The Franchisee’s Guide to Location Selection


One of the most critical choices a franchisee will have to make is where to locate their business. The physical presence of your business is often the deciding factor in its success, so choosing the right location is crucial. The purpose of this blog is to assist franchisees in navigating the challenging process of selecting the best site for their franchise.

1. Recognise the requirements of your franchise. 

Every franchise has unique requirements and target demographics. It’s essential to thoroughly understand your franchise’s specific needs before you begin the location selection process. Consider factors like the size of the space you need, the target market you’re serving, and any specific geographic requirements the franchisor sets. 

2. Market research and demographics 

One of the first steps in location selection is to conduct comprehensive market research. Understanding the demographics of your potential customer base is crucial. Consider factors like age, income, lifestyle, and local interests. You can use this data to pinpoint regions with high demand for your goods or services. 

3. Competition analysis 

Analyse the competitive landscape in the areas you’re considering for your franchise. Assess the strengths and weaknesses of your competitors, their market share, and customer reviews. The ideal location for your franchise is one where you can make an impression and offer something unique compared to the competition.

4. Accessibility and Visibility 

Accessibility and visibility are key factors in location selection. Ensure your franchise is easy to find, preferably in a high-traffic area with plenty of parking or near public transportation. A highly visible location can drive foot traffic and increase brand exposure. 

5. Consider local laws 

Local regulations, like zoning laws and building codes, can significantly impact your location selection. Ensure that the potential locations comply with these regulations and obtain any necessary permits and licences. Non-compliance can lead to costly delays and legal issues. 

6. Traffic patterns and visitor numbers 

Examine the flow of traffic and the amount of foot traffic in possible places. Locations with heavy foot traffic, like shopping centres or downtown areas, are often ideal for retail franchises. Proximity to major roads and highways is crucial for businesses requiring vehicle access. 

7. Lease conditions and expenses 

Carefully review lease terms and costs for each potential location. Consider rent, common area maintenance fees, and additional charges. Ask the landlord for a dummy invoice, as additional costs can be as much as 30% of the basic rent. Negotiating favourable lease terms can significantly impact your franchise’s profitability. 

8. Proximity to suppliers 

For franchises that rely on a consistent supply chain, proximity to suppliers is critical. Being near suppliers can help reduce transportation costs, ensure timely deliveries, and maintain inventory levels. If your site is more remote, ask the franchisor whether transport costs are included in the financial projections for your site.

9. Opportunities for development 

Consider the long-term potential of the location. Is it likely that the region will expand in the upcoming years? In the long run, your franchise may benefit from being close to a commercial area or an expanding residential community. However, new centres may take some time to gain traction, so consider increasing your working capital to compensate for this.

10. Seek guidance from experts 

Seek the assistance of professionals who specialise in choosing locations, such as advisors who specialise in market research, real estate agents, or site selection consultants. They can provide insightful information and support you in making wise decisions.  


Selecting the ideal site for your franchise is a complicated process with many different aspects to consider. The ability to choose a location that meets the particular needs of your franchise, caters to your target clientele, and offers room for expansion is critical to the success of your enterprise. 

You can improve your chances of choosing a successful location by conducting in-depth market research, examining the competition, and considering elements like accessibility, visibility, and lease terms. When in doubt, consult an expert, and remember that a successful franchise starts with a carefully selected location. This article was compiled with input from Andre Annandale, Director of Research Matrix. For more information, please email us at [email protected]

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