CASE STUDY FRANCHISE PROJECT
This hands on franchising analysis puts you in the middle of an operational franchise of your choosing, for the better part of your 8 week term. The project is a two-stage exercise, involving your careful analysis & reporting, using an assignment template/plan format, submitted through Liberty University Online Safe Assign by the end of week 7. During week 8, you will read & analyze two projects created & submitted by two other students in the course, & reply to both students following a template/plan that is also provided in the assignment instructions. This two-stage exercise combines the theoretical with the academic with the practical into a hands-on observation, interview & analysis that is the “icing on the cake” of your study of franchising this term. It is recommended that you begin your project early, build it week by week, so as not to fall behind in this very important part of your successful study of franchising.
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Description: This assignment has four principle elements: (1) Pre-Investigation Perceptions, (2) Enterprise Analysis, (3) Post-Investigation Summary, and (4) Summary Statement. It is expected that numerous visits to the business & discussions with the owner/operator will be necessary to gather information needed to generate a comprehensive analysis & report.
It is recommended that you make an introduction with the establishment owner/manager, explain the project under study, and ask permission to unobtrusively study observable aspects of the business. While not a course requirement, you may make a modest purchase from the establishment so as to become a patron. You may determine the owner/manager’s preferred time for you to make your observations (non-peak times), and in all instances, conduct yourself professionally.
In order to apply textual principles and analysis to real world application, you will:
Choose a nearby/local franchise establishment with which you are familiar.
Perform a detailed analysis, using the outline/template provided in the assignment instructions.
Address the 4-part Case Study analysis below.
Enjoy the freedom of structuring the report as desired.
Your 15–20 double-spaced paper, created in Microsoft Word using APA format will be due by 11:59 p.m. (ET) on Monday of Module/Week 7.
In addition, you are required to post your project as an attachment for your peers to view by the end of Module/Week 7 in a discussion board forum. Thoroughly review two students’ franchise projects and respond to their work in Blackboard by 11:59 p.m. (ET) on Friday of Module/Week 8.
Pre-Investigation Perceptions
Few of these prompts are intended to be short, one word, a few sentences reply. In fact, if they are applicable to your chosen franchise … detail your response(s). If the topics are not pertinent, then a brief response would be appropriate. Be sure to explain your rationale (no simple “yes” or “no” replies).
What are your perceptions of the business, prior to analysis? That is, “first impressions.”
What is the primary business?
Is there another, 2nd area of the business?
Is there a “brand” involved?
How long has it operated?
Are there other (brand) locations nearby?
Who do they compete with?
Initial observations?
Is it an expensive appearing establishment?
What do you think are the (operational):
#1 Expense items?
#2 Expense items?
What do you think is:
Daily sales
Annual revenues
Is the company profitable?
Is there anything about this business that should be changed?
Summarize your observation of this establishment, prior to analysis.
(2) Site Observation and Enterprise Analysis
Additional Franchise Information:
Principle goods and services (describe)
Approximate annual revenues
Length of time in operation
Owner/Operator suggestions to prospective franchise:
Ways to raise initial capital investment?
Personal commitment to business operation (hours per week).
Franchise selection and location choices.
Breakeven point (in time).
“If I had it to do over” recommendations from the operator.
Any co-branding
At least one face-to-face interview with the owner/operator/franchisee, involving an interview style information gathering session, is expected of you.
(3) Post Investigation Summary
How closely did your presuppositions about this business align with your discovery, based upon your investigation?
Identify significant differences.
What are the major advantages of this franchise?
What are the major disadvantages of this franchise?
What current challenges does the owner/manager face
In day-to-day business operation
Longer term challenges
Is this franchise a desirable franchise, based upon your investigation? Why or why not?
What recommendations would you make to the owner/manager?
What are the top 3 challenges to operating this business?
(4) Summary Statement
The following topical considerations may be helpful to your information gathering, observation & analysis … addressed within your project sections & the Summary Statement. You have freedom to structure your report as you like, so long as thoughtful topical development occurs & is reflected along the way in your comprehensive project analysis: Include as much information as you are able to gather, that is pertinent, meeting the length/comprehensive requirements … but complete the assignment formatting the way that you’d like.
Site Considerations
Dimensions – building, attachments, other facilities & lot. Describe.
Nearby utilities, services, adjoining properties.
Visibility of Site
Describe any obstructions to the visibility, upon approaching from all directions (billboards, trees, etc.).
Is there freeway signage or visibility? Describe?
Accessibility to Site
Describe left hand, right hand, center lane turn approaches, traffic signals, and other traffic patterns.
