What You Need to Know about Non-Traditional Locations
Jul 31, 2018
By: John Gordon, Director of Real Estate
Among the recent trends in the franchise industry, we’ve seen an especially impressive surge in the number of restaurant franchises cropping up in non-traditional locations. For franchisors and franchisees alike, these locations can present the perfect opportunity to tap into an existing base of convenience-driven consumers – whether they’re getting on a plane or finishing up a workout.
Non-traditional locations span a broad range of commercial and non-commercial areas, including malls, airports, gyms, military bases, hospitals and college campuses. These locations can provide strategic growth opportunities for franchisors in new markets, while making it easier for new franchisees to get in on the action. Lower startup costs, limited real estate fees and fewer employees are just some of the benefits franchisees may find in running a non-traditional location.
While some non-traditional locations can hold numerous advantages for franchisor, franchisee and consumer, some brands may be apprehensive to adapt their concept to fit into these new venues. They worry adjusting their product and operations will be too difficult or they simply don’t know how to even go about deviating from the norm in their franchise system.
However, if you’re looking at the right factors in a location and have a solid support team behind you, breaking into a non-traditional location should be a fairly easy transition. And, it can be one of the best things you do for your franchise brand.
What to Look For in a Location
The factors you should look for during site selection will vary depending on the concept and location. One aspect of choosing the right non-traditional site will be opportunity-driven.
For instance, at airport locations, you’ll want to consider looking for airports undergoing construction to expand, or redevelopment plans that will ultimately result in more space. This usually means there will be greater opportunity to open in the location, since developers will seek out new restaurants and other concepts that would appeal to the people moving through the airport.
You’ll want to consider being a in a high-traffic spot that is highly visible and easily accessible. You should have the right branding in place so you can stand out to your target consumer, especially in malls or other commercial areas where other restaurant options exist. The layout of your store should be adaptable, and you should figure out the minimum amount of space you’ll need to successfully execute your concept.
At Smoothie King, for example, we can utilize locations with as little as 400 square feet of space – this gives us a broad range of available locations. We wouldn’t want to go much below this, since it would hinder operations and may result in a lower-quality product.
Find Your Niche
Before targeting a specific type of non-traditional location, make sure your typical guest frequents the places you’re looking at. The demographics of the people spending time in the area you’re focused on should align with your target guest profile.
You can work to take advantage of the high foot traffic in these locations, since this audience will already be familiar with your brand – and hopefully, already a regular guest. They’re more likely to stop at your franchise if they already know what they want, especially if they’re on the go or in a hurry.
Given your location has favorable demographics, the next thing you should consider is the activity your consumer will be doing at this location, and if your concept fits in well with this routine. For instance, if you’re a fast food concept, you probably won’t seek out locations in a gym. Not only do the demographics misalign, the atmosphere is not conducive to the concept. When people have just finished working out, the last thing they’ll want is heavy, greasy food.
Smoothie King has opened quality locations in hospitals, on university campuses and in airports over the years, so these are the non-traditional locations we set our sights on. The demographics of these locations, while diverse, line up well with those of our guests at traditional locations. And in all these locations, our guests usually don’t have time to stop for a full meal. Smoothies are the perfect low maintenance, on-the-go meal replacement or snack they’re looking for. We’ve been able to tap into these high-traffic areas simply by the nature of our product.
With the right real estate support in place, you can offer your franchisees the opportunity to expand into or start off in a non-traditional location. Not only will this get your brand in front of a captive audience, it will also give you and your franchisees more versatility and variety in your real estate options.