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Aug
2
2019
OWNERSHIP

How to Buy a Franchise: Five Steps to Identifying the Right Market

How to Buy a Franchise: Five Steps to Identifying the Right Market

If you are wondering how to buy a franchise, learn about the first step in identifying the right market.

As you research how to buy a franchise, keep in mind that identifying the right market for your business is one of the most important decisions you will make. Few factors can single-handedly make or break a business, no matter how many things you do right, like location. Selecting the ideal spot is just as critical as your product, staff and marketing. It sets the tone for your business and impacts what consumers think of your brand.

Finding the perfect location is something all owners must face, whether building their business from scratch or joining a site-based franchise system. Although the amount of support varies from company to company, most franchisors do provide a certain level of assistance. This help can be a big boost to getting your business off on the right foot. But, before you dive into the “where” of your location, you need to consider the “what.”

Select a Franchise Concept

Franchise concepts come in many different shapes and sizes. Franchisors often offer a variety of options to allow their franchisees to select the type of location that best meets the needs of customers in their community. Two of the most popular location set-ups are traditional and non-traditional.

Traditional Locations

Traditional locations are typically free-standing, meaning the business is located in a building used solely for the purpose of that business only. Such locations usually have their own dedicated parking lots.

Non-Traditional Locations

Non-traditional locations operate in a smaller footprint, typically within the confines of another property like a mall, airport, college campus, military base, hotel, convention center or a store-in-store within a smaller business like a pharmacy or hardware store. Non-traditional locations can also include carts and kiosks. This type of setup can be one of the best ways to get started in franchising since these locations often have reduced franchise fees, lower overall startup costs, lower real estate fees and require fewer employees.

Once you determine the type of location you would like to open, you can focus on identifying the right market. Here are five steps to help ensure you’re setting your business up for success as you learn how to buy a franchise.

Identify the Right Market

  1. Compare urban areas and rural communities – Rural markets are smaller and generally mean fewer customers, but that can actually work to your advantage. Fewer customers also means fewer businesses, which means less competition and increased visibility. Affordability is another advantage of a rural market. The cost of doing business tends to be lower than in urban areas thanks to cheaper real estate, utilities and other operating expenses. Some franchisors even offer financial incentives to open a location in a rural market, which can help boost profitability.
  2. Assess the competitive landscape – Are there businesses similar to the one you would like to open nearby? Depending on the level of demand in the area, competition could actually be a good thing. You might be able to secure the customers the others can’t accommodate. If there aren’t any similar businesses nearby, consider why. A lack of competition could indicate that there aren’t enough customers in the area to support the business.
  3. Consider accessibility and visibility – Factor in how easy the location is to find and get to by car as well as via public transportation (in urban areas). If the location is away from the main shopping area or tucked behind another business, it could be easily overlooked by customers. Also consider traffic patterns - how often people frequent the area and what brings them there like sporting events, movie theaters, retail shops, etc.
  4. Evaluate the neighborhood – Find out what the surrounding neighborhood is like. Is it up-and-coming or regressing? Check with the city or community planning office to find out what future construction projects are planned for the area and review zoning regulations to ensure there are no limitations that would impact your business. Also, look at the demographics of the area. Be sure enough of the population matches your customer profile to support your business.
  5. Review your budget – Depending on the area, how much you can afford could have a significant impact on location. Keep in mind that the rent or lease alone isn’t the total cost; there may be additional taxes or fees. The amount and type will vary depending on the location and whether you buy or rent. Don’t forget to factor in the average cost of utilities and insurance as well as hidden costs like renovations or upgrade installations, building maintenance and security.

Although most franchise systems assume you’ll do most of the legwork when selecting a location, the process is usually a team approach between you, the franchisor, a real estate agent or broker and a lease attorney. Some franchisors help alleviate the stress of identifying the right market by maintaining listings of open markets prime for development as well as existing units that are up for sale and ready for business. Perhaps one of the most helpful things you can do is to talk to existing franchisees about their experience opening a franchise location. This will help set expectations as you learn how to buy a franchise to achieve your dream of ownership.

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We Proudly Support Our Veterans

Participating partners with the VetFran program, The UPS Store offers qualifying veterans $10,000 off their franchise fee to start their new business. To learn more, contact The UPS Store Franchise Development Team.

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Ranked for over 30 Consecutive Years

The UPS Store has been ranked #1 in the postal and business services category for over 30 years and remains in the top 5 overall for the fifth consecutive year according to the Franchise 500 list.

Kristin Howard

Franchisee, Michigan

The reason my husband and I decided to go into franchising and specifically with The UPS Store, is the different opportunities we're given with the business. The UPS Store has name recognition as well as opportunities to expand.

