September 03 2014 – Robert Fiumara
For chain restaurateurs, there are many considerations to take into account when opening a new franchise location. For one, the dining marketplace is stagnant in comparison to past decades, and a chain’s growth is tied directly to an operator’s ability to gain a growing share of customer visits, an increasing repeat customer pool, and his ability to build greater chain loyalty among prospective guests. As we all know, having a loyal customer base is the only way anyone can survive in the current market climate. When you look at the success of any given chain, the thing that will always pop out is that they have strong loyalty programs that reward repeat business.
Many Things Influence Repeat Business
Drivers of repeat business include marketing drives and reward programs. Many consumers report that they are more likely to eat at a given restaurant when they are given a free meal every so often to incentivize returning to a given chain. Many customers, too, are creatures of habit. NPD data indicates that 4 out of 10 foodservice customers openly acknowledge that there is a particular restaurant that they prioritize whenever they want to get something to eat or drink. Of those customers, few identified brand loyalty as a driver of their repeat business. Instead, more often than not, those customers reported that where they frequently dine was mostly due to “needs of the moment”.
What this means is that, amongst all of the factors that influence a customer to return, chief among them is convenience of location. Convenience doesn’t create loyalty, but it definitely drives repeat business which gives you repeated opportunity to cultivate loyalty in a given guest or customer. It was only when convenience was taken out of the option pool that things like good food, good and friendly service, and reasonable pricing even factored as drivers of returning business. That’s not to say that those things don’t factor in, far from it, it just seems that the relation they share with the customer experience and the driving of repeat business is a more complex one, and that chief among all drivers of return business is good location.
But the Old Adage is True, Location is Everything
So, when opening a new location or franchise, you have to consider where it is more than almost anything else you offer. Chains alongside major byways and roads, or built along highly centralized locations almost always fair better than those that are in more remote or inaccessible locations. Likewise, having an entrance and parking lot that is easy to access will do more for your business than almost anything else.