Why choosing your premises has never been so important

16 November 2023

[Parole d’expert] Choosing the right business premises has always been essential, whether you’re setting up a franchise or not, but today’s retail environment and changing consumer habits make this a key stage in the franchise creation process.

A shrinking supply of available space, the difficulty of making large premises profitable, and changes in consumer behavior are making the task more difficult today.

High-potential premises increasingly rare

While there is not, strictly speaking, a shortage of supply, what is considered a “n°1” local has been tightening up for several years. Thus, in a city center, arteries considered “high potential” seem to shrink, and the price of premises tends to soar. The key is to find the premises offering the best “potential/price” ratio.

A similar phenomenon can be observed in shopping centers, where not all commercial cells have the same potential. We’ve all walked down the aisles of shopping malls where one empty space follows another, sometimes hidden behind large trompe-l’œil tarpaulins.

A “neighborhood/flow/accessibility” equation that must be solved

The first thing to do when choosing your premises is to inspect the surrounding area and make sure it’s compatible with your concept. What other activities and brands are already present? How long has it been? There’s nothing more natural than setting up shop close to those who are already attracting potential customers.

A frequent question then emerges: “Should I favor proximity to my competitors or, on the contrary, seek to distance myself from them as far as possible?” Contrary to a common reflex, it’s always a good idea to follow in the footsteps of your direct competitors, while taking care not to provoke negative reactions. What is the history of the premises? What activities have taken place at this address? This additional check, which is often omitted, will help us to understand the preconceived ideas of local customers.

This first step enables us to select premises that are ideal in every respect. But that’s not enough: you also need to check the flow generated: how many people is it made up of? Is it regular throughout the week? Is it qualified and does it correspond to the target clientele? It’s essential to study this flow with precision, and not be satisfied with a global figure: the more precise it is, the more it will be possible to adapt our offer and schedules. Numerous tools now enable us to refine flow figures with the utmost precision. Last but not least, you need to make sure there are no obstacles between your business and your customers: will they be able to park or take public transport?

Changes in consumer habits to be taken into account

More internet shopping, more meals ordered online, worrying inflation: by 2023, French consumer habits have changed, and this will have an impact on the choice of commercial premises: smaller restaurants and stores that consume less energy should be favored.

Negotiation is always possible

The balance of power between lessors and lessees no longer systematically favors the former. Whether in a city center or a shopping mall, it’s hard to find a tenant who will succeed in keeping your business going. Indeed, business turnover has accelerated since the Covid crisis, which led to the disappearance of many activities. Since then, it seems that the spiral has not really slowed down. Negotiation is therefore possible, provided you have a well-thought-out project backed up by a solid business plan.

Keeping costs down, whatever the cost

Even so, some rents are skyrocketing, while it’s more difficult than ever to anticipate business activity. Similarly, energy prices may not yet have peaked. It is therefore important to remain vigilant, anticipating as far as possible the actual cost of premises, and to place cost optimization at the heart of your research strategy.

What many project managers overlook

It is advisable to anticipate changes in business activity by choosing a location that offers maximum flexibility: extension, expansion, etc. It’s also important to check that the premises are accessible, and to find out about any work planned in the near future that could jeopardize the whole project. Finally, if your premises are located in a shopping center, it’s a good idea to find out about scheduled departures and arrivals. They could involve locomotives, which certainly create a significant share of the flow.


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