Franchise PERT Chart: 1. Research and Analysis

Franchise PERT Chart
The step and function to be completed a franchisor

should open a franchised business.
1. Research and Analysis – mean to develop those
analysis which are necessary for a wise decision
about whether to start a franchise.
• The area analysis is the industry, identifying its
strengths and weaknesses, industry cycle, in-depth
analysis of the intended market for measuring
current demand and forecasting future demand,
identified market segments, target market and
market positioning objectives.
• The store prototype should be analyzed and
the management philosophy.
• A complete accounting and financial review.
(current financial strengths and weaknesses of
the existing organization.)
• Legal analysis to determine if the trade name
and or branded items can be registered and all
legal requirements can be met in order to
register within the states to qualify for
franchisee operation.
2. Organizational Development (Internal and External)
Focuses on internal factors in order to develop a
franchise system.
• Legal documents
• Operating documents
• Training manual
• Recruitment brochure
External factors
• Development of marketing plan,
• Franchisee Recruitment strategy
• Location analysis criteria
3. Marketing to Franchisees
• In-depth analysis and compilation of the
marketing package to be used to attract
prospective franchisees.
• Franchisee Profile
• Appropriate mass advertising
• Seminars advertised in local newspaper, major
trade shows
4. Franchise Selection
• Appropriate information on the application
• Conduct a well-designed informative interview
• Establishing solid criteria for acceptance or
rejection of an application
• Deliberating and deciding about territorial
restrictions
5. Site Selection and Training (Building designs)
• Determining markets in a geographical area or
region
• Selecting the market area with the best
combination of demographics that exists within
the region area that are most likely to produce
high volume sales
• Examining the number of sites in terms of their
“need” for an outlet store
• Forecasting the demand through an appropriate
method of trade
Once the site is being prepared and the building
is under construction most franchisees are
undergoing training by franchisor.
• Giving training for employees
• Delivery of inventory
• Promotion
• Grand opening
6. Start-up and Feedback
• Exciting moments in any franchise business is the
grand opening of a new outlet.
• Franchisor needs to follow up with activities that
assist the new franchisee during the early days.
• Collect information about start-up business
activity to apply toward the next grand opening.
• Feedback can be as unwelcome as reminders to
make tax payments, appropriate and regular
feedback is essential to a smooth franchisor and
franchisee relationship
PRODUCT LIFE CYCLE IN FRANCHISE
MARKETING STRATEGY
• The product life cycle model is a theoretical construct that can help a
franchisor understand the industry cycle and the cycle of specific
products in the franchise system’s product line.
Introduction and early growth – growth at an increasing rate.
When sales continue to grow but are increasing at a decreasing rate
until sales become stable. when competition is keen and the majority of
the franchise’s customers have tried one or more competitors products.
 Retention and evaluation stage coincides with stability, even
sluggishness in industry and firm product sales with decline in sales as
likely, if not imminent. (Ready to take place)
This stage is known in practice by its most outstanding negative feature:
finding new customers costs more than retention of current or past
customers.
Advertising /Promotion Strategy by
Product Life Cycle Stage
Introduction Decrease Stability/Maturity

and early growth growth stability to decline
1. inform/educate Build brand Retain existing

consumers quality in customer base
image and practice
2. Encourage trial Position against Build customer
use: samples and competitors relationships;
coupons based on core target customer
competencies groups
3. Build distribution Penetrate against Improve quality
System: horizontal capture a major
then vertical market share
4. Focus on market Improve quality Upgrade service;

niches; segment improve service; product;
market to better learn more about modify product
serve customer customer needs if needed
needs.
Marketing Tactics by type of Innovation
o Incremental innovation
 Innovation to product or its packaging using existing
technology that provides an incremental consumer
benefits
o Line extension
 Slight “tweaks”(change in order to improve it) to existing
products that provide no true incremental consumer
benefit
o Repositioning the product
 Target new customers, uses, or occasions with focus on
benefits not previously identified with the product/service
o Premium pricing
 Premium price to raise perceived value
o Value based pricing
 Value pricing to increase demand
Market Segmentation Method( Franchise
Operation
• Geographic – total geographic area you will serve
• Demographic – the age, gender, race, family income, and
other data of your total market area
• Psychographic – the lifestyle, values, and ethics of your
customers
• Benefits buying – the benefits that the customers are actually
buying; power, prestige, pleasure, profits, status, romance,
comfort, entertainment, durability, self-indulgence (behavior
or attitude of people), security and safety, convenience
• Users – the profile and the percentage of your customers that
account for the largest portion of your sales

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Franchise PERT Chart: 1. Research and Analysis

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Franchise PERT Chart

The step and function to be completed a franchisor

Introduction Decrease Stability/Maturity

1. inform/educate Build brand Retain existing

4. Focus on market Improve quality Upgrade service;

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