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Advisory 2011-07-17

Know the market before you invest

With almost every business or industry taking up franchise model it is becoming difficult for the business aspirant to zero down on a business opportunity that is best suitable for him. Under such circumstances, a thorough market research holds the key fo

By Abha Garyali Sub Editor

Franchise industry has recorded a steady growth of 30-35 per cent in the past five years and is projected to soar much higher in the coming years. The burgeoning franchise arena today caters to countless franchise opportunities. No matter whether it is a tried and tested concept of restaurants, fast-food, education or newer concepts like senior care, agri-products or pet care centres, franchising has engulfed all. However, with rising opportunities, there are rising number of franchisee failures also.

Before taking up a franchise aspiring franchisees need to consider and weigh the franchise in terms of its market size and market opportunity before investing their hard-earned money in it. The article presents a guideline to aspiring entrepreneurs to search the market of their desired franchise, understanding the need and to know the success/ failure ratio as well.

Significance of market research

It is true that a franchisor always does a careful study of the market before starting a franchise business. He does extensive research on the current market size as well as the potential market for his product/service. Nevertheless, it is also important for an aspirant to study his area or market before plunging in with a particular franchise. It is of utmost significance to gauge whether the particular product/service would do well in the aspirant’s market. Manisha Ahlawat, Master Franchisee, Vivafit India shares, “It is essential that the product/service you want to sell through your franchise fills a void in the local market and the product/service is readily accepted in the local market.” For this the aspiring entrepreneur has to keep a few things in mind and follow them. The various guidelines are as discussed below.

Guidelines for gauging the market

Getting into a business takes lot of hard work and an investment of hard earned money. Both can not be let wasted for not doing proper market study before initiating a franchise business. Therefore it is entrepreneur’s duty to research and select the right opportunity which can make him realise his dreams and reach his goals. For this firstly he has to study the market size and need of the product. Regarding this Ahlawat said, “Firstly the franchisee should tap in to their own network of friends, family and colleagues to get a general feedback on various kinds of franchise opportunities. A more organised and thorough approach can be taken by getting few marketing executives to conduct a research on the feasibility of running a particular franchise.  There are options to conduct surveys online also nowadays.  It is important to research the growth potential of the chosen franchise industry and the size of the franchise target market.”

Question the franchisor: As a responsible aspiring franchisee the entrepreneur needs to ask a lot of questions to the franchisor regarding hold of his product/ service in the present market.  Undoubtedly the franchisor has done his market study but it may not have included the franchisee’s area/ locality.  If a franchisor refuses from answering or gives wrong information, then the aspirant should re-think his decision about taking that franchise.

Need of product/service in the market: The aspirant should consider whether there is demand in the market for a particular product/service. In some cases there may be huge demand of the product in the national market but it may not be very useful in local markets. Therefore an aspirant should study his local market and also the need of customers before taking a franchise. Ahlawat said, “Before taking up the Vivafit franchise, I had studied the remarkable growth in the Indian fitness industry and also the lack of a women only fitness segment in this growing industry.  In the last decade women have gained buying power and do not hesitate to spend on themselves. Both these factors encouraged us to explore the women only fitness franchise options and Vivafit was the clear winner.”

Kind of product/ service: Franchising is not limited to a few traditional opportunities. With its popularity newer concepts have arisen which do very well in markets. Therefore before taking a franchise, the aspirant should consider the age of that particular product. If the product is long-standing and stable in the market of the aspirant, then he would get ample of statistics to study and research about the franchise. However if it is a new or rising product/ service in the market, then the aspirant needs to study the need of consumers of that market. For this he may need a lot of support from franchisor.

Find about fad markets: There are some products which do very well over a period of time but then decline. These are known as fad markets. Aspirants planning to invest money on them must be aware of their short life and should have another plan which can be implemented later.

Study competition in market: An aspirant should carefully research about the competition that would be faced by his franchise outlet. If the product/ service is traditional, then it is bound to have competition in market. Therefore it is best to start with unique marketing strategies to become more popular than others.  However if it is a new product with less competitors, the franchisee will get more time to come up with means to maintain their dominance in the market.

