says. “Then we sign a franchisee if he wants to be
there. Otherwise, it’s company owned.”
Baker Bros takes a cooperative approach, says
Kinder. “The first thing we do is work with the
franchisee and commercial broker and spend four
or five days in their market to see existing developments and new ones that might be a year
or two away. We make sure the broker understands the kind of trade area we’re looking for.
Once they come up with half a dozen locations,
we’ll drive those and study parking, visibility, access, demographics, and then either steer them
toward or away.”
Garlic Jim’s Bob Smith takes a similar approach:
“We do an extensive real estate orientation with
the broker and the franchisee so that everyone involved understands what the ideal real estate is for
our use. The broker then presents sites that meet
our criteria to the franchisee. Occasionally the franchisee will see a site that they are interested in and
will ask the broker to check on availability. In the
end, we always verify that the site meets our requirements and must approve it before the franchisee can move forward with lease negotiations.”
“The prime location for an area franchisee is
a location where you make the most money, not
necessarily the highest profile or the most sales,”
says Cirrus’s Brian Smith. “As an example,
Church’s is not going to open a store in the top
Garlic Jim’s Famous Gourmet Pizza, a “gourmet” carryout and delivery
pizza chain that also offers sit-down service in some locations.
malls in the country. Their best location is a C site.
They know their demographic. In 10 words or less
they know their perfect customer.”
Baker Bros basically takes that approach too,
says Kinder. “It always comes down to the business model,” he says. “For years, you could go out
and build a 6,000-square-foot restaurant and they
would come. Now the competition is fiercer, the
economics have changed from the bottom up. You
can charge only so much until the value point goes
away. So you’ll start seeing smaller footprints, and
people trying to tweak the economic model.” AD
