Magazine Article | September 19, 2006

What's The Best Location For Your Next Franchise?

Source: Innovative Retail Technologies

A café advantageously selects locations and markets products using business intelligence.

Integrated Solutions For Retailers, October 2006

When you’ve succeeded in the business of your dreams, how do you prepare for the exponential growth spawned from the novel idea it was built on? Do your homework, and trudge carefully. Cereality Cereal Bar & Café began with three company-owned prototype locations built in specific areas across the United States. Its current locations range from downtown Chicago to the Arizona State University campus. It offers famous brand and signature cereals, toppings, mix-ins, an assortment of milks, and hot and cold beverages. It’s based on a comforting theme –– “where it’s always Saturday morning™” –– and has experienced tremendous success. And with that success has come the potential for partnerships and franchising.  

When Cereality’s cofounders decided to pursue franchising, they placed Stan Synkoski, COO of Cereality Franchise Corporation, in his position to research business intelligence and demographic mapping tools that could help determine the best locations for expansion. Synkoski also wanted the solution to predict the most effective marketing techniques for its potential customers living near the new franchise sites. After several vendor discussions, he chose geoVue’s iSITE solution. The geoVue iSITE software integrates demographics, business intelligence, and customer data with mapping tools. It enables the addition of specialized software components, such as iPLAN market planning and optimization software, iPREDICT sales forecasting solution, and targetVue, software that optimizes direct mail and marketing campaigns. All components are accessed through marketVue, a Web-based portal that merges third party data with iSITE and iPREDICT.

“The solution helps to optimize a strategy as well as create territorial mapping,” says Synkoski. “It gives us a look into the demographics and psychographics of the entire United States in block groups, then analyzes the likelihood of people living within block groups to be Cereality customers. It predicts the planned development of each block group within a 5- to 10-year period.” The solution defines a territory without zip code restrictions and uses statistics to determine the number of Cereality locations the territory can sustain without reaching a market saturation point. When combined with specific market knowledge, the software plots a path of preferred locations for Cereality and its franchise owners, ensuring the optimum development.

“Currently, this information is used during negotiations with franchise partners when discussing the development of specific geographic locations,” says Synkoski. “After locations are identified [down to the exact street intersection], if real estate is unavailable at that location, a second or third preferred location is pursued. At that point, all other planned site locations in that territory are reshuffled because the expansion plan could change based on the location of the first site.”

Demographics Spawn Mobile Franchise Unit Idea

The geoVue solution can support future marketing campaigns, as well. Once the café locations are determined, the software helps identify nearby customers to target for direct marketing campaigns. “Daytime and nighttime employment information for corporations near preferred site locations are also available through geoVue, so we can use the tool to map ideal locations for landlords of mobile Cereality units,” says Synkoski. “We can determine 24-hour operations for mobile units to offer products where food service is unavailable or limited. At 4 a.m., the mobile unit could arrive at locations such as a back dock for a home improvement center, then move to a park-and-ride, then an office park, and to an education facility around lunchtime. It would then move to a hospital and later to a soccer game or a men’s softball game, and finally to industrial parks with evening workers.”

Cereality is in the process of planning franchise expansions, so the success of the site-planning tool will be measurable after opening cafés in those locations. Pursuing this solution was wise, because Cereality has received more than 8,000 inquiries from interested franchisees.