To summarise it can be said that studying the market and the product is the most essential thing while entering into entrepreneurship, whether is a franchise opportunity or business started from scratch. Franchising paves the future but aspirant himself has to select the franchise according to his market needs and popularity.

Comment
Siva Naresh 07, Mar 2011 at 04:35 PM
Dear Sir or Madam: I am writing this with interest in response to the concept of renting a mobile phone, posted above. I would like to know further details about the concept, the investment needed, training and any others if to be known.
DR.R.K.SHARMA 07, Mar 2011 at 06:13 PM
Dear Sir, Please send details of the Rent a Phone franchise. Thanks, RKS
Anz T Vasav 07, Mar 2011 at 09:47 PM
Dear Sir or Madam: I am writing this with interest in response to the concept of renting a mobile phone, posted above. I would like to know further details about the concept, the investment needed, training(whether training can be given locally) and any others if to be known.
RAJIV KUMAR MARWAH 07, Mar 2011 at 10:23 PM
SIR,KINDLY POST ME IN DETAIL THE REQIREMENTS FOR 'RENT A PHONE' FRANCHISE.
praveen 07, Mar 2011 at 11:44 PM
Hello, The concept was very unique and i was very much intrested in taking franchise. Please let me know the brief details of what a franchise has to do ? How much he has tto invest? and how the franchise would get benifit
satish choudhary 08, Mar 2011 at 02:09 AM
Sir, Read about your unique model. I am into telecom business of selling m/phones , rcv, e charge and accss. for the last six years.Would like to know further details
GAURAV 08, Mar 2011 at 03:57 AM
hi, please provide complete details for your rent a phone franchise...also discuss issues when mobiles are lost, stolen or not returned by borrower.... thanks, gaurav
Shivkumar Tilak 09, Mar 2011 at 02:58 AM
Rent a phone concept is really very attractive. I would be interested in knowing the various business models regarding the same
Harinder pal singh 09, Mar 2011 at 02:59 PM
want to know details
prasant 09, Mar 2011 at 04:14 PM
Intrested to know more about it.
Raj 11, Mar 2011 at 05:04 AM
Interested to know more about business models
rohit kochhar 11, Mar 2011 at 04:27 PM
I would like to know more about the concept.
mantabya mishra 11, Mar 2011 at 09:59 PM
it seems to be very attractive,i want to know all about its concept of Rent-a-phone franchisee & investment criteria.
sunil somani 11, Mar 2011 at 11:17 PM
Dear I am interested in response to the concept of renting a mobile phone, posted above. I would like to know further details about the concept, the investment needed, training and any others if to be known. I am looking for franchisee in jaipur regards
SHAH NEMCHAND 11, Mar 2011 at 11:49 PM
SIR I AM INTERESTED TO THIS CONCEPT .PLEASE SEND ME FULL DETAIL OF IT.
venugopal 12, Mar 2011 at 12:49 AM
hai this is very gud oppartunity to all customers i am from andhra pradesh warangal i am very interested of franchise plsend details
toushif 12, Mar 2011 at 10:07 PM
Hello, The concept was very unique and i was very much intrested in taking franchise. Please let me know the brief details of what a franchise has to do ? How much he has tto invest? and how the franchise would get benifit
ANUP KUMAR 12, Mar 2011 at 11:23 PM
the concept, rent a phone, is really attractive. i am very much interested in that franchise. plz sent me investment and further details.
suriyamurthy 13, Mar 2011 at 12:27 AM
sir...i hav more interst about phone rent ..i need more information about ur franchise
swarup 13, Mar 2011 at 02:15 AM
Intrested to know more ablout it.I am writing from KERALA.
PRASANNA KR NAYAK 13, Mar 2011 at 05:51 AM
Sir, Pls send me in detials for the Rent a Phone franchise as I am interested to set up it in WB.
udaijit singh 13, Mar 2011 at 07:19 PM
an appealing idea--still some grey areas which i would like to clarify--is Uttar Pradesh on your horizon too???
