How Can You Determine If A Franchise Will Work in Your Area?
How Can You Determine If A Franchise Will Work in Your Area?
Before New York Broadway producers bring a production on the road, they’ll test it in a few smaller cities to see if the humor or pathos translates well to different audiences. After all, not every town sees life in the same way as New Yorkers. A similar comparison could be made with franchised businesses. A concept that does extremely well in one location may not have the same appeal in a different part of the country.
Let’s imagine you live in Raleigh. While visiting friends in Scottsdale you discover they are franchisees of a business that provides landscaping to residential clients. They are doing very well and love the business. As soon as you get home, you research the concept and decide it is just what you’ve been looking for. But will this business do well in your area? The answer will depend on many factors.
Your first step should be to compare the population of the franchisor’s successful businesses to the population in your area. You should be able to find population data by using the internet. Here’s what you should be looking for:
Total Population – Many businesses need a minimum population in a territory to provide enough potential customers to make the business successful. If the landscaping business needs several hundred thousand residents in a territory and you live in a rural area of a few thousand, this concept isn’t a good fit for you.
Population Density – If the business requires a retail location, how far will customers drive to get to you? Each type of business will draw customers within a finite radius. If you have a coffee shop, your customers will live or work within a mile or two of your store. If your franchise offers something needed infrequently – such as furniture or legal services, you might draw customers from 5, 10 or more miles. Once you determine your actual radius for drawing customers, examine the data within your draw area to see if there are sufficient people to keep your business thriving.
Demographic Characteristics of the Populations – Will your franchise concept appeal to a broad demographic of the population of your territory or does it have specific appeal? An authentic Greek deli might draw a variety of people or it might just draw customers from a Greek background. If possible, find existing franchises in locations with a population make up similar to your territory to see if the concept does well. If the potential business serves teens or tots or seniors, does the territory in which you want to open have sufficient numbers of the appropriate customers? Don’t assume you know the answer – do your research!
Income Levels – Equally important to age and ethnic characteristics is the income levels of your population. While fast food and quick serve family restaurants may do well in a variety of locations, other concepts need to be located in areas where the income levels are sufficient to the product or service you will provide. If you will be offering something most would consider a luxury item, such as laser hair removal or spa treatments, make sure the average income is high enough to support your business.
Purchasing a franchise is not a guarantee of success. You will have the accumulated experience of those who have gone before you and you will have the training and support from the franchisor who has a vested interest in seeing you succeed. But to misquote a line used in many movies, failure is an option.
To maximize your change of success and to diminish failure as an option, it is very important that you thoroughly research the franchise opportunity itself and that you also thoroughly understand the demographic makeup of the territory in which you wish to place the franchised business. Not every concept will do well in every location. Sometimes success of a concept is a matter of good timing, whether because of current trends or the economy or even changes in the population density or makeup.
Which brings us back to the question of whether the residential landscaping franchise that does so well in Phoenix, Arizona will do equally well in Raleigh, North Carolina. Professional landscaping could be seen as a luxury item so you would want to be sure the average income of your population would support this type of purchase. You would also want to look for data on the number and value of the single family homes in your area. Ask the franchisor for names of franchisees who work in areas with a similar population to your proposed territory and find out how successful these franchises are with the concept.
In any business, gut instinct and experience will go a long way towards helping you make important decisions. But when you are risking your own capital on the purchase of a franchise business, be sure that you back up your instincts with research and hard data.
If you are willing to work hard, becoming a franchise owner could open an exciting chapter in your life. Just be sure you eliminate as much of the risk as possible by getting all of your questions answered before you sign on the dotted line.
How Can You Determine If A Franchise Will Work in Your Area - To learn more about this author, visit Kimberly Ellis's Website.
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How Can You Determine If A Franchise Will Work in Your Area?
Before New York Broadway producers bring a production on the road, they’ll test it in a few smaller cities to see if the humor or pathos translates well to different audiences. After all, not every town sees life in the same way as New Yorkers. A similar comparison could be made with franchised businesses. A concept that does extremely well in one location may not have the same appeal in a different part of the country.
Let’s imagine you live in Raleigh. While visiting friends in Scottsdale you discover they are franchisees of a business that provides landscaping to residential clients. They are doing very well and love the business. As soon as you get home, you research the concept and decide it is just what you’ve been looking for. But will this business do well in your area? The answer will depend on many factors.
