4 Tips for Selecting the Right Location for Your Franchise Stay true to your model and understand your guests so your new location will create the same experience they've come to expect everywhere you operate.
By Dave Ragosa Edited by Carl Stoffers
Key Takeaways
- Partnering with commercial real estate brokers helps franchisees identify prime locations, especially when franchisors lack dedicated real estate teams.
- Demographics and foot traffic matter, but in-person site visits reveal critical factors like accessibility, parking, and overall market vibe.
- Finding the perfect spot may take months, but waiting for a Tier One location ensures brand consistency and long-term success.
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There's no perfect formula for finding the right location for a franchise business; it's part art and part science, and the needs of a restaurant brand will lead that franchise to a different search than, say, a business consulting firm. But no matter what industry you represent, the mission is the same: Stay true to your model and understand your guests so your new location will create the same experience they've come to expect everywhere you operate.
Here are four essential steps that should be part of your search process:
Utilize local real estate brokers
The local brokers will be even more important if your franchisor doesn't have a dedicated real estate team to help you determine if your prospective location can support your franchise. But even a corporate team can't know every market in every state and town. One of your local managers' jobs should be to build great relationships with the commercial brokers in that market.
As you begin your search, make a wish list of all the features you want in your new location and group them into Tier One and Tier Two sites. Tier One locations will have all the critical areas you need, like substantial foot traffic if you expect a lot of walk-in business or ample parking if you expect guests to drive to you. Tier Two sites will list the must-have elements and indicate what you can give up.
Related: Explore the full 2025 Franchise 500 list, complete with category rankings.
Dig into the demographics
Market data is essential in judging where to plant your franchise flag, and traffic is one of the most significant data points. But don't just ask for raw numbers. Find out when the traffic flows to and from your business. If you're an entertainment venue, you won't want the most frequent traffic to be driving away from you at night. If you want your coffee shop to attract morning commuters, you don't want to be more than a block or two away from the subway or train station.
Your location should also be easy for drivers to enter and leave, which I call "the real estate within the real estate". There are great lifestyle centers, but there's a difference between being in the back, almost hidden, and being right near the main entrance so guests just have one turn and they're in.
That's why you can't expect a spreadsheet to tell you everything. Get your real estate team into a car and have them drive a three- to five-mile radius around where you hope to open. What does the market feel like? How is parking and the access to it? Is the location well-maintained and frequented by serious consumers, or does it attract a lot of people just hanging out?
Related: The One Factor the Top Franchises of 2025 Have in Common
Submit multiple letters of intent
Don't wait until you've chosen a finalist before talking with the property owners. You'll be in a better negotiating space when you put out three or four letters of intent, hoping to get one or two down. With more options, you won't be desperate to make a deal.
When you finalize an agreement, make sure a real estate attorney checks all the details — your liabilities, your covenant, your guarantees and other legal issues — so it's as much in your favor as possible.
Be aggressively patient
My motto has always been "Be aggressively patient." Look at as many locations as possible and be patient as you search.
When I'm looking for a new Ford's Garage location, I come up with that two-tiered list of features I want. Tier One has everything, and Tier Two has what I must have and what I can do without. I don't immediately settle for a Tier Two spot if I can't find a Tier One right away but keep looking for my ideal. I don't want people's perception of our brand to be a Tier Two version of our Tier One brand. So, I make sure we're patient in finding the right location.
It can take us a good six to nine months to find the right place if nothing is available when you're first looking or if there's a lot of competition. But when you finally open up in precisely the place you envisioned, with all the features and amenities you dreamed of, it's worth the wait.