Debbie Adams

Franchisee, Kentucky

What I enjoy most about being a The UPS Store owner is working with my customers. We are the solution specialists for our customers.

Jim George

Franchisee, Illinios

My favorite part about The UPS Store network is the camaraderie with other franchisees. Everybody loves to help everybody else. You’re really part of a family.

Greg Murray

Franchisee, Florida

The interesting thing about The UPS Store is that when a customer walks through the door there's an extremely high probability that they're coming there to do something that is important to them. So at the end of the day, what we do for customers is very important and they are trusting that we are going to do it well.

See the Full Testimonial

Mariana Huberman

Franchisee, Washington, D.C.

One of the things that I love about The UPS Store franchise system is that you're not ever in this by yourself. The franchisees of The UPS Store network are great.

Heidi Morris

Franchisee, Colorado

The thing I enjoy most about being a The UPS Store franchisee is I get to get up, go to work and know that I'm helping other business owners succeed in what they're doing.

Bob Brown

Franchisee, Tennessee

Owning a The UPS Store franchise has changed my life because it's finally given me the opportunity to engage my customers and my staff and be able to take real pride in what I do. As a franchisee, we get faced with solving peoples' problems every day and we do everything we possibly can to try to help.

Marie Jensen

Franchisee, Oregon

My favorite thing about The UPS Store is the variety. I love the variety of customers, I love the variety of services; getting to know the customers, meeting their needs, finding out how we can help them accomplish what they need to accomplish and seeing how happy they are. That makes me ecstatic.

Tad Mollnhauer

Franchisee, Florida

With the products and services that The UPS Store provides we can make a difference in people's lives and that is the best reason for being a The UPS Store owner.

Joy Batchelor

Franchisee, Idaho

What makes being a The UPS Store franchisee worthwhile at the end of the day is the customers. The customers treat us like we're family.

Paul Erchinger

Franchisee, Texas

One nice benefit of owning a The UPS Store franchise for me has been that it gives me the opportunity to be more involved in the community. As I make relationships with others it seems like no matter what the environment is, in one way or another business comes out of that and that's not my objective—it's been a secondary benefit to being involved in the community.

Chris Reminder

Franchisee, Ohio

There are several things that I really enjoy about being a The UPS Store franchisee. First and foremost it allows me to get to know the people in the local community and that is a lot of fun. We get to see people on a regular basis. We get to know their life stories. That's a lot of fun.

Bruce Jones

Franchisee, Kentucky

Since we have joined The UPS Store, our life has changed by just having more time to spend together as a family. We've been very fortunate with the stores that we have and we have a great staff that looks out for our best interest and we look out for theirs.

Lonnie Williams

Franchisee, Oklahoma

What makes The UPS Store so successful is it gives each individual an opportunity to grow with the network and just meet the challenges that are brought to them on a daily basis. Every day gives us a new opportunity to help another person, to help another small business, to answer a question and to solve a problem.

Jeff Graham

Franchisee, Alabama

I love my customers. I love my employees. I love every person, every face that comes into my store. I enjoy every day going into work and I can't see doing anything else for the rest of my life.

Stacie Stigar

Franchisee, Alaska

I think that this franchise is so successful because of all of the resources that are available to us as center owners—we have marketing materials, we have so many different opportunities for help from the home office, and it just really makes for a great franchise.

Don Pollard

Franchisee, New Jersey

I think the thing that makes this franchise successful is a number of things. First of all we have an outstanding system, we have a great product, a great brand, and we're able to attract dynamic people to run these centers and run the business. So I think when you put all that together it really provides for a winning combination.

Mary Ellen Nichols

Franchisee, Tennessee

The thing I love about the franchise is that you have the UPS name backing you but yet you also have the autonomy to make your own decisions to promote.

Laura Griffin

Franchisee, Florida

In the eight short months I've owned my The UPS Store it has really changed my life. I've gone from being an employee of someone else to being an employer of my associates. It's a big responsibility but it's exciting every day.

Sandy Scandrett

Franchisee, Wisconsin

Being a The UPS Store franchisee has improved every aspect of my life. It's very rewarding financially, professionally, and emotionally. I have a large number of regular customers who are really, really appreciative of everything we do.

Kristie Robison

Franchisee, Alabama

I would say owning a The UPS Store location has changed my life to where I have more time and flexibility. In owning your own business you get your store up and running and you get employees that you can trust that are going to help keep your store running. This allows me to attend my two boys' ball games and also travel and do things with them so it has really changed my life for the better.