Is the Location of a Franchise Important?

Location in franchising

Your Guide to Franchise Ownership

There is an estimated 775,000 franchise establishments in the U.S., and that number continues to grow. Why? Because the franchise model works! By leveraging a proven system, support and training, you can step right into a franchise business much more seamlessly than starting from scratch. But you have to do your due diligence... and that's where the IFPG Franchise Buyer's Guide comes in.

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Franchise Site location is Everything for Business Owners

The old saying, “location, location, location,” definitely applies to franchise business ownership. But why is location important? Where you put your business can be as important as how you run it. especially with brick-and-mortar franchises. If you don’t pick a great location, then your business could suffer. It could be hard to gain traction within the community and get the foot traffic you need for success.

One of the benefits of franchising is that franchisors will provide you with site selection assistance and the help of a real estate team. To determine where it would be most beneficial to establish the franchise, the franchisor will do a study to find an ideal demographic and determine the competition that your business will face.

Here are tips for choosing a good franchise location.

Franchise Location Planning

Focus on Areas with Heavy Foot Traffic

Brick-and-mortar locations rely on customers coming in and buying a product or service. If you run a brick-and-mortar franchise, such as a retail store or a restaurant, you will want to set up shop in an area that is heavily populated. The demographics can also come into play. Do you want to own a family-friendly restaurant or operate a child-related retail business? If so, then your franchise should be near other businesses where families shop.

Be Aware of the Competition

Before opening any business, you need to be cognizant of the competition in your area. This will help you decide if opening the franchise is worth it and if you’re positioned to compete with other businesses. For example, if you are the only coffee shop in town, then you don’t have to worry about any competitors taking business away from you. But if there are multiple coffee chains that are already competing with each other in one territory, you may want to reconsider the franchise entirely or look for another area to open the business. It will also benefit your franchise to be located near other businesses that have similar customers. For example, if you run a tutoring business, consider setting up shop near a school, library, or park.

Visibility is Key

When it comes to franchise location selection, visibility is key. If your brick-and-mortar location doesn’t get a lot of foot traffic and is out of sight of highways and other key roads, then potential customers will likely not know that it’s there. When deciding the ideal location for your franchise, consider a location that has visibility.

franchise location

Keep Local Regulations in Mind

All states and localities have different regulations for businesses, so you need to be mindful of them. Check with the local township to ensure your business will be in compliance. Whether you are buying an existing business resale or constructing a new franchise site, location plays an important role in the success of your business. In addition to working with your franchisor, seek assistance from an attorney to represent you and your interests. Landlords and real estate brokers will also be important players in this process. All of this should be kept in mind when deciding on the right location for your business.

Customer Demographics

An important aspect of your franchise business is your customer. When considering franchise location selection, there are important demographic factors to consider: age, income, education, family size, and more. All of these factors can impact the success of your business. For example, if you're looking to open a pet-related franchise, you'd want to find a location around families who have disposable income to get a pet and all that comes with it. Like purchasing a home, it is important for a franchise owner to know the area where their business will reside. 


Many of your customers may need special accommodations, such as wheelchair-friendly ramps at entrances and exits. When choosing the location of your franchise business, keeping the entire public in mind is crucial. For full details on special considerations that business owners are mandated to follow by federal law, you can check out the Americans with Disabilities Act


As a franchise owner, it's important to put yourself in the shoes of your customers. You can do this by considering details that are important to you when you visit a business. A detail that can be overlooked is parking. Parking lots offer customers safety and convenience, which many will appreciate. The cleanliness of the parking lot is part of the customer experience, so keeping it tidy is another aspect of the business to consider. Curbside pickup is an added revenue stream for many businesses, so having space where customers can safely and efficiently park can be a differentiating factor for your franchise.  

Why is Location Important for a Business?

Although it seems cliché, “location, location, location” definitely applies to franchise ownership. With the help of a real estate team, many franchisors provide franchisees with site selection assistance. When deciding on an ideal location for your franchise business, aspiring franchisees should focus on areas with heavy foot traffic, be aware of the competition in your area, and keep local regulations and consumer demographics in mind. 

It is also important to consider if you want to construct a new location or engage in a resale. A study on the economic benefits of buying a franchise resale from Palm Beach Atlantic University’s Rinker School of Business stated that franchise resale prices were 1.5 times more in comparison to non-franchise businesses.

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