Franchise feasibility study designing the franchise system

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FOR THE POTENTIAL FRANCHISOR

With Maria Dinah A. Dimacali

Feasibility Study

An analysis and evaluation of a proposed project to determine if it (1) is technically feasible, (2) is feasible within the estimated cost, and (3) will be profitable.

Feasibility studies are almost always conducted where large sums are at stake.

Also called feasibility analysis.

The Underlying Business

Products and Services

The Systematization of the Business

The Support System

The Fees

The Potential for the Expansions

Sometimes, success of one depends on the success of others…

FEASIBLE, WORKABLE AND PROFITABLE IN THE LONG RUN…

With Maria Dinah A. Dimacali

Management Competency

Ensure whether the existing management (the franchisee) has adequate capabilities and staff to manage the growth of the franchise system

FRANCHISEES are appointed to become the integral part of the franchise system

Competitors’ Analysis

Competition on both at the franchise level and also at the consumer level

Conflict Management

Anticipate probable source of conflicts between the franchisor and the franchisees and devise strategies to resolve them

Economic Impact

Impact of investments, cash flows and profits of both the franchisor and the franchisees

Financing Requirements

Whether the kind of investment the franchise system requires shall be fulfilled by a potential franchisee

Alternate sources of finance

Exit Strategies

An exit clause

Modality to terminate the agreement

Marketing Strategy

Management Information System

Business Policy

Training and Programme Calendar

Monitoring Mechanism

Support Mechanism

A franchisor should carefully study the system and develop a franchise system that may provide an

answer to most of the questions that may arise during the implementation of franchising strategy.

AN INDICATIVE LIST… NOT AN EXHAUSTIVE LIST…