The Importance of Understanding Site Requirements for Your Retail Franchise Business
July 11, 2011 by Kathleen McDonald
Filed under Resources
Whether your choice is an auto repair facility or a pastry shoppe, a pharmacy or a flower stall, the single most important decision that will impact the success of your franchise business is the selection of its location. Any retail business, no matter how large or small, requires a strong market presence to attract customers and drive revenues. The right location is the key element to meeting these objectives to create a successful retail franchise business.
Each franchise business has its own criteria for identifying a successful location.
Criteria are based on the type of business and the demographic associated with target customer. For one franchise business a prominent storefront presence in a busy urban center may be required. This location, typical of commercial districts, features daytime and early evening pedestrian traffic. These locations are usually at or near public transit centers and offer easy access to popular bus and subway routes for residents, employees and visitors.
Another franchise business may be better suited to locations in retail shopping malls. In this type of location the customer is attracted to the major retail anchor tenants. These tenants reflect the economic status of a specific consumer group and this group of customers frequents this location. It is important when selecting this type of location to know your customer, such as their shopping habits and preferences, and to match these with the preferences and shopping habits of the average customer at the designated mall location.
Still other franchise businesses might be better suited to locations outside the city center. These suburban or rural locations may be either a free standing building or a storefront in a neighborhood retail center. Locations of this type need to be prominently positioned on well traveled streets or highways since it is the visibility of the location that will initially generate awareness of your franchise business. The location should have sufficient parking for customers and provide easy access and egress to the parking area. If the location is on a major highway it is important that the location be easily identified with appropriate signage. An easy on/off ramp from the highway to the site must be available to facilitate customer traffic to the location.
Whichever is the best site for your franchise business – downtown location, retail shopping mall, or a free standing building – the franchisor should provide site selection and evaluation guidelines. These guidelines identify the types of locations best suited to your franchise business based on a demographic identification of your target customer. These guidelines are the result of a careful analysis by the franchisor of franchise customers and their shopping habits. Knowing this information is key to better identifying and evaluating locations for your franchise business.
Typically these guidelines are provided as a manual outlining step-by-step instruction on how to implement a site selection survey. The survey, prepared by the franchisor, consists of a series of questions which are specific to understanding characteristics associated with a retail location. These questions identify major assessment criteria such as pedestrian traffic patterns or proximity to other similar retail competitors. A checklist may also be included to identify internal characteristics of the site such as availability of utilities or actual street frontage. The franchisee, when completing the survey, may be asked to include photographs of the location and the area immediately adjacent to the site.
The site selection survey is conducted by the franchisee. Upon completion the survey is submitted to the franchisor who is responsible for verifying its accuracy. The franchisor may request additional information, either from the franchisee, the site’s property manager, or the landlord. This information, in addition to demographic reports, traffic studies, and other data, is reviewed by the franchisor. Based on this analysis, the franchisor will then discuss with the franchisee the merits of a specific location for the franchise business.
It is important that before initiating the site selection process, a franchisor briefs the franchisee on what the requirements are for a location for the franchise business. While the franchisee is identifying potential locations, the franchisor should be available to answer questions and provide general guidance to the franchisee. Implementing a comprehensive process involving both the franchisor and the franchisee insures that both parties are establishing the framework for a strong working relationship. This framework is the basis for a successful long term franchise partnership.
About the Author. Ms McDonald is an international franchise consultant with experience in assisting local enterprises in developing their concepts as franchise businesses. Contact her at mcdonaldcabot@gmail.com or at www.mcdonaldcabot.com
Next Month: After the Lease is Negotiated, What’s the Next Step?
Is the Franchisor Providing Those Services Which Can Assist in Your Success?
June 5, 2011 by Kathleen McDonald
Filed under Resources
What services should be provided by franchisors?
- Site Selection. Only retail franchises require site selection assistance from the franchisor. The franchisor will have determined site criteria which include space requirements; suggested rent schemes; types of buildings within which the business is to be located; identification of site related amenities such as parking and public transportation; and general demographic profile of suitable market territories. Many franchisors provide a site selection manual which provides information and checklists to be used by franchisees during this process. The franchisor usually reserves the right to review sites prior to the franchisee initiating lease negotiation.
- Operations Manual. Upon execution of the franchise agreement, franchisees obtain a copy of the franchise’s operations manual. This manual contains proprietary information on operating systems associated with the franchise business. This information is owned by the franchisor and is regarded as confidential in nature.
- Training. The franchisor’s training program combines classroom and practical sessions. Training is scheduled over a period of time, averaging 2-4 weeks, and may include assistance at the franchisee’s business location prior to opening.
- Pre-Opening Support. This includes assistance in hiring and training staff, identifying local suppliers, selecting contractors for store design and construction, managing initial inventory and planning the grand opening promotion.
- Advertising and Marketing. Franchisors want to protect the franchise brand and one important way to do this is by managing all advertising and promotional programs. Franchisors create print, broadcast and electronic media which is used by franchisees in their local markets. Franchisors provide guidelines for creating franchisee web sites. Franchisors create national and regional advertising campaigns which are promoted with collateral materials made available to franchisees for use in their local markets.
- Operations Support. Franchisors provide oversight of operations to franchisees to insure that proper procedures are implemented by each franchisee. This oversight is intended to insure the integrity of the brand and to assist franchisee in improving their business to increase unit revenues and profits.
Next Month: The Importance of a Formal Site Selection Process for Your Franchise Business
What Type of Franchise is Best for You?
