What You Need to Know About Feasibility Studies | Evergreen Franchise Advisors

One of the earliest steps you might take in opening a franchise is the feasibility study, which evaluates the market, its hunger for new options and its capacity to support them, among other things.

The work can help you ensure the concept is right for the area you’re thinking of locating it in and that enough customers there will support it to make it viable.

When you work with Evergreen Franchise Advisors, we can help you consider what research may be required and how it can best be done.

Some concepts require a feasibility study be completed before agreeing to a franchise license agreement. Others do that research themselves and can tell you from the moment you first express interest whether the market you’re considering is one they see potential in.

Still others may have no study requirement themselves, but it’s never a bad idea to get the big picture so you know exactly what you’re getting into and how likely it is you’ll find success. After all, this is your dream and your investment, so you want to be sure you have a good chance of growing the business you dream of.

What Is a Feasibility Study?

As we touched on above, feasibility studies vary widely in scope and execution, but here are some things a study might look at:

• Population, demographic, traffic and commerce data, all of which can typically be gathered from local, state and federal government sources.
• An area’s explicit or likely interest in a specific concept, which may require a small survey.
• What it will take to open the concept you have in mind, including facilities, technology and FF&E.
• What the competitive landscape looks like, which may involve looking at how many similar businesses currently operate in the area, how they’re doing and whether similar concepts failed there recently.
• What it will take to market the business, what type of marketing could be most effective, and how much of it you’ll need to do.
• What the likely operating costs will be, including recurring and replacement expenses.
• What it will take to staff and manage the operation to meet the expected business volume.

Those elements may all be covered in a single study and report, or they may be considered separately. It’s important to note the feasibility study is not a business plan.

While there is some similarity and information from the feasibility report will be used in the business plan, the latter will involve more detail on the day-to-day operation and operational requirements of the business being considered.

If you want a partner to walk through the franchising process with you that has the experience and expertise to help you be successful, Evergreen Franchise Advisors is ready to take this journey with you.