Ask the expert s


How can I ensure that the fra nchise I choose has a strong local market potential?


IAN C HRI S TEL OW Co-founder of ActionCOACH


u Find out from the franchisor how many target market suspects there are in your franchise's territory. Ask about the best ways to reach them and what the average response rates are for each marketing strategy. Then, ask for the contact details of a couple of struggling franchise partners, a couple of average performers and a couple of highly successful franchisees to fi nd out whether their experience in the marketplace compares well with what the franchisor has told you. It also makes sense to assess where


the franchise product or service is in the product life cycle. At ActionCOACH, we know that approximately one in eight business owners are interested in our services right now, but, because business coaching is at the early adopter stage, then that fi gure is highly likely to grow. Last, but not least, fi nd out if the


franchise's product or service is number one or number two in its market. Jack Welch, former chairman and CEO of GE, famously said: “Be number one or number two in every market, and fi x, sell or close to get there.” He understood that you're ultimately dead in the water if you're not


the number one or number two player in your niche market. Market share is important for franchised brands as the more market you take, the more your product or service will be recognised as a household brand and selling becomes easier, even for those greenfi eld territories, as you move to growth and maturity in the product life cycle (see chart).


Product life cycle and adoption


Stage 1 Stage 2 Stage 3 Stage 4 Stage 5 Innovations


Early Adopters


Early Majority


Late Majority Time Laggards


24


Sales


Research & Development


Introduction


Growth


Maturity


Decline


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