Opinions of contributing entrepreneurs are their own.
You’ve heard the old saying, “You can’t judge a book by its cover.” Actually, that’s not always true; customers judge a book by its cover all the time. In many cases, your company’s real estate and image are the first messages sent. Do customers notice your establishment? Do they understand the business by looking at it from 500 feet away? Is the image convincing?
Therefore, the right real estate often is the first marketing tactic to consider – certainly for any retail or restaurant business. If you don’t stand out, even on the busiest roads, you’ve got a problem. That’s partly why, op Frenchmartwe include marketing plans in the property approval process because once a lease is signed on a bad property, it is too late to fix the problem.
And here’s a chance to learn from my mistakes. Early in my career, I opened a restaurant in Silicon Valley and secured a location directly across from Google headquarters. I was elated: The property tested off the charts in terms of population density and disposable income. What could go wrong?
Here’s what we never thought of: Google feeds their employees for free – employs world-class chefs to make amazing food all day long. We had direct access to one of the largest labor forces in the country and couldn’t break through because none of them went hungry. Stupid mistake.
A bad site can never be cheap enough, while good sites pay you, so take your time to research locations thoroughly, including carefully assessing the trading areas and traffic patterns at different parts of the day (and on different days).
A few other critical factors to consider before locking your brand in the next location.
Related: How AI will transform the real estate market
1. Access
Most budding entrepreneurs don’t realize that every street has two sides: a breakfast side and a dinner side. Starbucks, for example, is precise with placement – often sitting on busy roads leading directly to freeways, and always on the side of the road leading to the highway in the morning. If your business isn’t positioned to capitalize on a target demographic while they’re on the move, then you’re out of luck. Also, customers prefer right over left turns, and if a site needs a left turn to access, it better be a well-lit one.
Finally, with the rise of third-party delivery apps, a site needs to be convenient for delivery drivers and takeout orders. The wrong property can cause a traffic jam in the parking lot, causing customers and delivery drivers to avoid it.
2. Visibility
My business is located on a busy street in Scottsdale, Arizona called Scottsdale Road, with over 50,000 cars driving back and forth each day. Your business is a free billboard on such busy roads, so make sure the location stands out. Think about the streets you normally drive on, now try to remember which brands you remember (probably a small percentage).
Know the area where you open like the back of your hand. What are the traffic patterns and major landmarks? Placing your business where it can be seen by the most people possible should always be the goal.
Also consider orientation. The building should be oriented so that the branding is clear and easily visible. (Standing in front of the entrance to a strip mall, for example, would be a goal).
Related: 4 Reasons Why New Franchisees Fail (and How to Succeed)
3. Co-rent
There’s a potentially fatal incongruity in placing, say, a high-end hipster cafe in a K-Mart-anchored mall. A brand must be congruent with nearby businesses. It’s not enough just to be in a strip mall, busy mall, or busy airport.
Sure, the evolution of outdoor malls or other malls has opened up opportunities for restaurant and retail franchises to find a home, but the downside is that competition has never been more intense. Finding the right place with the right co-tenants is therefore a strategy that you have to master. Centers with signature retail anchors like Whole Foods, Home Depot, or AMC Theaters are perfect — they typically attract large, diverse groups of potential customers.
4. Parking
Your building may look great, but if you don’t have the space to accommodate visiting traffic, you’re doomed. With the increase in delivery and takeout orders, having a parking space to accommodate sudden influxes (such as heavy crowds at dinner) is essential, and properties should be planned accordingly.
Also keep in mind that structured parking is a restaurant killer: it’s difficult to navigate, often crowded, and a hotbed for accidents and car damage. What’s worse, the general perception is that garages are unsafe: closed, dark and out of public view. Deliveries are also exponentially more difficult if you rely on them. Surface parking, on the other hand, offers quick access and good visibility.
Related: 5 mistakes franchisees make when looking for commercial real estate
One last tip: If you’re renting in a mall or open-air mall, finding space near a business with a different rush hour can make a big difference. If most of your business is done in the evening, finding a parking space near a coffee shop or breakfast restaurant can be a blessing for parking.
Contents
