Let me start off by sharing my view on ‘location, location, location.’
While it’s true that securing a great franchise location can be critical to your success, it’s only one of many things that can contribute to your ultimate success as a franchise owner.
Most of the people who work with me, who use my franchise ownership advisory services, bring up location pretty early on in our discussions. They’re really focused on getting a good location for their yet-to-be-chosen franchise business.
While the importance of choosing and ultimately having a good location can and sometimes does dictate the success of a franchise business, it’s a massive waste of time for my clients (and you) to allow location-related thoughts to occupy a lot of your time as you try to find that perfect franchise opportunity.
Tip: Don’t obsess, worry, or even think about location until you decide on a specific franchise and you’re towards the end of your research process.
Should I trust the franchisor to pick a good franchise location?
In a word: Yes! Of course.
Why wouldn’t you trust the franchisor to help you secure a great location for your franchise business?
Don’t you think they want you to succeed?
Stop with the paranoia. Don’t listen to people that have ‘heard’ of franchisors that have purposely picked bad locations for their franchisees.
Here’s why it would benefit you to ignore crappola like that:
The more you make, the more the franchisor makes. If you become the owner of a franchise business, you’ll be sending in a monthly royalty cheque to the franchisor. It could be four, five, six, even 10% of gross sales. So, if your franchise does R1,6 million in annual sales, and the royalty is 6%, the franchisor gets R96 000 from you. And, they get 6% from every other franchisee, too.
Do the maths. The franchisor wants you to succeed. They want you to send them big, fat cheques every month, for the life of your franchise agreement, which is typically ten years.
If they want to be a successful franchisor, they need your franchise location to be a successful one. They need you to be successful.
So before you go diving straight in with a location before you’ve even picked a brand, do the following:
Choose, research and purchase
- Do things in the right order
- Make sure you’re a fit for franchising
- Choose a few opportunities to explore
- Explore them and learn about them
- Do great franchise research
- Have a franchise attorney look things over for you
- Write a formal business plan
- Apply for a franchise loan
- Make your decision
- Find a great location with the help of the franchisor
- Open for business.