Opening your first store is exciting, but finding the right location can be daunting. With the old axiom “Location, location, location” running through your mind, you understand location truly does matter. It can make or break your business.
Each market has its own challenges, too, including the price of rent and landlords not yet familiar with the brand.
Recognizing how intimidating the site selection process is to do alone, Winmark® has a team to help new franchisees find the right spot to open a Music Go Round®, Once Upon A Child®, Plato’s Closet®, Play It Again Sports® or Style Encore®. It includes trainers, the brand director, the legal department and Peter First, director of franchise development at Winmark Corporation.
Understanding Site Selection
Winmark seeks to help franchisees open stores in hubs of retail activity, such as malls, shopping centers or groupings of big box retailers. In those areas should be retailers that complement the Winmark brand store the franchisee is opening.
“We like to be where the action is,” Peter said. “We look for stores that are like our brands, where they may be selling the inventory new that we want to get in the store as gently-used. For example, we’re comfortable opening a Play It Again Sports in the area of a Dick’s Sporting Goods. If we can capitalize on that traffic, and educate those customers on our brand the franchisee has a good base of customers to work with.”
However, focusing on complementary brands is only one part of the site selection process. Navigating restrictions on second-hand retail and rent factor into picking the right spot. This is where the Winmark team’s efforts help get the new franchisee’s first store established.
Clout Helps
Occasionally, in some markets, malls or shopping centers will have restrictions on second-hand retailers. Landlords may worry a resale shop will not fit in with the rest of their tenants. But, franchisees and real estate brokers chosen by Winmark usually help hesitant landlords see the benefits of bringing a Music Go Round, Once Upon A Child, Plato’s Closet, Play It Again Sports or Style Encore into the retail mix.
“Sometimes people hear ‘second-hand’ and think ‘thrift store,’ or they think of cardboard boxes sitting out on the sidewalk and it being a detriment to the mall,” Peter said. “But, we provide the franchisee with a knowledgeable broker, sales data, pictures and any type of information the landlord may need to achieve a comfort level with the store. Once they see Winmark has 1,200 stores in the United States and Canada, they come around.”
Peter added, “For the most part, landlords really want us in their shopping centers. We’re a good bet for them because they know we’re going to be a safe, long-term tenant in the center.”
Think Economically
Commercial leases are known for being large, complicated and tedious documents full of legalese that need to be dissected before signing. But, a new franchisee might be too eager to sign it if the lease is for a location they are excited about. Typically, first-time franchisees always want to move quickly. But when it comes to real estate, franchisees need to take emotion out of the equation and exercise patience.
“The lease needs to make sense economically,” Peter said. “We will not let a franchisee sign a lease that does not fit into their business plan. We do not need to be in a center with Starbucks and Panera Bread because typically the rent is too much for our plan. We need to be in the right type of shopping center near areas with more expensive real estate. If we’re across the street from that, we’re in great shape because we can drive traffic to our stores with a rent structure favorable to the franchisee.”
You Are Not Alone
The site selection process can feel grueling, but the most important thing franchisees need to remember is they have support to help guide them through it and move onto a successful opening.
“They don’t have to do this all on their own,” Peter said. “We have a team helping them. They should not expect to go through the site selection process alone.”
For more information about investment opportunities with Winmark Corporation’s resale franchises, click here.