basant 13, Mar 2011 at 08:08 PM
Sir, Please kindly send me more details of "RENT A PHONE" and please state if UTTARANCHAL is also in your franchise list.
vicky hinduja 13, Mar 2011 at 09:31 PM
helo,this concept is surely gonna boom our indian market & i would love to be a part of it,so plz kindly send me the details of the concept & also the terms & the conditions to go for this franchise
Amit 13, Mar 2011 at 10:19 PM
Hi, please provide complete details for your rent a phone franchise...Amit
Sandip Borate 14, Mar 2011 at 11:40 PM
I am putting my foot in bussiness. Please let me know further detials to have franchise.
Manoj 15, Mar 2011 at 01:13 AM
Interested to know more.
jigar shah 15, Mar 2011 at 09:26 AM
dear sir, we are from mumbai. please tell us ur franchise terms for the same.
RohanTara 15, Mar 2011 at 10:28 AM
I'm interested in knowing more about the franchise. Please forward the details.
manoj baid 15, Mar 2011 at 06:38 PM
please send details
nishant kumar 15, Mar 2011 at 08:49 PM
Rent a phone concept is really very attractive. I would be interested in knowing the various business models regarding the same
ravi pareek 15, Mar 2011 at 11:58 PM
i want interested for this business plan,i interested for Jaipur,Rajasthan
saurav dutta 16, Mar 2011 at 12:51 AM
How the business model will work and it is said that it had been working in other countries, so what is the business model. How do we ensure the quality of the phone when returned, the price decline over a period for a model are some of the question needs to be answered. I belive that it is unique and may have very good oportunity.
SHAH NEMCHAND 16, Mar 2011 at 11:18 PM
HOW IT WORKs. KINDLY INFORM ME
SWARUP 17, Mar 2011 at 11:42 PM
READY TO INVEST
Yatin Shah 17, Mar 2011 at 05:48 PM
Details would be appreciated.
GANJIKUNTA BHASKARU 18, Mar 2011 at 12:04 AM
Pls explain full details
HIREN 19, Mar 2011 at 09:03 PM
hi i am from gujarat (baroda) just read about the new concept of business of renting a phone and i would definitely like to get the details of starting the business and also what will be the returns on it
Vishakha 20, Mar 2011 at 02:04 AM
Hi Do let me know the details. I am in telecom industry since more than a decade and would be interested in cities of Pune/Mumbai/Gurgaon.
vinay katta 20, Mar 2011 at 11:26 PM
i hereby wanted to know about the full details of your concept of franchisee in jaipur, raj.
aditi 21, Mar 2011 at 04:46 PM
kindly fwd me the business module and related details if you are looking for expansion in baroda(gujarat)
satyanarayana p 21, Mar 2011 at 05:40 PM
Your concept is good, but we dont understand the details and franchise method. Please send me the details for franchise nd concept details.
Mukesh Bhatt 21, Mar 2011 at 11:19 PM
HOW IT WORKs. KINDLY INFORM ME
Sanjit Mehta 22, Mar 2011 at 01:25 AM
Nice Concept But What About New Handset Stock And Remaining Risk Factors Like Damage etc...
22, Mar 2011 at 01:52 AM
helo,this concept is surely gonna boom our indian market & i would love to be a part of it.The concept was very unique.Please let me know the brief details of what a franchise has to do ? How much he has tto invest? and how the franchise would get benifit.FROM LAST 10 YEARS I M IN THIS FIELd
jatin saini 22, Mar 2011 at 02:19 AM
Sir, i would request you to kinldy providethe franchisee business model for rent a Phone concept. Awaiting reply
Vaibhav Gupta 22, Mar 2011 at 03:46 AM
SIR,KINDLY POST ME IN DETAIL THE REQIREMENTS FOR 'RENT A PHONE' FRANCHISE.
tarun sethi 23, Mar 2011 at 12:53 AM
please send details
pankaj 30, Mar 2011 at 10:02 PM
Your concept is good, but we dont understand the details and franchise method. Please send me the details for franchise nd concept details.
SHAH NEMCHAND 01, Apr 2011 at 06:11 PM
you send only new comment. but not any information . kindly send me concept and rules regulation.
Rushiraj 05, Apr 2011 at 10:35 PM
