11 Steps to a Franchise Site Selection

Posted by Cole Carns on May 30, 2018
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As the adage goes: Location. Location. Location.When working with businesses and franchises, location is truly everything. When it boils down to it, a franchise or business can provide great products and services, but if they are in a terrible location they most likely will not find themselves successful. In the site selection process, Heads of Operation look towards brokers to ensure they find the best spots possible. I have outlined 11 steps to a successful franchise site selection below and on whom the responsibilities lay at each point.

 


 

  1. Evaluation (Broker, Franchisor, & Franchisee): The first step of this process is to identify the company’s needs, timeline, and property requirements. This should be a conversation between the franchisor and the broker to make sure both are on the same page.

  2. Determine Geographic Priorities (Broker, Franchisor, & Franchisee): Once the broker and franchisor understand what they are looking for, they must analyze the area and look for strategic locations.

  3. Identify and Evaluate Prospective Sites (Broker): The broker will then make an initial sweep of the available and non-listed properties based on these requirements.

  4. Market Analysis and Demographics (Broker, Franchisor, & Franchisee): Once the sites are gathered, the broker should prepare reports such as demographic research, competitor research, traffic counts, and heat maps. It is then the job of the broker to use these reports to help the franchisee compare different spaces. 

  5. Tour Sites (Broker, Franchisor, & Franchisee): The broker, franchisor, and franchisee should then tour the sites in person. After the site visits, all should rank the sites in order of preference.

  6. Proposal Process (Broker, Franchisor, & Franchisee): After narrowing down prospective sites and touring in person, the next step is to send out LOI’s. It is likely that you will be negotiating with multiple landlords concurrently to ensure that the franchisee finds a space that meets their most important needs (e.g. time to occupancy, build-to-suit needs, etc.). 

  7. Space Planning (Broker, Franchisor, Franchisee, & Contractor): Franchisor, franchisee, broker, and contractor meet to discuss the franchise layout and requirements in each space. 

  8. Negotiations and Lease Legality (Attorney, Franchisor, Franchisee, & Broker): After finalizing the selected site, the attorney, franchisor, franchisee, and broker negotiate purchase/lease details and the relevant documents.

  9. Tenant Improvements and Construction (Contractor, Franchisor, & Franchisee): Contractor, franchisor, and franchisee ensure that improvements are built to client specifications and are on time and in line with the agreed upon budget.

  10. Completion of work and Grand Opening (Contractor, Franchisor, & Franchisee): Franchisor, franchisee, and contractor assure obligations are fulfilled to franchisor satisfaction. Coordination of move-in and closing of property.

  11. Client Check In (Broker, Franchisor, Franchisee, & Contractor): Broker checks that the contract obligations are fulfilled and that the franchisee is satisfied with their location.

Whether you are a new franchisee or on your 10th location, hopefully this will help you know what to expect in the franchise site selection process. In working with a number of national franchises, we have found these steps to be extremely successful for our clients. With this level of analysis a broker can help ensure that the franchise is in a location that will help push their business toward success.

Download a printable version of this list to have on hand for your next site selection! 

franchise-site-selection-tips 

 

Cole Carns

Written by Cole Carns

Cole joined LTP in 2017 as a Broker Associate. Cole became interested in commercial real estate as a child while watching his father, grandfather, and uncle navigate the field as investors. As he begins his real estate career, he is interested in learning more about the investing and developing side of CRE.

In Franchise, Site Selection