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  • Location and Site Selection

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    ShiMeiChan
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    The document discusses important factors to consider when selecting a location for a franchise business. It identifies six key factors: understanding the business concept and target customers, doing research provided by the franchisor, consulting with existing franchisees, carefully evaluating traffic patterns and neighbors at potential retail sites, recognizing criteria may differ for non-retail businesses, and working with professionals to finalize the site deal. Selecting the right location is critical to the success of the franchise business.

    Original Description:

    Franchise Business

    Original Title

    CHAPTER 8

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    The document discusses important factors to consider when selecting a location for a franchise business. It identifies six key factors: understanding the business concept and target customers, doing research provided by the franchisor, consulting with existing franchisees, carefully evaluating traffic patterns and neighbors at potential retail sites, recognizing criteria may differ for non-retail businesses, and working with professionals to finalize the site deal. Selecting the right location is critical to the success of the franchise business.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
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    Download as ppt, pdf, or txt
    520 views12 pages

    Location and Site Selection

    Uploaded by

    ShiMeiChan
    The document discusses important factors to consider when selecting a location for a franchise business. It identifies six key factors: understanding the business concept and target customers, doing research provided by the franchisor, consulting with existing franchisees, carefully evaluating traffic patterns and neighbors at potential retail sites, recognizing criteria may differ for non-retail businesses, and working with professionals to finalize the site deal. Selecting the right location is critical to the success of the franchise business.

    Copyright:

    © All Rights Reserved
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    of 12

    CHAPTER 8:

    LOCATION AND SITE


    SELECTION
    CHAPTER OBJECTIVES
    • To identify what are the factors influenced the
    choose of franchise location.
    INTRODUCTION
    • Selection of the right location for a proposed
    franchise outlet can mean the difference between
    success and failure.
    • Location theorists often claim that the three most
    important criteria for success of any business are
    location, location, and location!
    • Factors associated with a specific site can affect the
    initial cost, profitability forecasts , and the rate of
    growth of the business at the proposed site.
    • A franchisor has the responsibility for
    planning the growth and development of the
    franchise system within a particular area,
    across areas, cities, states, and regions.
    • Both franchisor and franchisee want the best
    possible site within a locale that displays the
    demographic characteristics and traffic
    patterns that will increase the chance for
    success in the organization's line of business.
    How to Choose the Right
    Franchise Location?
    1. Know the Concept Inside and Out
    • What drives traffic to the business?
    • Who are its target customers?
    • Where do those target customers live?
    • How and when do those customers interact with the
    concept? (Is it a restaurant that caters to the
    business crowd on their lunch breaks?
    • Does it rely on impulse sales, and so is a highly
    visible location a must?
    • Are your customers coming to you, or are you going
    to them?
    2. Do Your Homework With the
    Franchisor
    • Franchisor has its own specific set of requirements
    and regulations when it comes to selecting a site
    location will be spelled out in the Franchise
    Disclosure Document.
    • Good franchisors have already done a lot of the
    market research for you. It's in their best interest to
    keep track of demographics, and they'll share that
    data with you.
    • The common approach today with many franchisors,
    especially the more established ones, is to grant a
    location, but no territorial protection
    3. Talk to Fellow Franchisees
    • It's a good strategy to solicit input from
    current franchisees.
    • development sites might be difficult for a first-
    time franchisee to nab, because franchisors
    will want to give their best locations to
    franchisees with proven track records.
    4. Carefully Evaluate Your Retail Site
    • Study the traffic patterns
    • Is there enough parking at your site? – monitor and visit several
    different times
    • Be financially realistic – Is the business can generate sales and cover
    your operation cost?
    • Look out for your neighbors.
     avoid location near direct competitors
     demand generators – choose location if there are a similar business
    to yours that are doing well.
     the tenant mix – choose location that are complimentary to your
    product or service
     The anchor store – location near hypermarket ie. Tesco driving
    customers to your area.
    5. Recognize that Criteria are Different
    for Non-Retail Sites
    • If your business requires you to go to your
    customers, rather than your customers
    coming to you, home-based business is better.
    • a highly visible or easily accessible location is
    less importance.
    • Instead, you can focus more on finding a
    manufacturing facility or a warehouse with a
    low cost of rent.
    6. Close the Deal With a Professional
    • Once you think you've got your perfect site,
    work with a real estate broker and a franchise
    attorney to seal the deal.
    REVISION
     There are three-step approach to identification of
    areas for expansion (geographic areas, number of
    franchises to be established, and individual site
    selection)
     There are 6 important factors that influenced the
    choose of franchise location.
     Franchisee seeks professional advice (banker,
    attorney, real estate broker, and accountant)

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