Further details regarding franchise will be of great help.
Lokesh Tokas 08, Apr 2011 at 05:27 PM
I am really interested in this concept. Please mail me the details. Thank you
rakesh 16, Apr 2011 at 01:46 PM
please send detail
Lovee Personal 06, May 2011 at 06:41 AM
Hello Sir, I would like to know more about this opportunity. Kindly let me know.
kalpesh gopiani 06, May 2011 at 08:26 AM
its a new and unique concept, but i dont understand how this business run, what is earning and what is risk factor, can u please mail me the details of this business I m really interested to start this business ASAP.
Rajesh Agarwal 29, Aug 2011 at 02:27 PM
Hi , This concept of yours is something new for this country and it sounds very interesting also . But i would like to know how can it be implemented as the mobile phones that would be given on rent would be of a much higher value .
Ajay S. 18, Sep 2011 at 12:24 PM
Please send me details of this business opportunity.
Vipul Solanki 29, Sep 2011 at 02:17 PM
Kindly forward all details, so that I can start spreading news about franchisee, so many people are interested to buy this franchise including me in Vadodara(Gujarat).. Thanks & Regards
rajesh agarwal 14, Oct 2011 at 03:10 PM
Sir , u have mentioned the benefits and the usefullness of mobile phones for the customer , but u hav\'nt mentioned how do we run this business of renting a phone and are this phones given by you or we need to have it in our inventory . \r\n\r\nPlease do let me know the procedure and the requirements of running this business in details if possible .\r\n\r\nThank U.
hemant nebhwani 14, Mar 2012 at 12:42 PM
Kindly forward all details, so that I can start spreading news about franchisee, so many people are interested to buy this franchise including me in kota(rajasthan). Thanks & Regards
hemant nebhwani 14, Mar 2012 at 12:47 PM
Hello, The concept was very unique and i was very much interested in taking franchise. Please let me know the brief details of what a franchise has to do ? How much he has to invest? and how the franchise would get benefit
HEMANT 14, Mar 2012 at 12:47 PM
Hello, The concept was very unique and i was very much intrested in taking franchise. Please let me know the brief details of what a franchise has to do ? How much he has tto invest? and how the franchise would get benifit
R.C.Gautam 29, Jun 2012 at 03:44 AM
The concept is unique in itself but the nitty gritty are not disclosed. What if the person to whome phone is rented does not return it or does not pay rent.
srinivas 25, Jan 2013 at 09:59 AM
ple send me the total business concept
Purna Ch. Panda 24, Dec 2013 at 12:29 PM
Dear Sir, I am very impressed in your concept.
pradeep sharma 27, Jan 2014 at 08:38 AM
Interested to know more about it.
vivek bhargava 15, Feb 2014 at 05:03 AM
Need to understand the concept and the economics of the concept.Pl send details
Dinesh 24, May 2014 at 02:36 PM
Dear sir, pls send me details I start a franchise in Kolkata.Thanks
Vijay 15, Jul 2014 at 12:34 PM
Can you send more details
Dass 28, Jul 2014 at 03:46 PM
I would like to know further details about the concept, the investment needed, training and any others if to be known. To knowing the various business models regarding the same
kunal 13, Jan 2015 at 03:11 PM
sir very impressed with this new concept want know about this thing when ur r reaching punjab (ludhiana)
Srigopal Daliya 20, Nov 2015 at 03:41 AM
I am completely impressed with this unique model which I have not heard of before. Mind it, I have lived in western countries for 6 years in past 10 yrs. In fact, right now I am in USA from past 3 yrs. I am interested to know more details about this concept, some success stories and what do you think about this concepts success in Tier - III cities?What kind of investments would be needed, and how about the ROI in the business?
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