Adopting location intelligence in your emerging restaurant franchise
At Kalibrate, we work with some of the world’s most successful franchises in the restaurant space. But all of them started small. One of our clients had three sites when they first started working with us. Today, they have over 400.
In the recent past, the data handling and analytical capabilities to implement an effective location intelligence solution would be prohibitively expensive for smaller chains without substantial investment. Today, these solutions are accessible to most – and the benefits are significant.
Managing restaurant sales process
Opening new units is the priority when you’re growing. A location intelligence tool gives franchisees the confidence that their partners have invested in a tool to help them pick better locations. After all, it won’t be just your sales function giving a forecast; you’ll have independent data to back it up. Partnering with a location intelligence partner with a demonstrable track record of helping restaurant franchises scale adds further credibility.
Using mobility data to provide customer insights can give you visibility on the types of people visiting your sites – where they live and work, and when they visit. When engaging potential franchisees, the ability to deliver this insight builds trust that your opportunity is real; you’ve done the groundwork, and you know who your valuable customers are, and how to reach them.
With a robust customer profile in place, you can also demonstrate how franchisees decrease the ramp-up time by selecting locations most likely to reach profitability quickly. Ultimately, the more effectively you deploy location intelligence capabilities within your concept, the easier you’ll be able to answer any questions franchisees ask – from boots-on-the-ground marketing insights to how to lay out the rest of the market most efficiently.
Supportable store and market optimization
Conducting supportable store analysis helps you understand the optimal number of units a market can support – and when it’s time to move to the next market opportunity. By setting minimum performance thresholds, you ensure your franchisees’ sites remain profitable while simultaneously maximizing unit openings.
Franchises that have reached the limit within a particular market may embark on market optimization exercises. Again, mobility data plays a key role in creating a real-time picture of trade areas – i.e., where sites are drawing customers from to make decisions about how best to serve markets using optimum locations, restaurant formats, and footprints.
Understanding restaurant cannibalization
As you grow, existing franchisees often want to understand how new openings will impact their profitability – and current franchises may be resistant to adding to their portfolio if they believe they will impact existing sites’ profitability. Managing different stakeholders in your restaurant franchise can be challenging as you scale, so leaning on the insight that informs and verifies sustainable unit growth is invaluable. This balances your growth, so you can continue your openings velocity and achieve targets.
By leveraging mobility data and visualizing within a location intelligence platform, you can clearly demonstrate where your current sites are drawing customers from and quantify the impact – or lack of – on existing franchises. This capability is vital when you start growing at pace, both from a sustainable unit growth and franchisee management perspective.
Truly understanding cannibalization helps you and your franchisees meet your performance and growth targets, maintaining a positive brand perception of well-location, busy restaurants.
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