Know-How Exchange : Strategy

Now they are facing the unknown so a guesstimate should be good enough. I do not know the business you are in, but I would start with the local population. How many people live there? If it's a family business divide it by the average number of 3 or 4. You got one number. Then using your experience how often do people use it on yearly/ monthly or weekly basis? Multiply your number by the usage and you are one step closer. Now you know what demand you could expect for your offering.

Hope it helps
Adam

Adam is right in that you are trying to guesstimate, but find some logic behind it that makes sense. But there really isn't a process that works for all cases.

First thing to do is look at demographics of your current customers. Who currently buys your products at existing stores (age, income levels, etc.) and how many of those are at the new location. If you are a pizza place that sells mostly to college kids at a nearby campus, it makes sense that you would want the new store to be near a campus. If the restaurant focuses on lunch business at nearby businesses, then the franchise would also want to be where there are local businesses. By duplicating what you currently do, you make the start-up easiest (though of course, other demographics could work, but that makes the start-up harder).

Also look at competitors. For a client who put a bike shop in, we plotted out where competitive shops were geographically. The other shop was put on a map, and a circle of varying size (depending on how much of a competitor we felt they are - do they target similar customers, etc.) was drawn around them. Looked for areas where there were not a lot of circles near, yet still looked to have people who would be customers.

You might also try to gauge interest by creating an online local campaign for the franchise (paid local search) to see how many visitors you get, clickthru rates, etc.