Is the franchise site easy to get to?
Is it on the rush hour side of traffic?
Describe any congestion, nearby schools, office parks, and factories etc. that may impede or favor the location from a franchise operational perspective.
Traffic observation & analysis
Primary street, additional thoroughfares/intersections
Weekday & weekend traffic patterns: detail.
Morning, Afternoon, Evening
Observed estimate speed of traffic?
Posted speed limit. Enforced?
# Of traffic lanes/turn lanes?
Describe Nearby Activity Generators (malls, schools, office parks etc.)
Have you spoken with other merchants in the area about location information? Why, why not? Could additional information be learned from them that is helpful?
Is shopping the primary activity generator?
Describe the 1 – 3 square mile area as it relates to the franchise location.
Estimated # of white-collar employees in the area? Source?
Estimated # of blue-collar employees in the area? Source?
Estimated # of service industry employees in the area? Source?
Estimated # of students in the area? Source?
Competitive Analysis – Explain your answers.
List nearby “brand” competition (same franchise). Describe in detail, distances, and common ownership, same/similar markets served.
Competing like-franchises in the area, proximity to one another.
Is the area over-subscribed with like franchises?
Is the area a prime candidate for franchise expansion?
List all direct & indirect franchise competitors within one-mile radius of franchise site, primary emphasis on “like” operations (e.g.: fast food, retail, etc.):
Competitive Table (name sources of data, create your own table)
Name Distance From Street Estimate $ Sales Volume
1
2
3 etc.
Describe any seasonality implications.
Demographics (name sources of data, create your own table)
Population Med Age Med Family Income # Per Household Radial Percentages
1 mile
5 mile
10 mile
Nearby zoning/restrictions?
Government city/county/state?
Is a liquor license allowed/applicable?
Describe any easements.
Photographic representation of the site/location (use small file size graphics {<500kb where possible}, no large file insertions or attachments. The predominance of the length of your project must not to be graphically represented.
Financial Analysis
Most owner/operators will cooperate in supplying a “range” of information; once you assure them that your information will go no further than your project. Request that ONLY estimates or ranges be given, for purposes of your educational analysis.
Start up capital required?
How did they raise start up capital?
What sources of additional capital, whether or not appropriated?
Did the franchise offer financial assistance?
Was this appealing, chosen, disregarded?
Monthly revenues?
Monthly expenses?
Assets by type? $ Cost?
Liabilities?
Retained Earnings?
Fees, Royalties, other fees? How much $, timing? Increase/decrease trends?
Profitability (% / $ per year).
Growing (year over year growth $ &/or %)?
Note: create a financial statement, income statement, tables, & gather the financial information necessary to create at least general financial statements. Need help? Research the kinds of financial statements used by franchises; tailor for your purposes; reference. From this data, conduct your analysis & draw your conclusions. No “winging it.” You have 7 weeks to research & analyze … it is for your own learning benefit. Seek ranges, if the interviewee isn’t’ readily forthcoming. Estimate where there are “holes” in the data, & explain the logic of your estimates. Your grade will suffer if everything is a range, if all information is YOUR estimates, & it appears little effort is given to his important section of your project.
Other Trigger Topics
Some may or may not be applicable. Some brief answers, but where beneficial, provide the necessary detail to render a comprehensive analysis. If in question, ask your instructor.
Company Name
Specific locations/addresses
Franchise HQ locations
Type of business
Key Personnel
Funds Requested
Repayment Plan
Marketing
Franchise Operation / Franchisee
Describe advertising, promotion, couponing etc.
Describe Grand Opening.
Ongoing advertising
What would /should be changed or added?
Management (franchise operation)
Describe routine communications & reporting structure
Degree of autonomy
Major policy overview
Disciplinary Process
Franchise User’s Group – Describe
Describe Training
What should be changed/added?
Financial Data Analysis (you may ask interviewee to help you with these … real or estimated data for illustration purposes)
Start up costs (itemized or sorted)
Financial position (credit rating) for securing eligibility?
Pro Forma Income Statement
Pro Form Balance Sheet
Pro Forma Cash Flow
Breakeven Analysis
Ratio Analysis
Taxation
Other Business Matters
Time to market – describe (from start to turn up)?
Legal issues
Insurance
Employment
Disclosure Statements
Regulatory Issues & Compliance
Growth over time
Growth plans
Other
Again, this is not a “yes” or “no” section. Consider as many of these issues as possible, & relevant. Include if applicable & detail. If not, an “N/A” may be given. If there are too many topics overlooked, your score may reflect incompleteness. If in doubt, as your instructor.
