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National franchises are exactly what you don't want. Yes, there is tax revenue generated for the city. However, having a Starbucks instead of a local coffee shop, while pretty and mainstream, handicaps the local economy. Money that could be cycling back through the local economy doesn't. At best, the investor who owns the franchise--and it is an investor, with many franchisors requiring north of $250k or $500k of on-hand liquidity from the franchisee--lives in the region and spends dollars in the city. But, often, even the investor doesn't live locally, so all the profit goes out of the region.
I understand your point but in this situation I have to disagree simply because national franchises would still be better than empty buildings. Besides all the new local jobs that would be created (including the construction work /finish out) there would residual benefit for delivers via trucking and other sorts of stuff related to ongoing operations such regional visits from regional or upper management which would mean hotel stays, other local spending etc...
Plus national franchises bring name /product recognition to the area which help drive business. While I agree most of the actual profit would go out of the area there would still be employees needed and their pay checks and their spending would stay local. Tax revenue would stay local and state level, and other businesses might open or locate near the traffic of a national brand so there are other residual benefits.
Lets say just 10 national franchises opened and each one required 10 employees then thats 100 new jobs alone. Or is it better just to keep the empty store fronts?
I understand your point but in this situation I have to disagree simply because national franchises would still be better than empty buildings. Besides all the new local jobs that would be created (including the construction work /finish out) there would residual benefit for delivers via trucking and other sorts of stuff related to ongoing operations such regional visits from regional or upper management which would mean hotel stays, other local spending etc...
Assuming zoning doesn't require a sea of parking and that no buildings are razed to create said parking.
If the only choice was between a national franchise and an empty storefront, I'd choose the franchise. At least it's jobs and people coming around.
But that's a false choice. If the choice is between a local business and a franchise, the local business is going to be better. The franchise may be more palatable to an investor seeing an opportunity and an easy way to use it, but it represents a net outflow of dollars from a city. That's right, I said it, a national franchise sends out more money than it returns to the local economy.
With regard to economic impact, the study finds that, for every $1,000,000 in sales, independent retail stores generate $450,000 in local economic activity, compared to just $170,000 for chains. Among restaurants, the figures are $650,000 for independents and $300,000 for chains. Across both sectors, this translates into about 2.6 times as many local jobs created when spending is directed to independent businesses instead of chains. The study concludes that a shift of just 10 percent of the market from chains to independents would produce 31,000 jobs paying $940 million in annual wages to BC workers.
Assuming zoning doesn't require a sea of parking and that no buildings are razed to create said parking.
If the only choice was between a national franchise and an empty storefront, I'd choose the franchise. At least it's jobs and people coming around.
But that's a false choice. If the choice is between a local business and a franchise, the local business is going to be better. The franchise may be more palatable to an investor seeing an opportunity and an easy way to use it, but it represents a net outflow of dollars from a city. That's right, I said it, a national franchise sends out more money than it returns to the local economy.
As I said in this particular case a Nation Franchise Company is the only / last option because currently there are so many empty store fronts. The locals are not opening locale business for whatever reason it may be which I suspect lack of funding. Local small banks will not loan money to small individual businesses because the risk is too high so its hard for locals to get the needed financial funding.
As for parking I would assume that along Main Street the zoning requirement for parking is waved to a certain extent due to the fact many of the buildings are historic or older buildings grandfathered in to the Main Street Business Zone. Employee parking is usually located behind the business allowing street parking for customers.
Again in this situation even if the majority of the money goes out of town what little that does stay is better than none, as well as the local jobs and the fact in-fill
As I said in this particular case a Nation Franchise Company is the only / last option because currently there are so many empty store fronts. The locals are not opening locale business for whatever reason it may be which I suspect lack of funding. Local small banks will not loan money to small individual businesses because the risk is too high so its hard for locals to get the needed financial funding.
As for parking I would assume that along Main Street the zoning requirement for parking is waved to a certain extent due to the fact many of the buildings are historic or older buildings grandfathered in to the Main Street Business Zone. Employee parking is usually located behind the business allowing street parking for customers.
Again in this situation even if the majority of the money goes out of town what little that does stay is better than none, as well as the local jobs and the fact in-fill
If someone has the necessary (and contractually required) liquidity to get a national franchise, they have the liquidity to start a local business. The seasoned franchisee is going to want the simplicity of a franchise, but in the end it comes down to incentives. They're businesspeople; make them a good deal and their wallets will follow.
As to your last paragraph, if the options are a franchise or nothing, I, again, suggest the franchise. As I said, it's foot traffic where there wasn't before. But, and this cannot be stressed enough, if the investor isn't local, a franchise is a net outflow of wealth from the city; in the long run, the franchise drains the city of wealth as more of it flows out of the city limits to the investor and the franchisor than inward to the manager, employees, and city coffer.
