By Karen E. Klein

Q: I'm considering buying an ice cream franchise in my local area. My concern is that the marketplace will become saturated with all the new startup franchises going in around here. Can the industry support the increase in retail capacity?
-- M.L., Monmouth County, Red Bank, N.J.

A: Dessert and treat franchises have had an interesting ride over the past 20 years, says franchise consultant and author Michael Seid (www.msaworldwide.com). One quirk with this category is that tastes and products change quite a bit over time. The other reality is that new, "specialty" products can eventually be added to the dessert menus of existing outlets, taking business away from specialized shops.

As an example, Seid cites the frozen-yogurt craze. "Some of the brands that became popular during the "great yogurt spurt" are no longer in business, or are much smaller and insignificant players in the market," he says. "Many people think the same will happen to the specialized smoothie shops."

But new concepts don't worry him too much because each year some become explosive successes. And keep in mind that older businesses can also become stale and eventually fail. "It's not whether they're new or old -- it's how well the product is accepted, whether it has 'legs,' whether the company is well-managed, and also whether they have enough money to make the franchisee a success," he says.

ASK AROUND.  Susan Kezios, president of the American Franchisee Assn., says potential shop owners must step back and perform some basic market research specific to their industry. "First of all, it's not ice cream weather year-round in New Jersey, so you'll have to account for seasonal sales fluctuations," she says in this case.

Kezios recommends soliciting demographic and market information. "Ask the franchisor what research they've done to show that your area is going to support another ice cream outlet," she says. "But don't solely rely on them. Some corporations just want to get their name out there and they may not be too careful about making sure there's a local customer base that will keep you in business," she says.

John Hamburger, president of Franchise Times Corp., which publishes Franchise Times and other industry publications, says franchisors typically rely on individual franchisees to know their local markets -- and you should tap their knowledge, too.

"A lot of startup franchises going in could be a good sign" Hamburger says. "Call your franchisor and ask to talk to other franchisees in the system, preferably in adjoining towns that are in situations similar to what you're contemplating. After you talk to a couple of them, you might get a sense of what kind of sales volume you'll do." Watch out for franchisors that won't make other operators available. "The good systems will be happy to provide you with information on their other franchisees," Hamburger says.

COLD, HARD FACTS.  Independently, you should connect with trade groups in the dessert and dairy industries. They typically will have statistics that will be helpful for you, though you may have to join the group or pay a fee in order to get it. You need data about how much ice cream is consumed in your state and how much of it is bought at "scoop shops" vs. traditional restaurants and fast-food outlets that offer dessert menus.

You should also find out what geographic radius is considered a market area for an ice cream shop -- in other words, how far will people drive in order to get their favorite mint-chocolate-chip cone -- and how many other ice cream franchises are already established in your area.

In the ice cream category, experts call solid franchise investments some very strong, well-established companies. There are also some "wannabes" that simply have a new name and may not prove successful. You're right to be concerned about saturation, but "with a solid brand, good product, good management, and a well-financed company, your risks are no greater simply because it's a dessert franchise," Seid says. "Just make your investments with your head and not your heart -- or, in this case, your stomach."

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Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues