How to Find the Best Location For Your Restaurant or Franchise
As a first time business owner, the last thing you want is to make a mistake from the very beginning. All the details that go into creating a successful franchise or stand alone business may start to feel a little intimidating. So to ensure you get started on the right foot, one of your top considerations should be location.
Whether you are looking for franchise opportunities or to venture on your own, you will need to find a lucrative location to set up shop. Finding the best location for your business is a balancing act of a few different factors, and depending on your priorities, some factors may take precedence over others.
Your location will affect everything from brand awareness to your bottom line. So instead of leaving things to chance, arm yourself with all the information you can before making a final decision.
Surrounding Traffic and Size
Think about your specific location needs. Restaurants require an area for cooking, food storage, staff rooms, and office space for management tasks; and each of these rooms need to meet your business’s objectives. For example, if you want a big dining area so you can seat a large number of people, then the other areas in your restaurant will also need to accommodate for the increased guest count. A bigger dining area means you need a bigger kitchen and storage area to ensure you can feed larger amounts of people at the same time. However, this might mean that your office space will need to be smaller. Be sure to prioritize the size of each room and find a location based on these priorities.
Remember that certain franchise locations require the building to be a specific size, so make sure to confirm what those are before purchasing.
You will also want to know if there is any traffic surrounding your desired location. If there is, check which time of the day sees the most or the least amount of traffic and make sure these times will align with when people would be eating at your restaurant. For example, if you want to open a breakfast restaurant, but the location you’re looking at has the most amount of traffic at night, this location might not be the best one to suit your needs.
Never forget – accessibility matters. Ask yourself these questions when choosing where to place your restaurant or franchise location, as these factors will play a role in how much traffic you get:
- Can you see the location from the road
- Is it close to a major highway or road
- Will there be any signs for your location
- Can people easily park nearby
- Are there any transit options nearby
Consider Demographics and Psychographics
Your target audience’s demographics and psychographics should be a consideration for which area you choose to put your restaurant or franchise in.
First, complete a demographic analysis on your target, this would include: age range, average household income, education level, marital status, ethnicity, etc. After that is done, you can start looking into your target’s psychographics such as their hobbies, interests and opinions.
You may start to wonder “but how does this information help me decide on a location?” – the answer to this question is simple. Finding in depth information on your target audience will give you a starting point to who you are trying to reach. So once you know who your target audience is, you can choose a location that is conveniently located next to that target.
For example, if you know your target audience has an average household income of $50,000 – $90,000 per year, then you will know to place your business in an area where people earn that amount of money.
In another example, if you learn that a large majority of your target audience are students on a budget, then you can choose a location near a school or library.
One of the greatest advantages of franchise opportunities is that you already have a preset target audience, so most of the leg work is already done for you. However, you will still need to find an optimal location. A great tool to use in your research is location intelligence software. This software can help you optimize business opportunities by giving you key insights into traffic patterns, demographic, and lifestyle trends in specific areas.
A psychographic analysis of your target audience will give you a better understanding of what they do in their recreational time. Through this information, you can search for businesses that align with your audience’s hobbies/preferred activities. Then you would strategically place your location near those complementary businesses.
Let’s say in your research you see that your target audience is mostly families with young children who enjoy spending their free time staying active. You also see a spot become available near a gym that hosts kids swim practice. This gym would be the perfect complementary business because kids will be hungry after their swim practice. Therefore, by positioning your restaurant conveniently next to this gym, will give your target audience an easily accessible place to eat.
These complementary businesses act as neighborhood traffic generators that will get your location more attention.
Go Head to Head With Competitors
Your direct competitors already did the heavy lifting in terms of market research. Their dollars have already been spent on finding a location that is conveniently placed in a lucrative area. Therefore, they are currently attracting the same target audience that you are seeking.
By placing your business right next to (or in close proximity to) your competitors, you will be benefiting from the efforts they already put in.
Direct competitors are businesses that have the same target audience, and sell similar products; so our initial instincts may tell us to stay as far away as possible from them. However, this could be a missed opportunity. If you see that one particular direct competitor is succeeding in driving traffic to their location, chances are they did diligent research on the ideal psychographics and demographics of that specific area.
Instead of shying away, take the opportunity and face your competitors head to head. In doing so you will be able to take advantage of their advertising and research efforts.
A note to remember if you are looking into franchising opportunities is that some franchisors want a specified amount of distance between two different locations. For example, if you are looking to invest in a Mary Browns franchise you can simply type into Google – Mary Brown’s near me – to ensure your new location is outside the required distance from other Mary Brown’s chicken locations
Without a doubt, you should always complete your own research before opening a new location. But seeing how well your competitors are doing in a given area can be a confirmation that this area is indeed a lucrative one.
Look Into Future Developments
Doing a quick glance at your surroundings is not enough to protect your business. While enquiring into what attributes currently surround your desired location is important, looking into future developments is equally crucial. It’s important to do your due diligence to see if you can find any upcoming projects that can potentially impact your business.
Future developments can either be beneficial and aid in driving traffic to your location. Or, they can work against you.
For example, you could be looking at a location that is near a complementary business, but remain on the fence about this decision due to the lack of accessibility. With further research you find out that the governing municipality is planning on adding more bus routes closer to that area. This future development can be the determining factor you need to purchase the land.
On the other hand, you may be looking at a location that is seemingly perfect, but then later find out there will be a huge construction project that could take years to complete. This project will be noisy (therefore disturbing your guests) and will make it more challenging for people to see your business from the road. All of a sudden, a location that seemed to check all your boxes doesn’t appear to be as lucrative anymore.
Unforeseen circumstances are always a possibility. Although they may be difficult to detect at first, be sure to protect yourself by performing meticulous research to mitigate as many risks as you can.
Find a Professional
A talented real estate agent will be valuable to you in more ways than one. When it comes to reading over lease agreements, your agent (or lawyer) will help you fully understand the terms and conditions. Therefore preventing any shortcomings down the road, such as hefty rent increases over the years or any hidden problems with the rental unit, just to name a few.
Additionally, these agents are professionally trained in negotiating deals. They know all the right questions to ask in terms of property arrangements and will be able to get you the best deal possible.
When you are scouting for a professional, it would be advantageous to look for one who knows the relevant areas like the back of their hand. This knowledge will allow them to soundly advise you on which neighborhoods will be the best fit for your business.
Opening a new location under a franchisor gives you the advantage of having a group of professionals guiding you through every step of the process. Mary Brown’s offers franchise opportunities where you can feel confident knowing you are backed by a team with years of experience who only want to see you succeed.