Location, Location, Location:
The old real estate adage of “location, location, location” still holds true in today’s market, and is one of the most crucial aspects to focus on when opening any new business, including a franchised restaurant. Finding the perfect location is easier said than done, especially if you don’t have a background in developing properties for various commercial purposes.
Is Amazon Killing Brick and Mortar?
Although the “Amazons” of the online marketplaces are becoming more successful everyday, the reality is that 94% of all retail sales are still conducted in physical locations. These online transaction trends are having a stronger impact on some industries more than others and luckily for those of us in the restaurant industry, consumers are eating out more than ever.
In Canada, the amount spent at restaurants has increased for 25 years straight, even during periods where the entire economy has struggled, such as 2008. The restaurant industry’s growth has been double the rate of inflation, and shows no signs of slowing down as North America has fully adopted a culture where eating outside of the home is a “norm”.
Who is Your Customer?
Just like any business, when you begin to consider locations for your franchised restaurant, the first thing you need to do is fully understand who your target customer is. One of the greatest benefits of becoming a franchisee, especially with the Joey’s Group, is that you gain invaluable data, training and advice from “head office”. In the case of Joey’s, our typical customer enjoys “fast casual dining”, where they don’t receive full table service, but they do demand a higher quality of food and typically look to avoid high quantities of processed or frozen ingredients. These customers favour freshness and appreciate contemporary space designs.
Regardless of the style of restaurant, it is paramount to understand what your target customers enjoy, where they like to spend their time, what their spending habits are, and where they live and work. If you understand these fundamental data points, you can then narrow down your location search to capitalize on the wants and needs of your ideal client.
Remember, you cannot succeed as a brick and mortar style business unless you are physically in the location where the right customers can walk into your business and consume your offering.
Cheaper is Not Always Better
Being financially savvy and controlling your spending are two great pathways that can lead to a successful and profitable franchise. However, when you are selecting a location, you must proceed cautiously and ensure that you are spending enough to secure a property that will bring you immediate and long term success. It may be tempting to take a risk on a cheaper building that is “past it’s prime” or on a location that is slightly off the beaten path, opposed to an ideal location in a developed, busy area.
Many believe that if they perfect their operations and advertise effectively, the customers will come to them! Sadly, this strategy is rarely successful.
Analyze Competition
Instead, start by investigating some of your competitors in town. Take note of how busy they are, during all months of the year. Have they been around for a long time? Is there further development taking place nearby to these locations? If you have a very busy competitor, that has been popular for quite some time, in an area that is continuing to grow, you may have discovered the ideal location to place your franchise.
If you find an area that is extremely popular, with high amounts of consumer traffic, it is important to ensure that the customers in that area fit the description of your target customers. For example, a certain location may be extremely busy, but the majority of consumers there are visiting McDonalds, Burger King, and a discount grocery store. We have already determined that a Joey’s customer likely avoids large amounts of processed foods, so if they favor fast food chains, they may not be a great fit for your future restaurant. This is a great lesson to learn when analyzing traffic. Plentiful foot traffic does not necessarily translate into a concentration of consumers that will purchase your offering.
On the other hand, if an area has another “fast casual restaurant” that is bustling all year long, this is a great indicator that a restaurant like Joey’s might flourish here. One fast casual restaurant that is consistently at capacity is a great sign, however if there are already three or four restaurants of this style in the area, the local market could be saturated and may not bring long term success.
Additional Considerations with Location
If you are narrowing in on a potential location, it’s a great idea to spend some time pounding the pavement in the surrounding area and get a feel for the neighbourhood. Is it easy for customers that are driving by to navigate into your location? Is parking a major concern? Are there any additional activities or festivals that happen in the area that could add or pull traffic from your business?
Again, this is where the experiences of a great franchise group can make the difference. Many of our owners and managers have been through all the situations and experiences you may be trying to visualize. A few strategic questions sent their way can be the difference of a flawless grand opening or a franchise that never gets off the ground.
Have a location in mind that you believe would be perfect to create the next Joey’s Restaurant or Joey’s Urban? Contact our franchise team today and ask for your free information package that will outline exactly what your future as a franchise owner may look like!
