Restaurant Articles

Opening a New Franchise Location

By July 26, 2016 No Comments

Choosing the Best Location for Your Next QSR Franchise

If you already own a quick service restaurant (QSR) franchise you may be considering opening up a new location. Naturally, you’ll want to do your research, and here are some of the most important factors to keep in mind when choosing the best location for your next QSR franchise.

Consider your geography

The geography of your region is going to play a large role in determining where your next franchise should be located. Joel Libava, the president of franchise advisory firm Franchise Selection Specialists in Cleveland, Ohio suggests keeping new locations as close to existing locations as possible.

Libava’s advice does come with some caveats. For example, if you operate in a rural area, your newest restaurant could be 10 or 15 miles away from an existing location. Conversely, if your QSR is in a dense urban area, the latest spot could be a few blocks away.

Keep rent at your next QSR location reasonable

Dean Clarino, a franchisee who owns two Teriyaki Madness restaurants, knew that “keeping his rent reasonable was key” when he decided to open up a second location. Clarino walked away from negotiations with his landlord a total of six times before he signed a lease at the endcap of a suburban strip mall. Don’t be afraid to do the same if necessary.

Does the franchisor have ultimate control over your next QSR location?

If you’re working under a franchisor you may not have complete control over your next restaurant storefront. Every franchisor has a set of rules and regulations that help determine where a new franchise location can be opened and you may be required to operate within a certain territory, county, or zip code. Thoroughly review your franchise agreement before becoming too emotionally invested in a location.

Franchisors also have years of experience and consumer data to share. Oftentimes, large franchises already have employees on the ground who are scouting out potential areas and developments. Establish a relationship with your franchisor so that you can easily tap into their knowledge and data to make opening a new location that much easier.  

Spend time evaluating potential QSR sites

Now that you have some potential locations in mind it’s time to objectively evaluate them. Are there other retail locations in the same development or area? If so, that can be a good sign — these businesses likely did their homework. Is the space in an area that can be easily accessed by cars, pedestrians, and/or bikes? Is there enough parking? Visit the location at different times and days to study traffic and usage patterns, too.

You should also research the competition surrounding your proposed location. Identify your direct competitors and then determine how your business compares.

Work with experienced real estate professionals and lawyers

Opening a new franchise location comes with very specific rules and regulations. You may know the business side of things inside and out but when it comes to purchasing or leasing space for your next storefront it’s time to call in the professionals.

An experienced real estate broker will be extremely helpful in making the deal go smoothly. Further, a franchise attorney will know exactly what provisions your lease should contain and they’ll be hyper-aware of the details that could have an impact on your business.