What do McDonalds, Planet Fitness, and Jiffy Lube all have in common?

If your answer was “They are all franchises”, then you would be correct! Even further though, they are all brands that we would categorize as being in the Retail sector. 

For those who haven’t read The Perfect Franchise book, we classify all franchise brands as being a part of one of three sectors: Home Services, Business Services and Retail. We’ll dive into the other sectors in later articles but for today, we’re focusing on Retail. 

The retail sector is going to be the most recognizable sector of the three because this sector comprises brands that have consumer-facing, brick-and-mortar locations. These are businesses that you see in strip centers, malls, adjacent to your neighborhood grocery store and in some cases even stand-alone buildings in high traffic areas. 

Let’s look a little deeper into some of the key characteristics of the retail sector:

  • Built for manager-run operations. If you are wanting a franchise that will allow you to keep your existing job and transition into a more active role in the business over time, this is the sector to focus on.
  • Location, location, location! We’ve all heard this phrase before and it’s an important one for this sector. Brands will generally have site selection parameters in place to ensure the business is going into the right spot. Some of the important considerations are: surrounding area demographics, ingress/ egress routes, daily vehicle counts passing by, anchor tenants/ surrounding businesses, and foot-traffic. 
  • Scalable through multi-unit operations. Retail sector brands are strong multi-unit development plays. Generally, the brand will provide discounted franchise fees for multiple units as well as a development schedule to roll out openings over time rather than all at once. The ability to share resources, especially human capital, among multiple locations can increase efficiency and allow you to hire and retain better employees. 
  • Initial investments generally start around $300k and go up from there. Since these are defined by having consumer-facing, brick-and-mortar locations, there are going to be costs associated with getting the right location and performing leasehold improvements. This will bring your initial investment up compared to a service sector brand. 
  • Plan for 9-12 months from time of signing a franchise agreement to opening the doors of your location. This timeframe can vary by brand but with real estate involved you’ll want to plan for a longer period of time to launch. Site selection (finding the right location), lease negotiations, and buildout/ leasehold improvements all have to be completed before you can hold your grand opening. The hardest part of this process for most people is playing the waiting game! 

All in all, the retail sector can be a fantastic sector for potential franchisees to get involved in and spans many unique industries such as: health/ wellness, automotive, food, children’s education, and pets to name a few. This is a sector that not only provides scalable models but also brands that are instantly recognizable in your community. To learn more about this sector and see what options are available for you, reach out to schedule a time to speak with one of our experienced franchise consultants at The Perfect Franchise.