market. | | | | paid a much higher rental for the site in the hope that |
| At the time, none of these brands were established in | | | | the additional space would mean higher sales. I was |
| Australia in any meaningful way. | | | | wrong. It was not nearly the goldmine I had hoped it |
| Thus, soon after our return, I attended a Subway | | | | would be. Ironically, the building had formerly been a |
| meeting for potential franchisees held at south-western | | | | Boston Market, a franchise that didn't last long in |
| Sydney. After Subway's Regional Manager informed | | | | Australia since it didn't catch on. Perhaps I should have |
| us that franchisees must first select their own location, | | | | learnt from their failure at the site some years before. |
| I discussed with him two possibilities I then had in mind. | | | | The other day, a friendly supplier gave me a great |
| To the first, he said that the site, a shopping centre | | | | piece of advice. He said that the target for any new |
| under construction, was already taken by a new | | | | retail store should be an average of 15 people walking |
| franchisee. My second suggestion was a regional | | | | past the location every minute. While I suspect that |
| shopping centre then several years away from | | | | many stores may still succeed with fewer pedestrians |
| development. Unfortunately, it too was taken, this time | | | | than this, it is a great "rule of thumb" against which we |
| by an existing franchisee in a nearby area. Since I had | | | | can evaluate any locations we are seriously |
| no other good alternatives, I let the idea drop for a | | | | considering. |
| time. | | | | This is the kind of research that only you can |
| I got back on the franchise horse via the purchase of | | | | undertake. Franchisers will cover themselves in |
| an existing bookstore franchise in late 2007. Fronting a | | | | legalese to ensure that they are not held accountable |
| pedestrian plaza in the middle of a regional business | | | | for any preliminary estimates of customer numbers |
| district, I confirmed the value of its location by sitting out | | | | and turnover. The owners of shopping malls will do the |
| front of the store and counting customers as they | | | | same. This is a job for you. |
| entered and left one afternoon. I counted both buyers | | | | Learn from my mistake. If it is an existing site, survey |
| and browsers for about 20 minutes. The numbers | | | | the traffic flows at various times of the day and at |
| looked good. | | | | different days of the week. If you are thinking about an |
| Looking back, they were good, but perhaps not as | | | | entirely new site, find comparison shopping centers and |
| good as I had first hoped. Why? Because I had | | | | malls that have similar demographics to yours and a |
| observed the store during that time of day when it | | | | similar mix of tenants and make counts of the |
| was, by far, at its busiest. It was lunchtime, and I have | | | | shoppers walking in and by stores like yours. You will |
| learnt since then weekday lunchtimes, from noon until | | | | need to allow for the fact that the center may have |
| around 2:00pm, can account for 70 percent or more | | | | grown its traffic over time, whereas a new mall will |
| of the day's takings. | | | | take time to pull a crowd, particularly in today's |
| Therefore, while the store continues to perform well, it | | | | challenging retail environment. |
| would work a whole lot better if the lunchtime crowd | | | | If you get it right, however, a great location will ensure |
| was representative of customer flows and revenues | | | | that your franchise business is a true boomer rather |
| across the entire day. It's not, and that's life. | | | | than a business which is here today and gone |
| At another time in the recent past, I created two | | | | tomorrow. |