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Location vs Brand

When looking to buy an existing franchise for sale, which is the most important factor to consider, location or brand?

We all know that franchising and brands go hand in hand – after all the whole point of buying a franchise is because of its brand awareness and all the reputation and product consistency that goes with it as part of a package.  For instance if you were to run a burger fast food restaurant yourself or run a McDonald’s, we all know which one is likely to be more successful purely based on brand reputation and historical business performance of the whole McDonald’s network.

This building up of a good reputation, does not come cheap or fast…. But good established franchisors have worked hard in building up their reputation and are unwavering in their strict discipline of following standards to the tiniest of details. This results in consistency, customer satisfaction, and therefore brand loyalty. So to buy an established franchise with a good brand name whilst more expensive at the start, should pay off many fold in the benefits it will bring the franchisee. A McDonald’s fast food restaurant generally will do much much better than ‘Any Name’s’ fast food restaurant, especially in attracting customers. It’s customers will know that they will get the same consistent burger and fries in any one of their locations, whilst an independent fast food restaurant, will be an unknown and therefore find it much harder to attract customers.

However, what if the McDonald’s franchise resale you were considering to buy was not ideally located? What if it was on the other side of the street from the going home traffic flow? Or it had restricted parking? In such a case, if ‘Any Name’s’ fast food restaurant was in the right location, it would have a better chance of success that a badly located McDonald’s. Even though as an unknown brand and name, its owner and staff would have to work extremely hard at building up a good and consistent reputation to earn customer loyalty. It’s the returning customer that generally makes many businesses successful. Having said that, it is unlikely that McDonald’s would choose a wrong location to build any of their restaurants, but it is not impossible.

It is therefore your responsibility – as the buyer to consider the location and the brand and make an informed decision before you buy the franchise that is for sale. The brand is not enough, the business needs to be in the right location for the customers and clients that it needs to attract and serve. Evaluating the location of the franchise resale is as important as its brand in the case of businesses that depend on ‘walk in’ customers.

It is not surprising that we often hear that a major key to the success of any business including franchises is its location. Location, location, location!

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