Demand in a New City: What to Check Before Selling a Franchise

A successful outlet does not, on its own, prove that a franchise will attract customers in another Belarusian city. Customers may come because of the owner's personal reputation, a nearby workplace or a lack of alternatives. Before selling a franchise, test whether demand is transferable: does the reason for buying still hold where those advantages are absent? For the franchising community, this assessment is the foundation of responsible expansion, not a promise of future profit.

1. Separate demand for your product from the advantages of your location

Start not by choosing a city, but by understanding your current sales. Take data from your own outlet covering a period long enough to capture ordinary weekdays, weekends and seasonal fluctuations. Break purchases down by time, product or service category, customer acquisition channel and repeat business. If you do not have enough data, put a collection process in place first.

Next, establish what need the customer is meeting. For a bakery, this might be a quick breakfast on the way to work, bread to take home or a place to meet someone. One format can meet several needs, but their relative importance will change in a new city.

Divide the factors into two groups:

• Transferable: product range, speed of service, a clear ordering process, convenient packaging and consistent quality.
• Location-specific: a nearby factory gate, customers knowing the owner personally, unusually favourable rent or the absence of a competitor in the next building.

Test your explanations by talking to customers and observing orders. Asking ‘Why did you choose us today?’ is more useful than asking generally whether someone likes the brand. Record the actual reason for the visit, not just positive feedback.

The outcome of this stage should be a brief hypothesis: who buys, in what circumstances, for which benefit and at what price. ‘Everyone needs our product’ is not a testable proposition.

2. Compare buying occasions, not city populations

A city's size tells you little about demand on its own. What matters is finding enough people with the relevant need and understanding how they already meet it. So compare not only cities, but also specific types of urban setting: residential neighbourhoods, business districts, transport hubs and areas near educational institutions.

Use the same observation checklist for each area under consideration:

• who is there during your proposed trading hours;
• where those people are heading and whether they have time to make a purchase;
• what alternatives are available nearby and through delivery;
• how much a comparable order costs;
• what might prevent people from choosing your offer.

Observe the area on different days and at different times. A lunchtime queue at a competitor does not demonstrate evening demand, and a busy street does not guarantee the right audience. Note any events that could distort the picture, such as a fair, roadworks, school holidays or the temporary closure of a neighbouring shop.

At this stage, you are not assessing the technical suitability of premises. You are checking whether the buying occasion on which your existing business depends exists here too. If it does not, suitable floor space and an attractive shopfront will not solve the problem.

3. Run a small test with measurable results

Before making long-term commitments, test your offer in a practical way: interview your target audience, launch an enquiry page or arrange temporary sales, provided that this format is permitted and all necessary requirements are met. Do not imply that an outlet is already operating where none yet exists. Clearly explain that this is a test and set out how customers will receive the product or service.

Decide in advance exactly what you will measure. Advert views indicate attention, enquiries indicate interest, and paid, fulfilled orders indicate willingness to buy on the proposed terms. These measures are not interchangeable.

Keep the test comparable to the future franchise. If it involves a substantial discount, free delivery and the founder's personal involvement, you cannot automatically assume that the results will carry over to a franchisee's day-to-day operations. Account for these advantages separately and test whether interest remains without them.

Before starting the test, write down your decision criteria:

• what result will justify continuing preparations;
• what result will require changes to the offer;
• what result will mean postponing the launch.

There are no universal thresholds: they depend on the product and the economics of the particular format. Also record why people decide not to buy. Sometimes the problem is not a lack of demand, but inconvenient collection times, order size or uncertainty about what a service includes. Change one significant variable at a time; otherwise, it will be difficult to understand what caused the result.

4. Use the findings to define where the franchise model can work

The outcome should not be a promotional claim that ‘the city is ready’, but a description of the conditions that justify launching the model. Set out the suitable audience, buying occasion, pricing constraints, important features of the competitive landscape and unanswered questions. Distinguish between observations, test results and assumptions.

In Belarus, franchising is specifically regulated by Chapter 53 of the Civil Code, ‘Comprehensive Business Licence (Franchising)’. Article 910 defines the contractual framework for granting a package of licensed rights in return for payment. Article 910-1 requires the agreement to be in writing and registered with the patent authority, the National Centre of Intellectual Property. Testing demand does not replace these requirements, and registering an agreement does not establish an outlet's commercial viability.

Before discussing a launch with a prospective franchisee, prepare a short briefing: what you tested, how you tested it, what the results were and what limitations you identified. Do not present test sales as a guaranteed outcome for a future franchisee. If the data contradict your initial hypothesis, change your expansion territory or the format itself before making commitments.

Practical takeaway: sell a franchise built around a clearly understood buying occasion, not simply a new city. First establish why customers buy, then test whether that reason holds locally, and only then decide whether to expand.