Using Real Estate Professionals, Building, And Getting The Property Ready To Open

By now you probably understand that the franchising model can make many business start-up decisions quicker, easier, and more efficient. You've bought into the fact that you have a proven product, an effective system of distribution, and a regionally or nationally recognized brand, among other benefits. But when you're ready to sign on with a franchise company and open your store, they may assist you in the site selection process and maybe even lease negotiations, but you will most likely be required to handle land acquisition, construction, and building matters on your own. It's an important - and capital intensive - strategic issue and you want to do it right.

Commercial real estate and property or land acquisition can be a complicated matter, but it doesn't have to be. Look for a real estate company or agent with a solid reputation and, preferably, one with experience in franchise operations and building. Work closely with them, seek their advice, and heed it.


Depending on your situation, you may be able to move right in and open up for business in an existing facility or you may be building from the ground up. Each scenario has its own unique set of challenges and opportunities. In many cases it's easier to begin with an existing location but if you are starting from scratch, you'll want to be mindful of things like: doing strategic market research and analysis of proposed areas; land acquisition; engineering; architectural design, financing, and, of course, building and construction. This is probably going to take months, if not longer, so be patient. Work closely with all of your business partners - especially your franchise reps - and stay current on the latest developments.

On the other hand. if you're lucky enough to find an existing structure to move into, you'll have a whole other set of issues to consider. Like how soon the landlord is able to turn over the building for you to move in and start building out the new interior. If the space is immediately ready, you can expect a few weeks for architectural work, a couple of months to obtain building permits, and a couple more months to complete construction. Of course all of this will depend upon roadblocks and other unforeseen circumstances you encounter.

It's important to understand that whether you will need to build, buy, rent, or lease, there will be real estate costs involved. These costs may include: security and rent deposits, building construction or improvements, civil and architectural drawings and professional fees, zoning expenses, and landscaping.

Here's a roundup of some of the fundamental things you'll need to give careful consideration to when building and opening up your new franchise location:

Land Acquisition - Based on your territory and any other franchise requirements you'll need to determine the best potential property available and negotiate effectively with the real estate developers.

Development - It's critical to make sure that you develop and build out your new location to meets the franchisor's specs. That means following all requirements and meeting deadlines.

Zoning - Make sure you find properly zoned areas for your type of business. There are numerous commercial and retail zoning restrictions and requirements on properties. Your real estate professional should be able to help you.

Construction - Everything from architectural drawings to identifying qualified contractors can affect the construction of your new location. Again, do thorough research and make informed decisions.

Permits & Licenses - Depending on local, state, and federal requirements, you will need to obtain certain permits and licenses to open your new location. This could include, among other things: fire department, air and water pollution control, or sign permits; and business, liquor or sales tax licenses. The franchisor will generally provide you with a specific list of permits and licenses required, but you'll want to be aware of specific laws in your particular city and state. Always check with local and state offices to be sure you obtain what is needed.

Getting your new franchise store up, open, and operating can be a challenge for a new franchisee. But if you do things by the book it should be manageable - and might even be fun.

9.2: Other Factors To Consider
9.4: Training

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Multi-Unit Franchisee Magazine

Issue IV, 2015

Multi-Unit Buyers Guide    

2015 Multi-Unit Buyers Guide

Special Edition

A Franchise Update Media Group Production
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