By

Kelsey Smith
A retail employee approaches a woman looking at clothing

What Are the 4 Main Types of Store Layouts?

Store layout design has a huge impact on your customers’ happiness and your business’s success across multiple locations. It’s crucial to tailor retail spaces to the number and sort of products you offer, the space available, and the type of shopping experience you want your stores to give shoppers. Four of the most popular retail store designs are the grid layout, the herringbone layout, the loop or racetrack layout, and the free-flow layout, all of which can provide different benefits for your business.

The 4 main types of store layouts

The Grid Layout

The grid layout, also known as the supermarket layout or the straight floor plan, is the most common way retailers lay out their products. The design features a series of parallel aisles. One or more perpendicular aisles intersect the parallel aisles in larger stores, allowing shoppers to switch aisles easily without walking too far. You can organize your products into clear categories and predictable patterns by setting up your stores according to the grid layout.

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Who Uses the Grid Retail Store Design?

Stores that stock many different products tend to opt for the grid layout because its design makes inventory management easier and more efficient. Grid layouts are also a smart choice if you want to use your ample space best. You’ll see grid layouts in drug stores, supermarkets, convenience stores, hardware stores, office supply stores, and electronics stores.

Pros of the Grid Layout:

  • It’s easy to navigate: Customers can easily find what they are looking for because of the intuitive and segmented way products are displayed.
  • Signs can guide customers: Businesses can hang signs above each parallel aisle explaining which products customers can find in the aisle.
  • Merchandising opportunities are plenty: Retailers can set up multiple endcap displays and power walls to grab attention and showcase new, featured, or discounted products.

Pro tip: Add a power wall to your customers’ right at your stores’ entrance. Research suggests most Americans immediately look to their right when they walk into a space.

Cons of the Grid Layout:

  • Flexibility is limited: A grid layout is rigid and fixed, so new ideas for shopper experiences or promotional displays have to fit within its set of parallel lines.
  • It’s the same old, same old: Because of how common it’s become, shoppers may feel less excited, intrigued, or engaged in stores with a grid layout.
  • Grids limit line of sight: Shoppers can only see products to their immediate left and right, so it’s harder for retailers to divert their attention to specific sections.

The Herringbone Layout

The herringbone layout is similar to the grid layout, but it’s optimized for long, narrow spaces. One central aisle runs down the length of the store, with smaller, shorter aisles branching off on either side, like a cartoon drawing of a fish bone. Shoppers typically pay at the end of this long, central aisle — where the head of the fish would be.

Who Uses the Herringbone Retail Store Design?

Clothing retailers and boutiques often use the herringbone layout with mannequins dotted along the central aisle to showcase featured products. Smaller hardware stores, home decor depots, specialty food markets, and antique shops also frequently choose the herringbone layout.

Pros of the Herringbone Layout:

  • It’s stylish: The herringbone setup’s association with high-end boutiques and clothing shops gives the space a feeling of modernity and sophistication.
  • It facilitates discovery: As shoppers walk down the center lane, they can see into each aisle and notice each endcap display, encouraging a diversity of purchases.
  • Organization and variety work together: Like the grid layout, the herringbone style lets retailers display a wide range of products in an ordered, easy-to-maintain way in smaller spaces.

Cons of the Herringbone Layout:

  • Traffic jams can happen: Customers can become clustered around popular sections, leading to a cramped feeling and less opportunity to make sales.
  • Security may need a boost: Stores would benefit from security cameras in the herringbone layout as employees have a limited view of the offshoot aisles from the front.
  • It may cost more to set up: Owners who want their stores laid out in the herringbone style may need to invest more in customizing the space, especially if side aisles are set at an angle.

The Loop or Racetrack Layout

The loop or racetrack layout is an excellent option for store owners who want to control customers’ inventory experience. One oval-shaped aisle loops around a central hub of products, with shoppers “making a lap” of the entire store while they browse. Products line the outer walls of the loop, while you can customize the middle of the circuit according to the journey you want to take your customers on.

Who Uses the Loop or Racetrack Retail Store Design?

Stores that offer a wide range of product types, like department stores and big-box retailers, often use the racetrack layout. The design exposes shoppers to the full spectrum of goods on offer, which is why pop-up shops also use loops to display their goods. This all-in-one shopping experience encourages shoppers to see all your products and buy things they may not have considered in a grid or herringbone layout.

Pros of the Loop or Racetrack Layout:

  • Impulse purchases are more likely: Shoppers traverse your entire inventory as they browse, giving them more opportunities to pop unplanned purchases in their carts.
  • Customers stay in the store longer: Completing a lap takes time, increasing shoppers’ time in your stores and thus the potential for sales.
  • Stores feel spacious: A broad, meandering aisle encircling a cluster of product displays gives the store a spacious and comfortable feel.

