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Where should I try to open a fast food franchise?

Thursday, 2 June 2011 | By Graeme McCormack

I’m weighing up a few franchise locations with a major fast food chain.

 

One is on a fairly busy shopping strip [high street] in a nice area and another is in a huge shopping centre.

 

What are the pros and cons of each kind of location?

 

 

Typically, these two types of locations are profoundly different in terms of the way they will potentially trade.

 

In regard to shopping centre sites, assuming it is located inside the centre [as is most often the case] and not outside the centre, then the major benefits are that:

  • You have a regular captured audience of customers, including those employees of the various other businesses within the centre.
  • They can become extremely busy in extreme weather; heat, rain and cold days.
  • The centre “should” have a strong retail mix of fashion, home wares, entertainment, convenience, supermarkets and food businesses, to attract a wide variety customers across all day-parts, days and seasons.
  • The centre should have a strong marketing plan and events diary to attract regular visitation [which you will most likely be required to contribute to under the terms of your lease].
  • Centres are perceived as being safe, clean, and appealing place for staff to work and for customers to visit and spend time.

The typical down-sides of internal shopping centre sites are that:

  • You will only be allowed to trade at the times stipulated in your lease, and therefore will be unable to set your own trading hours and adjust them accordingly depending on your trading patterns and the requirements of your customers.
  • Rents are often higher in shopping centres when compared to high street locations.
  • The term of leases are often shorter in shopping centres when compared to high-street locations.
  • Store rooms are often in remote locations within the centre, away from the store itself.

In regard to high street sites, the major benefits are that:

  • Subject to local Council restrictions, you can set your own trading hours and adjust them accordingly to suit your trading patterns and the requirements of your customers.
  • Outside of your normal trading hours, you have the opportunity to stage local community marketing events/activities in-store which can be very effective way of growing your business.
  • Rents are often lower in high-street locations when compared to shopping centres.
  • The term of leases are often longer in high-street locations when compared to shopping centres.
  • Store rooms are often part of the store itself, and not in some remote location within a shopping centre, away from your store.

The typical down-sides of high-street locations are that:

  • You typically don’t have that regular captured audience of customers which you get in shopping centres.
  • They usually don’t have that controlled retail mix of fashion, home wares, entertainment, convenience, supermarkets and food businesses, to attract a wide variety customers across all day-parts, days and seasons.
  • These precincts usually don’t have any consolidated strategic marketing plan and events diary to attract visitation [this is because the sites which make up these precincts are often owned by various landlords].
  • When compared to shopping centres, they’re perceived by customers as being less safe, less clean, and less appealing to visit and spend time.