Outside Research – Mastering Your Market

Getting hands-on with outside research ensures your franchise decision is grounded in real-world insight. Here's exactly how to do it:

Step 1: Scout Your Competition

• Secret Shopping: Visit local competitors or invite them to give a quote at a friend’s house. Evaluate their customer service, speed, technology, and marketing quality.

• Franchise Check: Visit or shop at an existing location of the franchise you're considering. How’s the atmosphere? What stands out positively or negatively?

Step 2: Real-Life Experience

• Shadow or Work With Franchisees: Ask franchise owners you connected with during validation if you can shadow them or even work alongside them for a few days. Offering payment for their time, especially to multi-unit owners, can help secure this valuable experience.

Step 3: Deep-Dive into Market Analysis

• Industry & SEO Research: Check SEO rankings and industry fragmentation. Identify the local demand and demographics.

• Feasibility Study: Consider investing in an outside feasibility study (around $5,000) if you’re unsure about local market potential.

Step 4: Territory Ground Truthing

• Have someone drive you around your prospective territory. Pay close attention to details you've never noticed before. This gives you a genuine feel for the local market dynamics.

Step 5: Consult Your Trusted Circle

• Create a straightforward business plan and discuss it openly with someone you trust—like a spouse or mentor. Can they spot something you might have overlooked? Gain their approval and insights before moving forward.

• Ask AI to look at your business plan and poke holes in it. Maybe the “holes” it provides are not important and maybe it points out a major red flag that you missed. Follow up with the franchisor on any issues in case you are misunderstanding something.

Step 6: Financial Reality Check

• Research and adjust your financial model to accurately reflect local costs including rent, utilities, taxes, and insurance.

Step 7: Review SBA Default Rates

• Visit SBA Lender Reports to understand default rates. This helps you gauge financial risks realistically.

Following these steps thoroughly ensures you're entering the franchise market fully informed and ready for success!

These articles are simple overviews of the franchise research process to know what to mentally prepare for as you begin the journey. If you want a guide that will give you the right questions to ask, at the right time, to the right person, you need to work with a Tracer Franchising broker. 

Click here to schedule a 30 minute intro call to begin your franchise research process. Our services are free since we are paid by the franchises. 

If you prefer to do the research solo, you can use the free Tracer Franchise Research app

All Steps in the Franchise Research Process

1. Franchise Education

2. Intro Call with Broker

3. Take the Matching Quiz and Follow up Interview

4. Franchise Presentation

5. Initial Call with Franchisors

6. Initial Franchise Disclosure Document (FDD) Research

7. Non-FDD Focused Calls

8. Start Funding Discussions

9. Financial Modeling

10. Speak to Franchisees (Validation)

11. FDD Deep Dive

12. FDD Review Call with Franchisor

13. Outside Research

14. Finalize Your Financial Model

15. Final Validation

16. Attorney and Accountant Review

17. Meet the Franchisor in Person (Discovery Day)

18. Making Your Decision- The Franchise Checklist