Cons of the Loop or Racetrack Layout:

  • Featured products are a challenge: The racetrack layout does not include endcaps or structural focal points, so highlighting specific promotions requires innovation and creativity.
  • Customers have to travel further: Shoppers who’ve visited your stores for one or two specific items will have to walk the length of the track to find them, which some may appreciate less than others.
  • Shoppers may miss central products: Customers could neglect to browse the central product hub if it isn’t cleverly and engagingly laid out.

The Free-Flow Layout

Free-flow store layouts are true to their name — they let you decide exactly how you want your shoppers to navigate the space and experience your products. These highly customizable designs can range from large open spaces peppered with plinths and racks to a combination of more rigid layouts like a herringbone-racetrack hybrid.

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Who Uses the Free-Flow Retail Store Design?

High-end fashion retailers, art galleries, specialty or niche retailers, and other concept stores often appreciate the freedom the free-flow design affords them. Tech showrooms also use this highly customizable design to tailor visitors’ experience around featured products. In general, stores with less merchandise tend to lean toward free-flow designs.

Pros of the Free-Flow Layout:

  • It’s personalized for your customer base: You can lay out your stores to suit your specific clientele, whether they enjoy exploring nooks and crannies or wide open spaces.
  • Featuring products is easy: Free-form layouts are a great backdrop for directing customer attention because you can set up displays however and wherever possible.

Cons of the Free-Flow Layout:

  • Shoppers may need more guidance: If the space is not laid out logically, shoppers may not know where to find what they want.
  • Space could be better optimized: Free-form store layouts need to cleverly position their products so they don’t waste space for the sake of bespoke design.

Brick-and-Mortar Stores Trust FranConnect’s Software

Businesses with stores in multiple locations need software they can rely on to manage their sales, performance, brand consistency, and other crucial data. FranConnect helps grow your brand with innovative technology that optimizes and streamlines multi-location retailers’ most pivotal processes. Contact us to request a demo from our experts or start a conversation about elevating your brand today.

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Tech Consolidation

Beginning with the END in MIND: The Argument for Technology Consolidation

Have you considered that when building your “tech-stack” that it can be very much like owning a house. Initially you tackle several DIY projects such as painting, replacing carpets, or remodeling your kitchen. But over the course of time, you recognize that your needs will go far beyond physical aesthetics. The question becomes “do you keep patching things up with single-point technology solutions, or do you go all in with a platform that’s built with the end in mind?”

It’s Time to Calibrate Your Technology.

Revisiting the DIY theme, just like your home, technology isn’t something that once it’s set up you can forget about it. You need to think about ongoing maintenance. Starting off, we’ve all been there, and have grabbed a few single-point technology solutions to address immediate issues and needs. It is practical like fixing a faucet that drips vs. overhauling your plumbing system. But as you begin scaling your brand, these Band-Aids begin to reveal their limitations. It’s simply untenable trying to manage all your disparate tech tools. You’re likely to experience more headaches as your operations just feel disjointed.

The Benefits of a Platform Solution

As you consider moving to a platform solution, you’ll find that it can provide you with a cohesive solution where everything resides under one roof, where you’ll have the ability to integrate your operationssalestrainingroyalty management and more becomes a unified system that’s designed to scale with you. And you’ll often find that this saves you more dollars through consolidation.

The brilliance of a technology platform is that it delivers true synergy – where a single, streamlined process will create far greater efficiency. The bottom line is that all facets of your technology will work better together. It also improves your users’ experience. It’s just too much asking your users to log into a dozen different tech solutions – all which behave differently.

Is it Time to Consolidate your Technology?

Sooner or later, every multi-location business will face a moment of truth. When you consolidate onto a single platform, you are making the choice to bring order to chaos. This change isn’t about minimizing the number of tech solutions you use, but about using a purpose-built solution that meets your specific challenges, goals and objectives. It is the difference between generic one-size-fits-all tools opposed to getting something that fits you like a glove.

Consider the success of Zoom. It wasn’t just about making phone calls, but envisioning how we connect. Your technology shouldn’t just “work”; it should accelerate moving your brand forward. You can see evidence of this in that 20 FranConnect customers make up the top 50 franchises listed in the 2024 Franchise 500 following their leap to a platform that is specifically designed for franchising success. Additionally, multiple FranConnect non-franchise customers have also been listed as some of the fastest growing brands in their respective industries.