Your first step should be to compare the population of the franchisor’s successful businesses to the population in your area. You should be able to find population data by using the internet. Here’s what you should be looking for:
Total Population – Many businesses need a minimum population in a territory to provide enough potential customers to make the business successful. If the landscaping business needs several hundred thousand residents in a territory and you live in a rural area of a few thousand, this concept isn’t a good fit for you.
Population Density – If the business requires a retail location, how far will customers drive to get to you? Each type of business will draw customers within a finite radius. If you have a coffee shop, your customers will live or work within a mile or two of your store. If your franchise offers something needed infrequently – such as furniture or legal services, you might draw customers from 5, 10 or more miles. Once you determine your actual radius for drawing customers, examine the data within your draw area to see if there are sufficient people to keep your business thriving.
Demographic Characteristics of the Populations – Will your franchise concept appeal to a broad demographic of the population of your territory or does it have specific appeal? An authentic Greek deli might draw a variety of people or it might just draw customers from a Greek background. If possible, find existing franchises in locations with a population make up similar to your territory to see if the concept does well. If the potential business serves teens or tots or seniors, does the territory in which you want to open have sufficient numbers of the appropriate customers? Don’t assume you know the answer – do your research!
Income Levels – Equally important to age and ethnic characteristics is the income levels of your population. While fast food and quick serve family restaurants may do well in a variety of locations, other concepts need to be located in areas where the income levels are sufficient to the product or service you will provide. If you will be offering something most would consider a luxury item, such as laser hair removal or spa treatments, make sure the average income is high enough to support your business.
Purchasing a franchise is not a guarantee of success. You will have the accumulated experience of those who have gone before you and you will have the training and support from the franchisor who has a vested interest in seeing you succeed. But to misquote a line used in many movies, failure is an option.
To maximize your change of success and to diminish failure as an option, it is very important that you thoroughly research the franchise opportunity itself and that you also thoroughly understand the demographic makeup of the territory in which you wish to place the franchised business. Not every concept will do well in every location. Sometimes success of a concept is a matter of good timing, whether because of current trends or the economy or even changes in the population density or makeup.
Which brings us back to the question of whether the residential landscaping franchise that does so well in Phoenix, Arizona will do equally well in Raleigh, North Carolina. Professional landscaping could be seen as a luxury item so you would want to be sure the average income of your population would support this type of purchase. You would also want to look for data on the number and value of the single family homes in your area. Ask the franchisor for names of franchisees who work in areas with a similar population to your proposed territory and find out how successful these franchises are with the concept.
In any business, gut instinct and experience will go a long way towards helping you make important decisions. But when you are risking your own capital on the purchase of a franchise business, be sure that you back up your instincts with research and hard data.
If you are willing to work hard, becoming a franchise owner could open an exciting chapter in your life. Just be sure you eliminate as much of the risk as possible by getting all of your questions answered before you sign on the dotted line.
How Can You Determine If A Franchise Will Work in Your Area - To learn more about this author, visit Kimberly Ellis's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Jay Kubassek(Jay's Full Bio: EvanCarmichael.com/jaykubassek) In five years, Canadian-born entrepreneur Jay Kubassek went from selling mufflers at a Midas franchise to revolutionizing Internet marketing with the 2004 launch of CarbonCopyPRO, a online marketing education company, now worth over $20 million with customers in over 160 countries.
As an independent film producer, his upstart film fund Aliquot Films is currently producing a films with Spike Lee and Abel Fererra (starring Ethan Hawke and Dennis Hopper.)
Jay's entrepreneurial spirit is irrepressible. He’s the owner of five companies, a professional speaker and trainer, international real estate developer/investor, extreme sport enthusiast and emerging philanthropist. Jay resides in NYC with his wife Jamie, son Milo and dog Cooper. Visit Jay's official website: www.JayKubassek.com - Visit Jay Kubassek's Website |
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Joe DagerJoe Dager is President of Business901, a progressive coaching company providing no-nonsense direction in areas such as Lean Six Sigma Marketing and organized referral marketing. What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe’s ability to combine his expertise with “out of the box” thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with.” - James R. If you want to learn more about Business901, start a conversation with us. We can be found @ Web/Blog: Business901.com Web/Blog: FundingYourNonprofit.com LinkedIn Profile Follow me on Twitter - Visit Joe Dager's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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