As much as you need to evaluate the franchisor it is also important that you take responsibility for evaluating and investigating the market for a viable franchise business. It is questions such as the following that you should be asking:

  1. Is the business sector healthy or in decline?
  2. What is the product or service potential?
  3. Has a sufficient market demand been established?
  4. Who are the existing competitors?
  5. What percentage market share does the franchisor have?
  6. What is the value of the franchisor’s brand?
  7. Does the franchisor control the marketing?
  8. Is there a marketing fund?
  9. Do I need local area marketing?

If the investment you are making is linked to a store or an outlet, then ensure that a proper site evaluation is conducted. You will need to determine the following:  the viability of the location; demographics of the area; type of site; position of site; visibility and surrounding infrastructure. It is vital to determine if the parking is sufficient and accessible as well as the foot traffic. Ensure you are aware of the competition in the area as well as the success of existing and previous businesses on this site. The location must also be zoned for business and allow adequate signage visibility.

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