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How to assess the franchise market

If you decide to buy a franchise you are going to be working, selling and promoting the same product and, or service for a long period of time. You'll need to be passionate about what you are selling. You can't suddenly decide you want to change or develop the product / service. So make sure the franchise has long term appeal and its market is not threatened in any way.

While the franchisor should be able to demonstrate a clear understanding of the future market for the product / service, it is prudent for you to make your own assessment by looking at the opportunities and threats to the franchise sector.

Please refer to the individual sections dealing with Opportunities and Potential Threats below

As a Franchisee - What to look for and be aware of…

• Is the market for your product / service expanding rapidly, growing slowly, static or declining?
• Does the product / service have special features which help it to sell? Does it warrant a premium price?
• Who would your competitors be and how competitive would your product or service be in relation to them?
• You have looked at the general market for your product, but what do you know of the local market in which you will be operating?

The more advertisements you see for the product or service now compared to a couple of years ago will, usually, give you an indication of the state of the market.

In order to make money for the franchisee and franchisor, the product has to have real advantages over competitors. For example, it may be difficult to maintain premium prices if the product / service could be easily copied by others.

Do competitors have any technical or price advantages? Could you improve on the service offered? What is their level of advertising? If there are no competitors, ask yourself why not.

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?

For further information please view the whichfranchise Evaluate the market section