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Q: What type of market research should I do before investing in a franchise?

May 19 2006

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There is not an exhaustive list of market research you should conduct, but as a minimum franchisees should check the financial stability of the franchisor by obtaining a copy of their latest accounts and having an accountant provide comment on them. They should also check the franchisor is a members of the bfa. They should obtain a list of existing franchisees from the franchisor and speak to as many franchisees as possible about the initial training they received and the ongoing support. If the franchisor says they have 100 franchisees this list should comprise 100 contacts for you to choose. If a lesser number is provided you should satisfy yourself that those provided are not just the good performing franchisees, but a cross-section. The management should also have experience in the sector they operate and have the necessary franchise experience, or have used appropriate professionals to gain the appropriate knowledge.

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