5 reasons San Antonio is a Top Market for Franchise Growth

Whether it’s food, medical, service, automotive or retail-oriented, there is little doubt that franchisedevelopment in San Antonio is off and running.

Franchises in and of themselves are built to grow and expand, but franchisees and parent companiesalike are taking note of San Antonio’s population growth, new neighborhood developments, healthy jobmarket and rising income levels and they see a perfect storm for their own growth plans.

After talking with a number of franchisees, development heads and even a franchise consultant, I’vecome up with some of the main reasons San Antonio is a top spot for brand development and growth:

1. Real estate is (relatively) inexpensive

Compared to markets such as New York, San Francisco, Denver and Austin, commercial space in SanAntonio is at or near rock-bottom compared to other cities some franchise operate in. Take Lenny’sSubs, for example. The brand is used to paying between $40 to $50 per square foot for its sites, but inSan Antonio, you’d be hard-pressed to find much beyond the $30-per-square-foot level. That lowers theentry barrier for newcomer franchisees and allows them to accelerate their growth plans in the city. Onthe same note, San Antonio’s lower prices also have given some names the competitive edge. PolloTropical has been known to pay more than any other retailer in the city for desirable pad sites. Why?The company’s CEO Tim Taft told me it’s because those high-traffic sites are crucial to their brand-building strategy and, since it has the capital to pay for it, why not?

2. Main industries here are diverse

San Antonio is unique in that it doesn’t have just one main industry. It has about four. With military,finance, medical and cybersecurity, the city has a solid base of high-paying jobs, and with that comes

highly paid customers. That level of disposable income is extremely attractive to any retailer, butespecially for franchises that are looking for a place to plant a long-term investment. Merri Cronk, theCentral Texas principal of FranNet — a franchise consulting firm — said that the industry diversity lendsitself to a strong economy. Cronk called San Antonio “a hybrid city where people can start businessesand put roots down.”

3. Plenty of room to grow

With an increasing population comes an increasing number of new neighborhoods and regions. SanAntonio franchise hopefuls have plenty of options in terms of location to establish themselves in, eachproviding their own unique customer base. There is the student population in and around UTSA, themedical community in the Medical Center area or the families in Stone Oak. Cronk said that San Antoniois always going to see food franchises grow as neighborhoods grow, and with the city expanding in everydirection, there is going to be a whole lot of growth.

4. Dependable way to build a business

San Antonio’s slow-but-steady economics makes it the perfect place for a franchisee to build up abusiness of its own with a brand people are already familiar with. Bob Ritter, Lenny’s vice president offranchise and market development, said that there are very few bumps with franchise ownership, andthat when you buy into a franchise model, a franchisee is essentially buying a proven business. Thatconcept is true anywhere, but given San Antonio’s current market conditions, the notion is solidified.

5. Market economics are “perfect” for expansions

Some markets are inexpensive to get started in but have a small customer base. Others are filled withhigh-income professionals but the cost for space is way too high. San Antonio has the perfectcombination: It has available, inexpensive space and a growing customer base with rising income levels.Whether its a new brand or an established name, franchises and franchisees alike are investing moneyand are ready to expand alongside the city’s own accelerating growth.