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Site Selection

Looking for the best location for your new business interview with Sal Vance of Salts of the Earth.

As you move into your franchise journey, many systems expect you to contribute to the site selection decision, as it will become one of the most important decisions determining the future of your business. By Peter Buckingham CFE CMC

W

hilst it is probably accepted you are not an expert in the field, this does serve a few very good purposes, both for yourself and the Franchisor. I am fortunate today to interview Sal Vance, the Franchise Recruitment and Development Manager for 2016 FCA Next Gen award winning

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business, Salts of the Earth. Sal has much experience with different major franchise systems over the years. Salts of the Earth is all about helping people with skin or breathing issues; using non-invasory techniques to improve your well-being. Salt therapy is a natural therapy that has

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Site Selection been practiced since the 18th century. It involves inhaling dry salt, which cleanses both the airways and the skin to relieve congestion, inflammation and skin irritations. Sal has a specific type of site she looks for and is a great believer that everything needs to be right to proceed, and not to take a “nearly good enough site”, as you will pay for it in the long run. 1. What do you look for in the demographics of an area? Our initial position is we want a franchise partner who is community based, and part of the local area they are wishing to open a franchise in. We believe we appeal to a wide community, and look to a middle sociodemographic profile. We look for local generators that will bring people near to us, however we are definitely a destination business, not an impulse business. 2. Can you describe the perfect site for Salts of the Earth? We seek a retail shell of between 110 and 160sq m. We will do the internal design; so prefer minimum internal walls that we have to work around. We look for very good parking convenience, as we often have elderly and disabled customers. We also look for good street presence (or visibility), and seek the quieter sections of a shopping strip as we do not need to pay the

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top rents in the impulse section of most shopping strips, where the fast foods, newsagents and supermarkets are. 3. Why do you ask potential franchisee to assist in the site decisions? Our policy is to have the franchise partner have some ownership of the site decision. We have written site selection criteria, and want to engage all franchise partners in the process. We ask them to locate options in their designated area, and work with them to select the best. We retain the right of final approval, and if nothing meets our strict criteria, then we await a better option. 4. What do you ask the potential franchisee to do in assisting with the site decisions? Our process starts with finding options, and then the franchise partner doing much of the leg work or due diligence about the opportunities. I ask them to sit in a local coffee shop and look at issues (and measure) passing pedestrian traffic, look at the carpark and see how long cars are there – whether they are local visits, or left for the day whilst going to work. We also look for the ant trails, where the people walk from the main generators (supermarkets etc) to carparks and other popular points in the strip.

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Site Selection

I always will spend time with the franchise partner and visit the best options that they have come up with, and discuss the pros and cons, making sure they understand our views and priorities. We see this as part of an education process into franchising, and even show them how to find opportunities with www. realcommercial.com.au, and to contact and have initial meetings with local real estate agents. Many franchise partners have no experience with commercial leasing, so we need to educate them on what can be expected in terms of rent free periods, contributions to fit out and many other things. By being part of the negotiation, we have also knocked back a site recently purely on the basis that the Lessor is too uncooperative, and if too painful in the negotiations, then they will be difficult to work with in the future. 5. What are the benefits of having the Franchisee so involved in your process? This really comes down to ownership of the decision, and I document all stages of this, so there can be no dispute that they undertook reasonable due diligence if any dispute over site selection arises in the future. 6. Once you have agreed on the site, who arranges the fitout, and what is the approximate cost? Salts of the Earth arrange the design, and arrange quotes for the job to some nominated fitout contractors, who we know will do a quick and efficient job (both in time and cost). We are not interested in the franchise partner doing the job themselves or using an unknown fit out company. We insist on all the correct permits being issued, and explain that this gives both them and us coverage that the fitout meets all the required regulations. 7. Do you have a plan on how your network should look say 5 years out? We are looking at a piece of work with a 3rd party company to prioritise our Strategic Network Planning. This will assist us especially as we grow into other States where we are not as FRANCHISE BUYER • Vol.3 #4

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familiar with the demographics and growth of these major cities. It will also give us and future franchise partners more confidence in making the right decisions as to where to locate future stores. 8. You mentioned you look at the Franchisees involvement at this early stage as part of the approval process to be granted a franchise. Can you expand on this? We start off by granting a franchise before we move to the site selection stage. We find that if a potential franchise partner struggles to perform all the early tasks in setting up the business in a timely manner, then they will probably become a liability rather than an asset in the future. If deadlines are not met, and commitments to provide information and undertake agreed tasks missed, then that goes very poorly in the final decision as to whether we want to grant them a franchise and become a business partner with them. Franchising is all about the system! If they cannot meet 100% our expectations in following the system when applying to join us, then they are probably not suited to our opportunity. Summary Great to hear from a stalwart in the network development area for a brand that is really on the go. The detail Sal goes into analysing a new site – and the idea that if it is not 100% then she will probably walk away – shows you the responsibility Franchisors like Salts of the Earth place in making these very critical decisions. Peter Buckingham is the Managing Director of Spectrum Analysis Australia Pty Ltd, a Geodemographic and statistical consultancy. Peter is both a Certified Management Consultant (CMC) and a Certified Franchise Executive (CFE). To contact Peter email peterb@spectrumanalysis.com.au or visit www.spectrumanalysis.com.au www.FranchiseBuyer.com.au


Peter Buckingham - Site Selection Feature in Franchise Buyer Dec 2016