This month, the leading franchise Subway announced that it plans to open up 69 outlets in the forecourts of Euro Garages across the UK by 2016. It operates 20 with Euro Garages already, having first launched one at Ashton Road in 2005.
Trevor Haynes, Subway’s area development manager for the UK and Ireland, has said that the convenience and forecourt sector is a key area of growth for the Subway brand: “The simple operations that are involved in running a Subway franchise and the convenience offer make it a perfect fit for these style locations.” Other unusual Subway locations around the world include colleges, sports arenas and even a Baptist church in New York. The ability to run your business from a variety of non-high street locations must be extremely useful. But not every franchise is so flexible.
Variables to Consider
Some franchises don’t require any premises – your customer’s plumbing isn’t located in a high street shop – but most do, and their location will heavily influence their business activity. Whether you are looking for a large, multi-story commercial warehouse or just a two-desk office space, property hunting and negotiating can take several months and patience and you need to put aside time in your business plan accordingly. Things to consider include the common elements such as size of the premises, rent costs, the number of local competitors and so on, but also the factors more significant to franchises:
• Territorial rights – some franchisors set exclusive trading territories and prime marketing areas as part of the franchise agreement. It is necessary to use a map and clarify this exactly, to prevent franchisees seeking new business and performing in each other’s geographical areas.
• Your sort of trade – it may take some time to get the premises ready for business, and the building must have planning permission for your type of trade. Catering franchises in particular require premises with certain fittings and fixtures.
• How flexible you are geographically – some companies, particularly high-street retailers, need to be in a prime location with a worthy level of passing trade, such as in a shopping centre. On the other hand, franchises that are van-based are much more flexible and it’s easier to travel that little bit further to get to a customer.
The Location Types
Below is the result of the bfa/Natwest Franchise Survey 2012, showing the locations where franchises in the UK currently operate:
The winner, by ten per cent, is working from home. While this can lead to a lack of human interaction, it is still an act that has proven beneficial when it comes to higher productivity, a better work/life balance (ideal for stay-at-home parents) and of course the ability to be your own boss – one of the main appeals of franchising in the first place. While online retailing has exploded over the last 15 years, there are still many franchise categories – especially catering – fitting into the second most popular location (shop/retail premises) that will not be able to operate from home offices for the foreseeable future. Even Subway hasn’t conquered it yet.