The Search For Truth: Properly Researching And Geo-Targeting New Franchise Locations
Olympia Fields, IL – A favorite component in my own personal development is absorbing the amazing work of Professor Steven D. Levitt, world famous economist from the University of Chicago, and his journalist cohort Mr. Stephen J. Dubner with their Freakonomics series of books, movies, and ongoing podcasts. The micro-economic analyses and techniques they use to “drill down” to reach their conclusions of how results are achieved (or could potentially be achieved…) are nothing short of amazing. I began reading their first Freakonomics book when it was first released, and was immediately hooked, now downloading every podcast, re-watching every clip and movie, while constantly sending the books out as gifts to family and friends like some kind of cult enthusiast. Although some of the conclusions that they and their army of friends in the world of economics arrive at can be almost “frightening” in scope, I never cease to be impressed by the level of thought and hands-on research that encompasses their topical, targeted work.
Due to the nature of my work as the VP of a franchise consultancy, many late nights are spent absorbing mountains of data derived from both clients and our own strategic team on all facets of a given franchisor’s process to make certain the best decisions are made in moving forward in each phase. One of the many challenging decisions of opening each store or service location is properly researching all of the variables involved in geo-targeting the best spot(s) accurately. If you are locating in a mall or a strip center, you can rest assured that the owners of the real estate are painfully familiar with the positives and negatives of any given property. The best developers use the latest video and other digital tools to plausibly define the demographics and traffic patterns for their units at nauseum, as well as collecting the hard data on gross sales and most other fundamentals.
It is an integral part of any responsibly drawn franchise sale agreement that the franchisor has the final say and approval of any given location and its required components, protecting the brand, and having the ability to cancel the deal on an inappropriate property or environment. These agreements should always be attorney reviewed and customized for each franchise offering.
I am many times amazed at the lack of “hands-on” research and monitoring that franchisors put into the approval process of new locations to benefit both themselves and their franchisees. You don’t need to do a painful two-year location study to derive the appropriate amount of data to approve a location. However, it can be a great investment to go beyond the data that the location owners want you to absorb, and do some due-diligence yourself, including video surveillance and statistical analyses. Many local and environmental factors can radically change the viability of a location, and although many of the critical statistics may seem obvious when reviewing the generally available data, a reasonable investment in monitoring traffic patterns, demographics, the overall “feel” of a location and the like are more accurately analyzed by creating your own data sets. A well documented market study will give you a great working platform, but there is no substitute for hands-on micro-intelligence gathering before making a long-term investment in a location.
It is always pleasing when a client spends a good amount of time explaining the look, feel, demographics, and overall performance of a location they wish to acquire. What makes their zeal for careful selection even more enjoyable though, is when they can back up their assertions with the best data possible prior to signing the lease, or acquiring a property. Make this micro-analyses strategy a crucial part of your market research budget, and work hand-in-hand with your franchisees to protect both their interests and your own.
Interested in learning more about franchising and/or how to franchise your business? Visit http://www.francorp.com to download the free e-book and take the franchise quiz today! For more immediate assistance call 800-FRANCHISE (800-372-6244) to speak directly with a franchise analyst to learn more about taking your business the next level and beyond.