Franchise Feasibility Study

Franchise
Feasibility
Study
What is a
Feasibility
Study?
A feasibility study is a comprehensive
analysis conducted to determine the
practicality and viability of a proposed
project, idea, or plan. It involves assessing
various aspects such as technical, financial,
operational, legal, and environmental
factors to determine whether the project
can be successfully implemented.
The study aims to provide valuable insights
and data that help decision-makers make
informed choices about proceeding with or
abandoning the project.
A feasibility study is conducted prior to a

project’s undertaking such as a Franchise
project.
Principals of companies and their investors
want to ensure that any given project they
plan on developing is actually “feasible”,
and preparing a study showing this
feasibility is the main point of writing such
a report (which of course will help save
needed capital and time in the long run).
A feasibility study includes such vital
information and data as the funding needs
to complete the project, the market
opportunity, government regulations, risk
factors, strength and weaknesses, the
management team and the financials of the
company.
What is a
Franchise
Feasibility
Study?
Evaluating Various Factors:
Market Demand
Competition
Location
Financial Projections, and
Operational Requirements
In assessing whether a franchise
opportunity is likely to be
profitable and sustainable.
Key
Components
of a
Feasibility
Study
Title Page
Table of Contents
Executive Summary
Market Feasibility
Technical Feasibility
Financial Feasibility
Organizational Feasibility
Conclusion
Appendix and Reference Page
Franchisee
is an individual or entity that
purchases the right to operate a
business using the branding,
products, and systems of the
franchisor.
Franchisor
is the company that grants the
franchisee the rights and provides
support, including training,
marketing, and ongoing guidance.
Importance of
Franchise
Feasibility
Study?
Risk Assessment
It helps assess the potential risks
and challenges associated with
starting a franchise, enabling
informed decision-making and risk
mitigation.
Profitability Evaluation
The study examines financial
projections and estimates potential
profitability, helping determine if the
franchise can generate sufficient
revenue to cover costs and generate a
return on investment.
Market Analysis
By analyzing the market demand and
competition, the study helps identify if
there’s a viable market for the
franchise’s products or services in the
chosen location.
Operational Insights
It provides insights into the operational
requirements, staffing needs, supply
chain, and other logistical aspects,
helping ensure smooth business
operations.
Legal and Regulatory Compliance
The study helps identify legal and
regulatory requirements specific to
franchising, ensuring that the business
adheres to necessary laws and
regulations.
Brand Alignment
A feasibility study ensures that the
franchise concept aligns with the
brand’s values, identity, and
standards, maintaining consistency
across all franchise locations.
Financing and Funding
Financial institutions often require a
franchise feasibility study before
providing funding, helping secure
necessary capital for the franchise
launch.
Franchisee Confidence
A thorough feasibility study boosts
confidence among potential franchisees,
demonstrating that the franchisor has
done their due diligence and increasing
the likelihood of successful
partnerships.
Long-Term Success
By identifying potential challenges
and opportunities, the study
contributes to the long-term success
and sustainability of the franchise
business.
Informed Decision-Making
Ultimately, a franchise feasibility
study provides the information needed
to make well-informed decisions about
whether to proceed with the franchise
opportunity or explore alternatives.
Identification and
Exploration of
Business Scenarios
of Franchising
Expansion
Franchising allows you to rapidly
expand your business into new
markets without bearing all the
costs and risks.
Standardization
Franchising ensures consistent
product quality, branding, and
customer experience across
different locations.
Capital Infusion
Franchisees invest their capital to
establish and operate individual
franchises, providing a potential
source of funding for your
business.
Local Expertise
Franchisees bring local market
knowledge and connections,
helping your business adapt to
regional preferences.
Risk Sharing
Franchisees share operational
risks, allowing you to mitigate
financial and operational
burdens.
Economies of Scale
A larger network of franchises
can lead to cost savings through
centralized purchasing,
marketing, and other resources.
Brand Exposure
Franchisees contribute to brand
visibility, promoting your
business in various locations.
Innovation
Franchisees might offer new
ideas and innovations,
contributing to the overall
growth of the business.
BSBA FM - 4A Group 1
Abad, Joan
Arpon, Nicole
Agosto, Jessa May
Bacayon, Jovelyn
Banluta, Jennivelle
Borrinaga, Dhannaveah
Caliao, Rashel

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A feasibility study is conducted prior to a

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