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Posted on Jan 05, 2011

The Franchise Site & Franchise Location Selection Worksheet

Any person running a retail type franchise business will agree that the selection of the franchise location is an absolutely critical factor in how successful the business will be. Whether it's a service franchise or a fast food franchise, it is necessary for the business owner to conduct a very careful location analysis.

Identifying the major traffic patterns, the availability of parking close by, the cost of utilities, the rent per square foot and various other aspects are just a few of the factors to consider when locating your franchise site.

The importance of franchise site selection is so high since it usually involves heavy investment into a single place often with lease agreements which bind one to the chosen site for a period ranging from 1-10 years. Therefore if you sign a lease and put in the necessary investment of furniture and for the outlet design then you are bound to the location for a long period of time and cannot switch that quickly.

Deciding upon the rent is also very important. Usually when franchises are opened in malls or strip malls the issue of timing also comes into play. Your franchises operations are bound to the timings of the mall and you have to abide by them otherwise penalties are imposed. So when you plan to open your franchise in a mall you should ensure that you would be able to operate in those times and would be able to follow their schedules.

Access to suppliers and customers is also vitally important in selection of the location for the franchise. The franchise should be easily accessible to customers as they do not want to be inconvenienced in trying to reach your establishment. That means that you need to ensure that your franchise is in a safe neighborhood, people have access to nearby parking, they do not have to be worried about their vehicle over a period of time, the franchise should be clearly visible and should not be around corners or have hidden entrances making it difficult to enter the franchise.

Similarly, the harder it is to access suppliers the greater the cost of the products becomes. For many fast food franchises the food is supplied to the franchise early morning but if your franchise has no parking available for larger vehicles and is extremely out of the way for the supplier than you can often experience poor delivery service and often are overcharged for the services rendered. The customer should be considered but the suppliers demands should also be weighed in when choosing a location.

Service franchises often do not face that much problem with site selection since they do not have such expense tied to their location and can be easily relocated. These businesses can be operated from home as the primary service is done by the people and these people can work from anywhere. But it should be seen that the location is not too far for the professionals and employees to access. This factor is common for the product franchises as well so when selecting a location the manpower concern should be considered.

Attached is a form that would shed light on some of the factors to be considered when selecting a franchise location and is a very good guide for anyone who has a variety of options to consider when choosing a location. The form would help you compare the benefits and disadvantages of each of the locations and would help shorten the list to the best option available.

The following worksheet offers a comprehensive analysis of franchise site locations and in the long run would help the franchisee in identifying a location best suited for them and their business.

Franchise Site Selection Worksheet

1. General Information:

a. Site Location:

Address:_________________________________

City:_____________________ State:_______ Zip:.

Frontage:_______ Depth:_______ Square Footage:.

Dimensions: Front:__________ Rear:_______

Left: Right:

Tax Map and Tax Assessment Numbers:_________

b. Seller/Landlord:

Name:_________

Tax ID#:_______

Address:_______

City:__________

Telephone( )

c. Seller/Landlord's Attorney:

Name:____________________________________________

Address:__________________________________________

City:_____________________ State:_______ Zip:________

Telephone: ( )___________ Fax:( )________________

d. Listing Broker:

Name:____________________________________________

Address:__________________________________________

City:_____________________ State:_______ Zip:________

Telephone:(___)____________ Fax:( )________________

e. Surveyor/Engineer:

Name:____________________________________________

Address:__________________________________________

City:_____________________ State:_______ Zip:________

Telephone:.(__)____________ Fax:( )________________

2. Legal Data:

a. Legal Description

b. Covenants and Restrictions

3. Site Characteristics:

a. Site Sketch

b. Improvements

(1) What improvements are on the site? Will demolition be

required?

(2) Does the site need cut or fill?

(3) Will permits be needed for soil disturbance and erosion control?

c. Site Utility Data

Service Line Size On Site Distance to

Hook-Up

Gas ________ _______ ___________

Sewer ________ _______ ___________

Water ________ _______ ___________

Electrical ________ _______ ___________

Telephone ________ _______ ___________

Storm Sewer ________ _______ ___________

d. Site without Central Sewer and Water

Is a septic system permitted? If so, has the Health Department issued a permit for a septic system?

e. Storm Water Management

Does the jurisdiction require a storm water management plan, or can the site be surface drained? Must the run-off be held on-site?

f. Contaminated Soil

Has the site ever been used either as a gas station or for oil or chemical

storage, a landfill, an auto salvage yard or similar use?

g. Easements

Will it be necessary to negotiate any easements external of the site?

h. The Subdivision Process

Will a subdivision, consolidated plat or similar work be required?

4. Zoning:

a. Current Zoning

b. Special Exceptions, Variances and Approvals

What is the estimated time to secure the requisite special exceptions, permits and approvals for a fast-food drive-thru restaurant?

5. Signage:

a. Freestanding Pole Signs

Is a freestanding pole sign permitted? How is the square footage of the sign's surface area calculated? What is the maximum permitted height of a freestanding pole sign?

b. Roof and Building Signs

Are roof signs that give the building corporate identity permitted? What factors govern the square footage of a sign's surface area then it is a part of the roof structure?

c. Off-Premise Signs and Highway Billboards

Are off-premise signs and billboards permitted?

6. Roadway and Traffic Data:

a. Primary Street

(1) Number of traffic lanes and speed limit

(2) One-way roadway or two-way

(3) Daily traffic countdate taken and source

(4) Traffic patterns and ingress and egress

b. Secondary Street

(1) Number of traffic lanes and speed limit

(2) One-way roadway or two-way

(3) Daily traffic countdate taken and source

(4) Traffic patterns and ingress and egress

c. Divider and Median Barriers

(1) Does the roadway have a divider or median barrier?

(2) What effect will the divider or median barrier have on access to the site?

(3) Can crossovers be constructed? Outline the process and include estimated permit and construction costs.

(4) What is the site's distance from existing crossovers?

(5) Are there any on-going or future changes planned for the roadway?

(6) What is the process for securing curb cuts into the site?

d. Deceleration/Acceleration Lanes

e. Roadway Sketch: show median strips, ingress and egress.

7. Tax Data:

a. Special Assessments

b. Tax Jurisdiction

When are taxes due, and what are the tax account and tax map numbers of the proposed site?

8. Educational Institutions (within three miles of proposed site):

9. Competitors (within three miles of proposed site):

National and Regional Competitors:

Name:_____________________________________________

Distance from Site:___________________________________

10. Customer Generators:

a. Shopping GeneratorsMajor Malls and Strip Centers:

Name:______________________________________

Distance from Site:_____________________________

b. Major Employment Generators:

Name:_____________________

__________________________

Distance from Site: _____________________

c. Other Generators and DrawsList all located within site's trade area.

11. Financial Considerations:

a. Purchase Terms by Franchisor to Build for Franchisee's Use:

(1) Purchase Price: %___________

(2) Cost per Square Foot: $_______

(3) Summary of Sale Terms and Conditions:____________

b. Lease Terms:

(1) Initial Base Rent: $__________

(2) Periodic Increases (percentages):____________ %

(3) Fit-up Contributions, Site Work and Landlord Improvements:_________________________________________

(4) Initial Term: years

Options Terms Exercisable for: __

Years at $________ per month

Carl Carlsson, FranchiseHelp Real Estate Division

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