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Only One Way to Coast, and That’s Downhill

In my experience, one of the greatest concerns that brands face is the fear of being left behind. Whether you’re an emerging brand, or a large enterprise system, you have the opportunity to move towards technical maturity now. By moving forward with a platform solution vs. siloed single-point solutions, your brand will position itself for accelerated growth, greater efficiencies, and enhanced competitiveness. Technology is advancing at such a rapid pace, that the strategic integration of technology is much more than an operational advantage, it will be the hallmark of sustainable success.

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How Your Franchise Fee Structures Can Enhance Franchise Performance

A comprehensive study of over 2400 Franchise Disclosure Documents over a two-year period sheds great light on focusing on how varying fee structures including franchise fees, royalty fees, technology fees, and marketing costs can impact your franchise performance and growth.

The Correlation of the Initial Franchise Fee and Higher Revenue Potential

Initial Franchise Fees offers a grant to franchisees to access all your franchise brand assets and intellectual properties, support, marketing and more. The result of the study revealed a very noteworthy correlation between the amount of the IFF and a brand’s revenue. We found that brands that charged franchise fees around $40,000 or more enjoyed an average revenue of $1.5 million per franchise location. This amounts to 2.5X greater than franchisors charging $25,000 or less. In further analysis, those who charged $25k or less saw an average of $583,000 in top-line revenue per location, whereas those who had fees of $40k or more realized an average revenue of $1.5 million per location. Clearly this signals that those seeking franchisees could have a greater willingness to invest more in exchange for higher revenue potential. Franchisors should reevaluate and consider increasing their initial franchise fees to strengthen brand value and to assist in further growth.

Royalty Fees Equate to Stronger Support

Almost every Franchisee is required to pay a royalty fee which represents a recurring financial commitment towards the continued use of the franchise brand. The small percentage of franchisors that do not charge royalty fees are most often a “product distribution model” in which the franchisee is paying more to the franchisor for access to products that are proprietary to their system. However, the vast majority (94%) of franchisors are charging royalty fees, primarily as a percentage of monthly revenues. This approach is employed by 92% of franchisors. The average royalty fee currently stands at 6%, and our study reflects a consistent approach across a variety of vertical industries. We found that 80% of franchise brands are charging royalties within a median value of 2%. This is an indication that there is great consistency across franchises that potentially balances the ongoing support provided by the franchisor to help achieve operational success.

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Marketing Expenditures at the National and Local Level

There are very few fees that are more critical than the amount and way that marketing expenditures are utilized – after all, the purpose of business is in the making and keeping of customers. We find that the most successful franchise systems are those that have achieved a thoughtful balance between their national advertising and local marketing efforts. Our study found that 72% of franchise organizations are levying a national advertising fee, predominantly as a percentage of revenues (89%). In terms of local marketing expenditure, a majority (55%) will require their franchisees to spend on local marketing, with 79% of these that require a specified percentage of monthly revenues. The average local marketing spends required by franchisors currently stands at 2% of monthly revenues. This data reflects the necessity for franchisors to ensure that adequate marketing spend, nationally and locally so that they may remain competitive and support franchisee success.

Technology Fees are Now of Critical Importance

Many of today’s franchise leaders extoll the fact that their products and services are becoming more and more of an ante into the game whereas, technology plays a critical role in obtaining operational efficiency along with a competitive edge across your system. According to our findings, 61.9% of franchisors now charge technology fees, with the majority doing so in the form of a flat monthly rate. Not only is this required investment in technology becoming the norm, it is greatly valued by franchisees. 50% of franchisees acknowledge the significant value that is derived from technology provided by the franchisor. What is incredibly important to note is that franchisors that impose technology fees are likely to grow 36% faster over a two-year period than those that do not. This key takeaway accentuates the importance of strategic tech investments for enhancing a true competitive advantage and support for your franchisee’s success.

Enhancing Franchise Operations with FranConnect’s Royalty Manager and Flywire Collaboration

Add in FranConnect’s Royalty Manager solution, and you have a cutting-edge tool designed to revolutionize the way franchisors manage and collect royalties. And with its integration with Flywire, you’ll have a significant advancement in streamlining the collection of fees, both domestically and internationally, for franchisors. This partnership is further bolstered by the innovative Invoice to Pay and Sign to Pay programs, in which FranConnect utilizes Flywire’s global payment platform to facilitate the financial transactions that are pivotal to franchising operations.

This synergy between FranConnect, its Royalty Manager solution, and Flywire represents a transformative approach to addressing the complexities of fee collection and operational management in franchising. With these powerful tools, franchisors are equipped to navigate the competitive landscape more effectively, enhancing brand value, improving franchisee success, and driving overall franchise system growth in an increasingly dynamic market environment.

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