By all means, use a Peets, Starbucks, In 'n Out or whatever as the initial anchor, but fight dearly to fill the rest of the shops with local businesses. Keep profits local.
National franchises are exactly what you don't want. Yes, there is tax revenue generated for the city. However, having a Starbucks instead of a local coffee shop, while pretty and mainstream, handicaps the local economy. Money that could be cycling back through the local economy doesn't. At best, the investor who owns the franchise--and it is an investor, with many franchisors requiring north of $250k or $500k of on-hand liquidity from the franchisee--lives in the region and spends dollars in the city. But, often, even the investor doesn't live locally, so all the profit goes out of the region.
OK, I'm no economist, so you've got me there. However, it does seem to this semi-intelligent nurse that aside from whatever profits are given to Starbuck's itself, the money does cycle back into the local economy. Locals get paid. (I have a niece who works at a Starbuck's.) The owner lives locally. Etc. Local coffee shops seem to come and go.
OK, I'm no economist, so you've got me there. However, it does seem to this semi-intelligent nurse that aside from whatever profits are given to Starbuck's itself, the money does cycle back into the local economy. Locals get paid. (I have a niece who works at a Starbuck's.) The owner lives locally. Etc. Local coffee shops seem to come and go.
Honestly, I'm not familiar with the contract structure of Starbucks. In the case of other fast food franchises, the franchisee (the "owner" of that particular location) tends to be an investor with multiple locations and may or may not be local; the liquidity requirements and low margins of being a franchisee can make individual ownership inhospitable. If they are not local, then the only money staying local is wages paid out to the store manager and the other employees, plus any wages being paid to food distribution delivery drivers who happen to live locally. Compared to net revenue, that is peanuts. Speaking generally, when the franchisee isn't a local resident, more money flows outward--first and foremost to the franchisor, then the franchisee, the food distribution service (ex. Sysco), etc.--than flows to the employees and back in to the community.
I'm not denying that money flows in to the local economy, but if you're a local government, you want at least half of every dollar spent by consumers to cycle back in to the economy. But with many franchises, 1/3 or less makes it back, overwhelming any knock-on multiplier effects.
One issue with comparing money from local independent businesses and chains is they're often different types of businesses or the chains are lower-end (less of a profit margin).
Right.
I wonder what it is like in Sturgis, SD when the bikers are not there?
What is it like in Moab, Utah, after Easter Jeep Week, or during the winter?
What is it like in ANY small town near a tourist attraction, after the tourist season?
You want "culture"? Try the Black Hills Passion Play in Spearfish, South Dakota.
Oh, wait, you can't; it closed in 2008 after a 70 year run.
Somebody bought the amphitheater in 2012, but I haven't heard a thing about it since.
I wonder how Spearfish is holding up without those tourists...
Moab after Easter Jeep week, as well as before it, attracts plenty of mountain bikers and hikers. Pretty much the case through spring and fall, and absolutely nuts during spreak break weeks, which are more than just Easter week.
I stayed there once in the dead of winter. 9 degrees F at night in my tent at Canyonlands got to be too cold for me. I caved and stayed in a motel my last night. Motel rooms were cheap because they built for the crazy peak times of spring and fall. But even then, tourists were around, just fewer.
Oddly, summers are hardly dead there despite the heat. European tourists go there to experience one of the things that makes a desert a desert--parching, whitehot, dry heat. Kudos to them!
Little town of Fruita, CO, a short drive from Moab, made itself into a mountain biking mecca. Literally. A small group of mountain bikers built singletrack (something that Moab has few of), created a rough but useable trail booklet, organized an annual mtb fest, and it took off. Prior to that, I had biked there on my own, exploring, and seeing the change from a little-known gem to an internationally known hub was amazing.
I used to live in Golden, CO, and during off seasons it still bustled, thanks to being a real town with both local employment and a highly-regarded college. If tourism had been its sole attraction, it would have been a lot less resilient.
Tourism season where I live now (Olympic Peninsula) is much more pronounced, i.e., often obnoxious, but even here there are tourists around in the rainy, dark season, and lots to do for both tourists and residents year 'round. The cities spent big bucks tarting up the waterfronts of both Port Angeles and Port Townsend (which still ticks off some locals, based on comments they write to the newspaper). While those changes do look to me like changes for the better, the fact remains that the real draws are natural, not manmade. Namely, mountains and beaches and forests with trails. Those create the attraction that gets people into the towns and cities.
One issue with comparing money from local independent businesses and chains is they're often different types of businesses or the chains are lower-end (less of a profit margin).
The bigger issue is getting the requisite information to do apples-to-apples comparisons. It's easier to get information from independent businesses, where a researcher can talk to the owner. It's near-on impossible to get information from chains, so data has to be inferred and gleaned from publicly available documents.
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