Retail business owners know that location can make or break their business. The internet has changed shopping and consumers now are more focused on convenience and the overall experience. As a result, when locating their businesses, owners are looking for creative and cost-effective ways to provide convenience and unique settings, while maximizing their real estate dollars.
Most franchise owners would jump at the chance to have a standard layout on A+ location property. But because those locations are expensive and in high demand, savvy franchise owners are looking at alternative sites, optimizing smaller spaces, partnering with big box stores, and adapting former shopping centers to their needs.
The following are some of the creative real estate approaches that franchise owners are pursuing:
- Small lots, if configured correctly, can offer franchise businesses the location they desire at a much lower price. By working with architects and construction companies to develop efficient layouts and a creative drive-thru, square footage can be optimized for high-volume traffic.
- Leasing agreements with big box stores like Walmart and Target give smaller franchise owners exposure to a steady stream of shoppers while providing consumers with the added convenience of one-stop shopping and a wider variety of goods and services.
- Older shopping centers are being re-imagined and reconfigured into “surban” developments that place retail sites within walking distance from housing. Retail and residential developers are looking for businesses to become part of these planned retail developments and serve as anchor businesses in the community.
- Establishing a business in an underserved area or one in transition also can prove to be a smart marketing move. Many cities are fostering the development of arts districts in urban renewal areas. These underserved communities may yield less traffic initially, but lower traffic can be offset by cheaper rents. Recovering areas often have a hip vibe that attracts millennials and other local trendsetters.
- Suburban office parks are expected to make a comeback as millennials transition to the family-and-children phase of life. They will want to move to suburbs that offer good schools, a variety of housing options and easy access to work.
- Because workers are more mobile than in past generations, companies want office design that is flexible and offers workers as much convenience as possible. Main level office building sites or nearby freestanding locations can provide businesses with a stable clientele of office workers who want convenient services and amenities.
 The list of creative real estate alternatives was compiled from the following sources:
- “20 to Watch: What’s Trending in 2016,” Franchise Times, January 2016. Available at: http://www.franchisetimes.com/January-2016/20-to-Watch-Whats-trending-in-2016/
- “Demographic Strategies for Real Estate,” blog post by Allison Sherman, Urban Land Institute, Oct. 17, 2016. Available at: http://uli.org/centers-initiatives/demographic-strategies-for-real-estate/
- “Current Trends in Franchising,” by Eddy Goldberg, Franchising.com. Available at: http://www.franchising.com/howtofranchiseguide/current_trends_in_franchising.html
 The term “surban” was coined by the Urban Land Institute and cited in,” Demographic Strategies for Real Estate,” a report by the Urban Land Institute, ©2016. Available at: http://uli.org/wp-content/uploads/ULI-Documents/DemographicStrategiesForRealEstate.pdf
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