May 6, 2011 by Kathleen McDonald
Filed under Resources
Next Month: What Services are Franchisors Required to Provide Franchisees?
Useful articles about franchising in Bulgaria
Despite information about franchises in Bulgaria is scarce and difficult to find (at least, it was before our arrival) we can find several articles and webs which could be useful for those of you interested in having more information about this topic.
Information is power, so let’s go:
History
Bulgaria Country Commercial Guide FY2001: Franchising Market
In this article dated on 2001 we can find a good briefing about the situation of franchising in those years. It is a good option if you want to know more about the development of the sector. However, the most interesting part in the history of franchises in Bulgaria starts in 2006, with the opening of the two first shopping centers in the country (Mall of Sofia and City Center, both in Sofia).
BULFA (Old website)
There are several good articles in the old website of the Bulgarian Franchise Association, concerning the first franchises which entered into the bulgarian market and general information about the country. The page was last updated in 2002.
Nowadays
Bulgaria–bullish on franchising: Bulgaria’s franchise market is still mostly unexplored and untapped
By Miroslava Marinova, research analyst at FRANdata.
A very good article, containing some of the most interesting topics about franchising in Bulgaria.
Bulgaria – Franchising
Please, note this link goes to a .doc file (Doc type of Microsoft Word)
In this short but good article we can find the most well-known brands and the best developing sectors concerning franchises.
BULFA - Current site
And last, but not least, the current website of Bulfa. Last year they organized a seminar (”Franchising days in Bulgaria”) and they are preparing an event for the next september. Currently, the website needs a lot of work in order to improve the information availability, but it is an interesting site. We hope they start updating more frequently.
So, that’s all by the moment. We hope to be able to find more information for you in the future, and if someone of you is interested in sending us more data we would share with the rest of the people.
Our business consists in reaching the most of people with the biggest amount of relevant information, we are not interested in hiding nothing!
Image: Gordasm
Franchises in Bulgaria: the report
Here you can find the most complete documentation about franchising in Bulgaria.
- The first franchises appeared in Bulgaria in the 70s, but was in the mid-90s when the industry began to develop more strongly.
- Today, franchising is becoming the trend in some sectors, such as in the real estate agencies.
- In many sectors are already present major franchises (or chains that do not use franchise) international, which has not avoid the continued existence of some fairly strong local franchises.
- Despite the above, a large portion of the population is still unaware of this system, in part because of the limited information available.
- The franchising information is scarce and is highly fragmented. The data offered by the Bulgarian Association of Franchises (BULFA) are not very up-to-date and there is an Internet portal or a magazine specializing in the style of other countries that combine a reliable register of the master franchise available in the country.
- BULFA is undertaking initiatives in this direction, but there are still significant efforts to do, therefore, there is a market for niche publications, consulting firms and Internet portals interested in getting a development of the franchise save to a level closest to that of other European countries.
- A large part of the master franchise is in the hands of Greek companies.
- The attraction of Bulgaria has increased a lot with its entry into the European Union, which attracted more investment and franchising. In the next few years will continue installing important chains of the most renowned brands.
First Part: Coffeehouses
Second Part: Fast Food
Third Part: Commerce
Fourth Part: Services
Retail in Bulgaria
Retail in Bulgaria
As a first overview at the number of stores and the industry in which they operate. The latest figures on retail trade who supplied the National Statistical Institute (NSI) correspond to 2006. According to their data, the distribution in stores would be as follows:
| Non durable goods |
Year 2006 |
% |
|
Non-specialized stores |
32.215 |
77,00% |
|
Bakery |
2.338 |
5,60% |
|
Sweets shops |
2.037 |
4,90% |
|
Vegetables |
1.955 |
4,70% |
|
Beverages |
1.839 |
4,40% |
|
Butcher shop |
1.079 |
2,60% |
|
Fish shops |
394 |
0,90% |
|
Total |
41.857 |
100,00% |
Source: National Statistics Institute of Bulgaria. http://www.nsi.bg
The non-durable goods shops are mainly non-specialist shop, which usually have a small selection of the most typical products such as fruits, vegetables, canned products, oil, sugar, etc. The concept of neighborhood store, small and with a broad timetable, is widespread in the country.
|
Durable goods |
Year2006 |
% |
|
Clothes |
13.448 |
23,50% |
|
Non-specialized stores |
9.787 |
17,10% |
|
Pharmacies |
4.941 |
8,60% |
|
Car components |
4.292 |
7,50% |
|
Books |
3.213 |
5,60% |
|
Furniture |
3.054 |
5,30% |
|
Petrol stations |
2.898 |
5,10% |
|
Shoes |
2.773 |
4,80% |
|
Perfumery |
2.720 |
4,80% |
|
Varnish glasses, etc |
2.632 |
4,60% |
|
Electrical appliance |
2.523 |
4,40% |
|
Textile |
2.067 |
3,60% |
|
Construction |
1.855 |
3,20% |
|
Gas stations |
979 |
1,70% |
|
Total |
57.182 |
100,00% |
Fuente: Instituto Nacional de Estadística de Bulgaria. http://www.nsi.bg
In the consumption of durable goods shops, the most numerous are the clothing stores, followed in importance by non-specialized stores and pharmacies. According to data from the National Institute of Statistics, in the period 2005-2006 more products that have increased their sales have been those related to the automobile sector, telecommunications, televisions and radios, computers optimal, computers and household appliances.
