Will this Franchise Work in My Area?

Expert advice to help you determine whether your dream franchise will succeed in your market.


Will this Franchise Work in My Area?

It’s happened to all of us. We go on vacation or take a work-related trip, and while we’re on the road we discover a wonderful business. It might be a great restaurant, a wonderful new type of fast-food sandwich, a unique retail shop or even a service business offering a different twist on something we feel many people will want. Even better, we learn the business we’ve discovered is a franchise with opportunities available for new franchisees.

Invariably, we wonder how well that business would do in our hometown – raising a number of questions for us to ponder. Can the product or service be transplanted to where we live and still be successful? Will the brand draw sufficient customers? Will other people see the appeal that seems so obvious to us? Is there anything necessary for success in this business that’s missing from our area?

Though this is a wonderful way to spot potential opportunity, there are some important questions that a careful investor needs to answer before moving forward.

One of the surest ways to begin developing an answer to the question of whether the franchise will work in your area is to compare the demographics of the population supporting the existing successful business to the population in your area. It’s fairly easy today to find demographic data for any targeted trade area, so you should start your comparison there.

Some of the key factors in this demographic comparison include:

1. Total Population in Trade Area

Many businesses need a certain absolute number of people in the trade area in order to ensure enough potential customers to support them at a successful level. If you look at the demographics of the existing trade area and realise they have a few hundred thousand people supporting the business, you might have a problem putting one of these businesses into a small town with only a few thousand in total population.

2. Population Density

This is a corollary to total population. Ask the franchisor about the effective draw area (in other words, how far will a potential customer drive to get to a business like this?). Then compare the population density within that radius in both the existing unit and your area.

This way, you can make sure you not only have enough people, but also that the people you have are close enough to shop with you.

3. Population Race or Ethnicity

This can be an especially important factor if you’re considering a franchise business idea that appears to provide initial consumer appeal based on one of these factors.

4. Income Levels

It’s also very important to compare the average household income levels of the existing business’s market with your area. There are a number of businesses that succeed in a fairly tight income demographic, and you need to determine if the business you’re considering is one of these.

You then need to determine whether or not your area fits within the right income level. This is especially important if the business either has expensive products (like a high-priced restaurant) or a service that most people would consider a luxury rather than a necessity (like a home-cleaning franchise).

Another consideration relates to any international business opportunity you may come across and consider putting into your area. This can be a wonderful potential opportunity, but you need to keep an old saying in mind: ‘When in doubt, send a scout.’

There are so many uncertainties in international franchising that you want to make sure any concept can be successfully transplanted (by seeing someone else do it) before you invest. It may require more patience to do it this way, but history shows you don’t want to be the pioneer on this type of journey.

You want a franchise business that’s going to work in your area, and the less doubt you have about that fact, the less risk is associated with the franchise investment.

Often, the unique and exciting idea you see somewhere and then wonder about putting into your area is a concept that’s untested in terms of its general acceptance in the marketplace. That puts you, if you decide to invest, into the position of a true entrepreneur in terms of introducing a new concept to your market.

However, that also puts you in a much riskier position than you would normally expect when you get a franchise for a business start-up. Research very carefully to find out whether the concept will work in your area. If it can, then go forward and make your franchise dream come true.

Jeff Elgin
About the Author
Jeff Elgin has developed a consulting system that matches pre-screened, high-quality prospective franchisees with the franchise opportunities that best fit their personal profile.

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