Franchise opportunities

How to evaluate the franchise market

If you are buying a franchise opportunity in Australia, you are going to be working, selling and promoting the product or service for a long period of time. You can't change or develop the product or service, so make sure that the franchise has long-term appeal and its market is not threatened in any wayIt is important that the franchisor can demonstrate a clear understanding of the future market in Australia for the product or service and that you both clearly understand the following:

 

Question
Is the market in Australia for this product / service expanding rapidly, growing slowly, static or declining?
 
Notes to consider
The more advertisements/promotion you see for the product or service now, than a couple of years ago, can give you an indication of the state of the market.
 
Question
Does the product/service have special features that help it to sell? Does it warrant a premium price?
 
Notes to consider
In order to make money for the franchisee and franchisor, the product has to have real advantages over competitors in Australia. It may be difficult to maintain premium prices if others can easily copy the product or service.
 
Question
Who would your competitors be and how competitive would your product or service be in relation to them?
 
Notes to consider
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 there are none.
 
Question
You have looked at the general Australian market for your product, what do you know of the local market in which you will be operating?
 
Notes to consider
Does the local market have the same characteristics as the Australian 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?
 
 

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