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Market Research
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Market research is the process of finding out where your franchise should go. You don’t want to just plunk, say, a hamburger joint next door to a Hindu temple: it’s essential that you figure out where your business has the highest chance of success. The ideal franchise should make money for you and the franchisee: it’s not enough to simply break even. Nor do you want to!
Think of it this way: the sales prospectus attracts franchisees, the nondisclosure agreement protects your company, the franchise agreement sets out the terms of your operations, and market research tells you where and how you should locate your franchises for ultimate success! |
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What is Market Research? |
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| Simply put, market research is taking your product to the people. Once you’ve decided on a potential area for your franchise, you need to examine that area, interact with the people, and make sure you aren’t making a costly mistake. Sticking with the hamburger example, the last thing you want to do is set up a burger franchise only to learn that 50% of the town’s population is vegetarian! |
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Franchise Directories |
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| The best way to start off your market research is by finding out what comparable franchises already exist. Fortunately, with the Internet on your side, franchise directories are easily accessible and a snap to use. Try a directory such as Franchise Direct
(www.franchisedirect.co.uk) or Franchise Expo (www.franchiseexpo.co.uk). Browse and see who’s already covering your product, where they’re
centred, and where there’s a need. You want to target areas that are not already saturated with your product or service – in other words, you want to make sure you’re moving into a profitable market. |
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Understanding Your Target Market |
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| You can save yourself time and money by understanding your target market before you begin market research. Stop to consider who buys your product and why. The target market of a music shop is very different from the target market of an upscale clothing outlet. Consider your average customer, taking note of such things as: |
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| Age |
| Gender |
| Race |
| Education |
| Marital Status |
| Family Income |
| Language |
| Ethnicity |
| Anything else that you think affects your customers |
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| Once you have an idea of your target market, you can begin researching locations and making appropriate decisions. If your target market is teenage girls, for example, you wouldn’t want to set up a franchise in a town known as a retirement destination. |
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Conducting Market Research |
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For some people, you’ll want to contract with a franchisee (or at least a potential franchisee) before you do a lot of intensive market research. However, at least the basics should be handled before you enter into any kind of verbal agreement, and you must conduct a thorough study before you sign a franchise agreement. Remember, your franchisee also has the right to access your market research and know that they are embarking on a profitable venture.
There are several methods of conducting market research. They are:
1. Surveys
Surveys are lovely because they allow you to communicate directly and clearly with your customers. Surveys take the form of a series of concise questions designed to give you a picture of the area’s demographics. You can conduct surveys; |
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| One on one (such as setting up in public locations and stopping people, inviting them to take part in your survey) |
| By telephone (you’re less likely to get a positive response, but you can complete the survey in your own time from your own home) |
| By mail (the easiest and most cost effective method, but also the one with the lowest response rate) |
| Online (consider this option only if a large number of your customers are likely to interact with you over the internet – i.e., if you have an online aspect to your business) |
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2. Focus Groups
Focus groups are more useful for large companies than small franchises starting out. You get a group of people together for several hours and lead them through carefully scripted questions. The negative side of this is that your sample size is very small, giving you an inaccurate idea of the market.
3. Field Trials
In other words, set up a miniature business, offer samples, and see what kind of response you get.
4. Observation
This is by far the easiest method of market research, but you shouldn’t conduct it on its own: use it as a supplement to the other methods. Observation means checking a given market to see what sort of businesses seem to succeed there, analyze trends, and check statistics, giving you a rough idea of the area’s market structure. |
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Analysing the Competition |
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| A useful tool in analysing market trends is analysing the competition. The competitive analysis chart is a free online tool and an extremely useful way to compare and contrast your business with similar competitors. This will give you a strong idea of where you stand in relation to other businesses. |
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How To Franchise Your Business Info Guide |
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Claim your FREE franchising consultation now
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Request a FREE 'Opportunity Analysis' with one of our experienced
business franchise consultants. During the analysis Franchise My Business will uncover the opportunities that exist within your business.
The detailed report will contain: |
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| Suitability for franchising |
| What you can charge for your franchise |
| The process explained |
| List changes needed to the business to enable successful franchising |
| Market analysis |
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No sales pitch - just good honest advice |
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Call 0845 020 4368 to book your free consultation |
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Our Fees
As you have seen franchising your business will generate a lot of additional cash. This option is also the quickest way to build a very profitable and high value business.
HMA Business Growth Solutions will complete 95% of the work involved in franchising the business. We will cover all legal costs (approx £5K), provide all the marketing material needed and provide a complete plan to recruit franchisees. We will also provide ongoing support and changes to the franchise system as required for a period of three years.
* £9995 + vat payable in 4 monthly payments (£2498.25 + VAT per
month).
This is a heavily discounted rate - we prefer to make the mass of
our fee by linking our fees to your success.
In addition we will: |
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| Advertise the franchise |
| Qualify the potential franchisees |
| Meet all potential franchisees |
| Any franchisees that we feel are suitable will be invited to
meet with you. |
| Close the sale and setup all legal contracts. |
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In return for handling this process and incurring many costs, our
fee will be 20% of the franchise fee. This fee will only be
payable on success.
Isn’t that refreshing - A consultancy company that links payment
to performance.
The exciting part of our service is that it won't cost you a
fortune. We mainly work by charging a small project fee and
accepting a minor percentage of the increased profits that we
create for you. |
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| We like to share in the extra profits we make for you. |
| This makes us highly motivated to achieve major increases in
profit. |
| Plus—we guarantee that your franchise will be a success or
we’ll work for you for absolutely nothing until it is or we will
refund your investment.
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| We are not like any other consultancy company you've ever come across. |
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Remember - if we can’t increase your profits dramatically
We’ll work for you for nothing until we do.
The Business Franchising Specialists
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