The Impact of Site Selection: Lessons from Failed Restaurant Franchises

Site selection plays a crucial role in the success of any restaurant franchise. The location of a franchise outlet can significantly impact its ability to attract customers, generate revenue, and maintain profitability. Unfortunately, there have been instances where restaurant brand franchises have failed due to poor site selection. Let's explore three real examples of failed restaurant franchise sites and examine the impact of site selection on their demise.

1. Quiznos:

Quiznos, a popular sandwich chain, experienced significant challenges due to poor site selection. In the mid-2000s, the company aggressively expanded its franchise outlets, often choosing locations near other popular sandwich chains. This strategy led to intense competition and cannibalization of sales, as customers had numerous options in the same area. Additionally, many Quiznos outlets were situated in low-traffic locations, resulting in insufficient footfall and limited customer demand. These site selection mistakes ultimately led to a decline in sales, closures of many franchise locations, and the overall struggle of the brand.

2. TCBY:

TCBY, a frozen yogurt chain, faced challenges due to poor site selection decisions. In the 1990s, the company expanded rapidly, opening numerous franchise locations without thoroughly assessing the market and demographics. Many TCBY outlets were placed in areas with limited foot traffic or in close proximity to established ice cream parlors. This resulted in lower customer demand and an inability to compete effectively. The poor site selection contributed to a decline in sales and the closure of several franchise locations, impacting the overall success of the brand.

3. Bennigan's:

Bennigan's, a casual dining chain, struggled due to flawed site selection strategies. The company opened numerous franchise locations in areas with changing demographics and shifting consumer preferences. Many outlets were placed in suburban or rural locations that experienced a decline in population or where the target market was not well aligned with the brand's offerings. As a result, the customer base dwindled, sales declined, and many Bennigan's franchise locations were forced to close their doors.

Conclusion:

The examples of failed restaurant franchises like Quiznos, TCBY, and Bennigan's highlight the significant impact of site selection on the success or failure of a brand. Poor site selection can lead to intense competition, cannibalization of sales, insufficient foot traffic, and an inability to cater to the target market effectively. It is crucial for restaurant franchises to conduct thorough market research, evaluate demographics, assess competition, and choose locations with high visibility, accessibility, and strong customer demand. By making informed site selection decisions, restaurant franchises can position themselves for long-term success, profitability, and sustainability in a highly competitive industry.

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