Chapter 4

(Janine’s Report) (Lynes’s Report)

Investigating the Franchise Opportunity Hiring the Services of Consultant
-Two considerations help in short-listing -A potential franchisee should think of
available business opportunities. appointing consultants who can guide through
1.) Selection of a sector or an industry the entire process of market potential
depending upon the liking and interest of a assessment to location planning, acquisition and
potential franchisee, and suitability with the establishment of a franchisee.
personal qualities of a franchisee.
2.) Assessment of financial requirement to Hiring the Services of Legal Advisors
operate a franchise and ability of a potential -Setting up of a franchise involves complying
franchisee to augment necessary financial with multiple legal requirements.
resources.
“The Four ‘R’s of Legal Advisors”
Selection of Sector/Industry
What are the industry’s economic traits? 1.Realism- the franchisee should be very
 Market size and growth rate at unit realistic in assessment of his business strengths
level and also at national level and weaknesses.
 Scope of competitive rivalry and its 2.Resources- many franchisees, during the early
intensity at unit level periods of their business when resources
 Number of players and key advantage constraints are common, tend to sometimes
each one of them offer overlook sending in the royalty payment to the
 Buyer needs and requirements franchisor.
 Pace of technological change in the 3.Research- research on the franchisor is a must
industry for the success.
4.Resolve- resolve to be part of the franchising
 Degree of product differentiation
system.
(Lanie’s Report)
Criteria for Overall Evaluation
 Knowing the self
 Knowing the financial strength
 Knowing the industry and the
franchisors
 Processing the information available
 Determining for what the payment is to
be made
 Preparing for the interview
 Meeting the existing franchisee