Franchise Real Estate Trends that You've Got to Check Out

(Franchise Buy) - By SystemUser - BlogMigration. Updated Nov 13, 2013

I recently read an article in Franchise Times (Eight trends top the years list of big stories in real estate by Beth Mattson-Teig) about real estate trends among franchises around the world. Some very interesting trends (including oddball locations such as a Subway store on a German riverboat) make the list and give franchisees a glimpse into the vast possibilities of location, location, location.The list is as follows:1. Top TownsThis one isn't very surprising. Cities on the short list for expansion are those who are ahead of the curve in economic recovery. Interestingly, the article reports that retailers are now looking into second-tier markets for development now more than ever, as opposed to large, central cities. Growing cities provide opportunities at lower costs.2. Think GlobalFranchisors are accelerating international growth plans, expanding to emerging markets in Asia and South America. The expansion doesnt stop there however, as other major franchises are targeting expansion in Russia and sub-Saharan Africa.3. Tenants RuleDue to an excess of vacant space in many cities across the US, many landlords are offering rent discounts and concessions, such as more tenant improvement dollar. While the retail sector is improving, the vacancy rate at neighborhood and community shopping centers is just 60 basis points below the sectors all time high of 11.1% in 2011, according to Reis Inc.4. Tech TalkTV screens are no longer exclusive to sports bars. They are now popping up in a wide array of franchises. Apparently, people report they like the white noise of televisions while they are in a restaurant or bar. Whatever is on television provides a talking point for people socializing with one another as well.5. Smaller FootprintsThis is a big one. Restaurants and retail groups are now expanding with smaller store footprints. There is currently a drive in America to return to local, mom-and-pop stores. By franchises switching to spaces with smaller square footage, they provide more of a small store feel and less big box.6. Against the GrainNon-traditional locations such as college campuses and baseball stadiums are by no means a new trend, but franchises lately have also been finding great success in other high-traffic areas such as inside of convenience stores, as well as at amusement parks, train stations, and hospitals.7. Back in ActionWhile new construction projects were far and few in-between during the recession, the one exception has been outlet malls, which have an estimated 20 million square feet of new projects either proposed or underway, according to Marcus & Millichap.8. Designs To GoLastly, there is a growing demand in our country for home meal replacement. Busy families are driving more business to restaurants that offer quick take-out delivery. Because of this, more focus is being paid to designing for the to go service, with marked parking spots for people using the service, and dedicated windows for such orders. Designing buildings with separate entrance and pick-up counters from the rest of the restaurant is on the rise.