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I’m Considering Investing In A Retail Franchise. Will A Franchisor Assist Me With Site Selection?

Author: Shelley Nadler

answered by Shelley Nadler

Legal director at Bird & Bird

Many franchisors assist franchisees in locating and acquiring suitable premises for use as a retail franchise outlet. In some cases, the franchisee may search for premises for consideration and approval by the franchisor. Sometimes franchisors will actually find premises for franchisees.

Before a franchisor started to franchise, it would have worked out the right type of location for an outlet to be situated. Retail franchises rely on customers visiting the premises, therefore it’s crucial franchisors provide guidance and criteria for their selection, based on their experience of operating the franchise in other areas, to ensure franchisees chose the correct type of site.

Franchisors will also want to maintain control over the location of their franchisees’ premises in order to protect the quality and reputation of the brand.

Although the considerations will vary depending on the trading sector, franchisors would typically want to assess the type of street the premises is located on, the foot and/ or road traffic volumes, the demographics of different areas to determine the potential level of business that can be generated, environmental factors affecting the site and surrounding area, the exposure of the premises to potential customers and any landmarks that may generate potential business or have a negative impact on the brand.

Franchisors should also provide advice on the size of premises required and planning requirements, which is particularly important for a fast food, restaurant or café business.

Taking a lease of premises is not without risk and you should always consult a solicitor before committing yourself.

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