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Selecting the Ideal Location for Your Franchise


As we have previously discussed, the site selection process for a new development is a very specific and detail-oriented process. This is no less true when it comes to finding the right site for a franchise business, and these businesses come with their own unique needs and hurdles that need to be addressed to best establish themselves for sustained growth and success. 


Join us as we take a look at some of the elements that you need to consider when looking at a location for your franchise.  


Sourcing Sites for Deeper Evaluation

The true first step that you will need to take, as obvious as it may seem, is to assemble a range of sites to evaluate. Rather than setting your heart on that one, “perfect spot,” you will be best served to find a range of potential sites that will serve your needs, so that you can perform in-depth research to find the best match.

Getting input from the company that you are franchising from can be a great place to start, as they will often have recommendations to push you in a beneficial direction. You can also source sites from local brokers and developers, who will often have additional insight on many of the properties that are available and within your budget. 


During this process, there is a wide range of information that you should be compiling for accurate and in-depth comparisons, helping you find the ideal location for your franchise. 


Examining Everything There is to Know about a Site

Site selection is heavily influenced by a number of factors that will need to be considered to get an appropriate understanding of how your franchise may fare in a specific location. You will most definitely want to consider each of the following in order to determine the viability of each option. 


  • Demographics

    Your franchise can’t operate well if there are no customers to take advantage of your services. You will need to evaluate the immediately local demographics, as well as the demographics of the surrounding area, to ensure that you will have a dedicated customer base. 

  • Traffic Counts

    What is the overall potential traffic flow for this location? Is it near a business intersection or thoroughfare that will result in many potential customers passing your business daily? Or is the location in a less populated area, where daily foot traffic may be a serious concern for your business?

  • Access and Visibility

    An additional concern that you will need to evaluate is how easy it will be for potential customers to see and make use of your business in this location. Do any buildings, signs, or other obstructions limit the visibility of the space in question? Will passing traffic be able to easily see the business as they pass, or as they sit in the intersection? If they do decide to patronize your business, are there any medians that will prevent them from doing so? Is there anything that will prevent them from being able to access your business easily? 

  • Surrounding Competition

    You will also need to evaluate the surrounding businesses for the potential location, and determine what the competition you will be facing will look like. How many of the businesses in the immediate area, as well as further out, will be directly competing with your business for customers on a daily basis? 

    This is also a good time to investigate whether any other locations of the business you are looking to franchise are nearby, as this will present an additional layer of potential competition.  

  • Potential Synergy

    Not every nearby business will necessarily be a competitor, and some may actually help your business. You will want to look at what nearby businesses will draw in customers because of their services, getting your location more visibility and traffic. Many other service-based businesses that cater to a different need from your own are great candidates for this kind of mutually beneficial relationship, such as banks if you are franchising a quick-service restaurant. 

  • Property Value

    The final aspect that should be evaluated, one that will likely be affected by each of the preceding factors, is the overall value of the property in question. This will directly affect any potential lease, so it will be a delicate balance of finding a property that meets these needs while also remaining within your budget. This can also play a major role in determining your rent-to-sales percentage, the final benchmark that many decision makers use to evaluate the economic viability of a rental property. Also known as the occupancy cost ratio, most retail tenants will identify a range that will work for them when sourcing potential locations. Tenants will typically look for a percentage between 5 and 10%, but the sweet spot for many is around 8%. 

Working with the Franchisor

The other element that you need to consider during site selection is going to be the company that you are franchising, as they may have specific insight or even stipulations for the process. Every company differs in its approach during this process, but many franchising companies will have a range of input and resources that they can provide for the site selection process. You will want to loop the franchisor in before you commit to any space so that you can ensure that they approve of the location, and there aren’t any requirements they have that would conflict with the space you are considering. 


Additionally, involving them in this process could mean that they provide you with additional resources that you otherwise would not have access to. They may have site recommendations that could be good fits for your business, which have already taken into consideration the points discussed above. They may also have research that they can share with you to help in the decision-making process, such as demographic reports, traffic heat maps, growth projections, or even simply a comprehensive list of existing franchises that you would want to be appropriately spaced away from.  


Ultimately, you will need to determine how big of a role the franchising company will play in the whole process of site selection. In many cases, this will be clear in the initial stages of working with them, but in the event that it is not, you will want to speak with them directly to determine how active they will be in the process and what tools they will make available to you.


Talk with Other Franchisees

The final step that you should consider taking if you have access is to speak with other franchise owners in the area. They may be able to cover what their experience was like selecting their franchise’s location, as well as what it was like working with the franchising company to decide on a property. You may even be able to get their insight on the factors that they evaluated, and how they chose the property they are located in.


If you can also use this discussion to evaluate how their business is currently performing, compared to what their expectations were, then you will be armed with even more knowledge to make the best decision for your business.



Austin gottsacker >

Director of Acquisitions & Leasing

Austin Gottsacker started with SimonCRE in 2015 as a Development Associate, in January 2017 was named Acquisitions and Leasing Manager, and in 2022 was named Director of Acquisitions and Leasing. As Director of Acquisitions and Leasing, Austin works with the CEO, tenants, and brokers to execute client requirements as well as manage the in-house outreach and due diligence for the company’s projects. He is also responsible for the site investigation, underwriting, budgeting, site planning, and managing relationships for the company’s vendors and consultants. Austin then follows projects through the entitlement process to aid in a variety of challenges and help keep projects on schedule and on budget.

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