For entrepreneurs who’ve already experienced a taste of success in their careers, owning a franchise can be one of the most lucrative, exciting and well-established ways of expanding your horizons.
Teaming up with a recognized franchise provides you with automatic name recognition, products and services that customers already love, and close contact with regional and nationwide advertising networks.
As a franchisee, you’ll even receive corporate support with marketing and advertising, employee training and perhaps a loan to ease you into self-funding startup operating costs.
Franchising and the Importance of Location
All of these perks of owning a franchise are only enhanced by picking the right location and diversifying your operations.
Although the franchisor will very often lend a helping hand and steer you in the right direction, picking the right location(s) depends on knowing the industry, local market and target customers.
Picking the Perfect Location
Your location — or whether you decide to go with multiple locations for your franchise business — will mostly depend on the kinds of customers whom you interact with every day and how those customers interact with your franchise.
To take a few examples from the food industry, running a sports bar is a very different proposition than operating a restaurant that draws business clients in the afternoon, which is radically different from running a pizza joint in a college town or donut shop in a cramped metropolis.
So, how do you go about honing in on the right location — or constellation of locations — to ensure that your franchise experiences smooth sailing from the outset? Knowing your target customers is essential, as is understanding their needs and acting accordingly.
Are Customers Coming to You?
If your future customers are likely to seek you out rather than the other way around — say you’re running a truck rental business — then that might not place as high an emphasis on setting up shop in a highly visible, high-volume area like a street corner.
The last would be a better location for pulling in impulse buyers and bringing the business to customers who wouldn’t necessarily seek you out first.
Determining a great location is all about asking yourself what kinds of customers you’re likely dealing with and how much marketing, advertising and visibility you need to get their attention. This is where a franchisor can also help provide guidance.
Why Becoming Multi-Unit Really Works
It used to be that franchisees picked one location and one brand and that was it. Those days are over. Far from a rarity today, being a multi-unit franchisee is actually the norm; just over half of all of America’s nearly half-million franchisees (53%) are multi-unit franchisees.
In fact, multi-unit franchisees own more than three-fourths of the franchised restaurants in the United States, which collectively comprise a huge slice of all franchising.
The reason that franchisors feel more comfortable overseeing multi-unit franchisees and multiple locations is that this has proved highly successful in the past. Remember that recession that we just weathered?
Owning Multiple Locations Pays Off … Literally
Well, it turns out that multi-unit franchisees did much better overall during the recession than single-unit operators, and many franchisors actually feel more at ease working with one stellar franchisee rather than potentially hundreds of first-timers.
Going with more than one location has also been shown, by the U.S. Small Business Administration, to be more lucrative than single-business ownership.
Multi-unit franchising seems to be compatible with this increasingly winner-take-all economy and allows franchisees and franchisors alike the opportunity to quickly expand. It’s a first-mover advantage that really pays off!
To learn more about finding a great location for your franchise, visit our website today!