Location

✅ Short Definition

Location refers to the specific physical or geographic place where a franchise business operates. In franchising, the location is a critical factor in determining customer access, visibility, and overall success. It must be approved or selected in accordance with the franchise agreement.  Also see “Site.”

🧾 Long Definition

In franchising, location describes the designated site where a franchise unit is established and conducts its operations. The selection of a location is often a joint effort between the franchisor and franchisee, guided by market research, demographics, traffic patterns, and proximity to competitors or complementary businesses. The franchise agreement typically outlines how the location must be chosen, whether the franchisor approves it, and what happens if the location changes. Some franchise systems provide a protected territory around the location to ensure market exclusivity. A strong location can drive brand recognition, customer loyalty, and sales, making it one of the most important components of franchise planning and development.

Learn more about franchising in The Educated Franchise - 3rd Edition

🕰️ History and Usage

The importance of location in franchising has been recognized since the earliest franchise models in the 1950s and 1960s, especially in food service and retail sectors. As franchise systems expanded, brands realized that a prime location could be the difference between high performance and failure. Franchisors began developing site selection criteria and offering assistance in lease negotiation, design, and build-out. Today, the term is not just about geography—it also encompasses site suitability, accessibility, parking, signage visibility, and alignment with the brand's target customer base.

❓ Five Common Questions About Location

1. Can I choose my own location as a franchisee?
   Often yes, but the franchisor typically must approve it to ensure it meets system standards.
2. Does my franchise agreement include a protected location or territory?
   It depends on the franchise system; many do include protected areas to prevent internal competition.
3. What factors are considered in choosing a good location?
   Traffic flow, visibility, demographics, nearby businesses, and lease terms are all important factors.
4. Can I relocate my franchise to a different location?
   Only with the franchisor’s approval and often with an amendment to your franchise agreement.
5. What support does the franchisor provide in selecting a location?
   Many franchisors offer site selection guidance, real estate assistance, and approval services.

📝 Examples of Common Usage for ‘location’

• 'The franchisee must receive written approval from the franchisor before finalizing a location.'
• 'Failure to open the franchise within the agreed location may result in a default under the franchise agreement.'
• 'The franchise agreement includes an exclusive territory surrounding the franchisee’s location.'

📌 Summary

Location is a cornerstone of franchise success, affecting visibility, customer traffic, and profitability. A carefully selected and franchisor-approved location ensures alignment with brand standards and increases the likelihood of operational success. Every franchise agreement should clearly define how the location is selected, approved, and managed throughout the franchise relationship.