5 Rules for Choosing a Store Format and Site for Your FranchiseAuthor: Smoothie King
Just as Smoothie King stands out among quick-service franchise concepts with a clear mission of Smoothies With a Purpose™ to suit the goals of each of its guests, the brand applies the same guiding principle to working with franchisees to provide them with general site selection and guidance in the selection of an acceptable site and store format.
Each Smoothie King format – from freestanding stores to drive-thrus, airports, college campuses and hospitals, food courts, mall kiosks and even gyms – is designed with a purpose to fit opportunities most suitable for franchisees and their markets. Similarly, Smoothie King’s real estate professionals work purposefully with franchisees to provide site guidance, bearing in mind the importance location plays in the success of a business.
Building The Right Foundation
John Gordon, a Smoothie King real estate manager for 10 years, explains the approach to site selection and store format has grown more sophisticated, with five main factors playing a key role:
1. Visibility, Accessibility and Convenience
“When we had 100 – 200 units, we were just trying to break into markets and introduce the brand,” Gordon said. “These days, Smoothie King is trying to work with franchisees to assist them in their search to find the best sites available in terms of visibility and accessibility.”
For example, Gordon noted that 24/7 traffic is critical, with a mixture of residential and commercial traffic. Ideally, franchisees will be located in areas with strong morning and afternoon traffic, with 20,000 cars per day in traffic volume. In terms of population density, target markets will have 30,000 people within a 7-minute drive of the store, which will particularly benefit stores with drive-thrus.
The average Smoothie King store footprint is approximately 1,200 square feet. When locations are less than 1,000 square feet, the width is usually restricted, which also confines your signage. With that format, it’s more likely to be in an urban location where rent may be high, there may be restricted hours and it may be a drive-thru-only scenario. But, ultimately, store size depends on the franchisee’s objectives.
2. Drive-Thrus Driving Business for Smoothie King
In today’s real estate market, drive-thrus are king, often reporting stronger sales than freestanding stores without a drive-thru.
“You see more concepts in real estate move into a drive-thru or pick-up format,” explained Gordon. “Amazon, for instance, is even planning to install a drive-thru, pick-up scenario.”
In short, convenience is key. If you think about the day-to-day life of a young mom with two or three kids in the car, she doesn’t want to get out of that car if she can avoid it. And if she can provide a snack for her children and a meal replacement for herself, Smoothie King is in an excellent position to do that for her.
3. Intelligent, Market-based Decisions
Store format is driven in many ways by the market.
“At the end of the day, we see franchisees who want to bring drive-thrus to their franchise locations as often as possible,” Gordon emphasized. “But sometimes it’s just not feasible, due to zoning restrictions or the cost of commercial real estate in certain markets. It’s not uncommon in many urban areas where there are planning committees pushing for more sidewalks and parks, trying to create more pedestrian traffic.”
When a brand is trying to develop new locations in a city, it needs to have some guest-generating locations to create brand awareness. As a result, high-profile buildings are often at the top of the list.
For example, in Dallas or Houston where Smoothie King has a pretty strong foothold with 40 or 50 units and is still growing, a new franchisee may open a mall kiosk store due to the existing brand visibility. In areas where the brand has less brand awareness like Kansas City or Denver, the first five units wouldn’t likely be in malls.
4. Built to Fit Consumers’ Lifestyles
Smoothie King’s target consumer audience is interested in maintaining a healthy and active lifestyle, meaning guests tend to skew younger between 16-35 years old. This provides a fairly broad range of guests, including students, working professionals, and stay-at-home parents.
Smoothie King franchisees may choose to look for major traffic arteries where people are heading to and from work, school, the gym or grocery stores. According to the Food Marketing Institute, consumers typically visit supermarkets 1.5 times per week. So, building a Smoothie King that’s on a natural motorway allows the brand to stand out as a destination during the trip.
Meanwhile, the International Health, Racquet & Sportsclub Association found that more than 64 million Americans used a health club in 2015, with 55.3 million belonging to a health or fitness facility. With the right location, that provides a significant number of potential guests, for whom Smoothie King can become a habitual part of their workout regimen.
5. Mutual Success Through Co-Tenancy
When Smoothie King works with new franchisees to locate ideal sites for development, it’s always important to consider other retailers who target the same demographic.
“We’re looking for successful co-tenants,” Gordon explained. “We’re looking at the most successful brands out there who have done their homework as well.”
For instance, Starbucks, Massage Envy and Panera are just a few brands that have a similar target consumer audience and open stores in competitive locations that combine visibility with accessibility and convenience.
What The Future Holds For Smoothie King
One major consideration for Smoothie King and other retailers is new construction. During the Great Recession in 2008 and 2009, many companies backed off new construction. There are some markets where new construction is prevalent and things are moving well—Texas and Denver, for instance, continue to grow at a good pace.
However, other markets pose a different challenge. A lot of brands out there – Smoothie King included – have been working very diligently to help franchisees take on second and third-generation spaces. In keeping with its drive for innovation, Smoothie King continues to think outside the box to establish the same quality of franchise locations that it has helped develop over the past 10 years.
For more information about the franchise opportunity, download the Smoothie King Franchise Kit.