It is a cliché that the three most important things in the property’s desirability are location, location, and location. This is not entirely true, but it does emphasize the point that the right site for a business can be the difference between a successful ongoing venture and one that quickly goes out of business.
This applies to opening a new brick and mortar shop or finding a desirable location for a potential franchise. If the latter is the case, the company selling the franchise will likely insist on input on the site and any standing structure, so it is wise to get some guidelines if looking for a property with a specific franchise in mind.
The metrics involved
A store on a busy thoroughfare will likely see more walk-up traffic than somewhere off the beaten path. Spots off the main drag can look at specific targeting that may not be tied to a location as long as it is accessible, while others like a gas station make sense if they are on a corner of a busy thoroughfare. Retail property experts analyze a property using the following:
- Visibility: Getting the potential customer’s attention is the first step to making them a paying customer. A good sign or structure that stands out will help, but the customer needs to see it even if they are driving.
- Accessibility: Is there enough parking? Is there easy access to the parking lot from both sides of the street? If in a mall or shopping center, is it located near the big box or anchor stores?
- Similar businesses: It may work to position a business in a district where your target clientele frequents, possibly to shop at similar types of stores. Or it may work better if the new shop offers goods and services not already sold in the area.
- Construction: Even the most reliable shopping districts or stores can fall victim to long-term construction projects that reroute traffic, eliminate street parking, or create undesirable levels of noise and dust. Although this is not always predictable, lease terms that protect you in that instance can be critical to the success or failure of the business.
Professional guidance can help
Many retail businesses close after a few years, so the location can be a crucial ingredient to the success or failure of the business. It also helps to have a realistic lease agreement. Owners looking to open or build out a space are wise to work with an attorney experienced in commercial real estate leases to give the business every opportunity for success.