The content was part of Pre-entry Franchise Education Program - Module 3 organized by ACCC and Griffith University
Peter Buckingham was asked by Griffith University tackle to some frequently-asked questions about site selection and territory planning in franchise industry.
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Spectrum also has other videos that can assist you in franchising, including data analysis, strategic planning.
Published in Franchise Buyer Jan/Feb 2016
This should be the biggest question asked in selecting and opening a new business.
If the business is already operating, then the past sales are a fairly good indication for the future sales.
On the other hand, if the business is a new business, how do you estimate what your revenue is likely to be? Whether it is a large franchised brand, your own independent coffee and/or cake shop, an ice cream or yoghurt store or any other retail business, the same basic questions need to be addressed.
How do you realistically estimate the sales in dollar terms that your new business will do?
If you are joining an established franchise chain, the Franchisor may offer to provide some information, such as the demographics of the area, and maybe a listing of phone numbers of other Franchisees for you to talk to. The final word from the Franchisor is along the lines of “Do your own due diligence, as I cannot say what sales revenues you will generate” (and you will probably be asked to sign a document confirming this).
Peter Buckingham is the Managing Director of Spectrum Analysis Australia. He is a certified Management Consultant, and a Fellow of the FCA and IMC.