- Franchise Research – Establishing Market Potential/
Ask yourself a series of questions along the following lines, and persevere until you have formulated realistic answers:
Note: The number of advertisements you see for the product or service now compared to a couple of years ago may give you a good indication of the general state of the market.
Notes: In order to make money for the franchisee and franchisor, the product should have tangible advantages over those offered by its competitors. It may be difficult to maintain premium prices if the product or service could be easily copied by others.
Notes: Do competitors have any technical or price advantages? As a member of the network you are investigating, would you be able to improve on the service they offer? What is their level of advertising? If there are no competitors, ask yourself why this is the case. Perhaps the market potential is too small?
Notes: Does the local market have the same characteristics as the market in general? Is the product particularly suitable for your area? How dependent is success of the business on particular lifestyles or levels of income? Consider market segmentation!