10 things to know before buying a franchise
Nick Strong - Franchise recruitment advisor
Buying a franchise is a proven way of reducing risk and increasing the chances of success in business. This is because a franchisee (person who runs the business in their local area) is following the proven business system of the Franchise Brand.
However, buying a franchise and becoming self employed is no small commitment. Business can be challenging and there are ups and downs to manage in the journey. It is therfore vital that you prepare properly for your franchise search. Below are some suggestions that you may find helpful.
10 things to know before buying a franchise
1. Make sure that you have the backing of your family. You will need your family’s full support though out your trading life. This is especially the case in times when you are under time and cash pressure.
2. Consider your talents carefully. What are you good at? What do you enjoy in your work? Ideally look for opportunities that suit your core skills.
3. Decide what markets interest you. Franchise opportunities in the UK cover just about any market sector you can think of in the alphabet from Automotive to Web.
4. Be prepared to look outside your area of career expertise. Franchisors (brand owners) often prefer franchisees with little to know experience in their market. The reason for this is that the franchisee is usually more teachable when they depend wholly on the franchisor’s system. You are also more likely to follow the proven system when you wholly depend on it. This is important as following the proven system is vital to securing your success in business. You commit to following the system when you buy a franchise.
5. Do your research. Visit www.SelectYourFranchise.com and read about the franchise options available to you in the UK. Also read the Franchise Information section as this contains valuable insights from leading industry experts.
6. After researching the options available to you request further information and contact from franchisors of your own selection.
7. Read all further information carefully and make a short list of opportunities you wish to explore in greater depth.
8. Make appointments to visit franchisors at their head office. This gives you a insight into how the support team works and introduces you to key personalities you would work with as a franchisee.
9. Read the franchise contract carefully and use a British Franchise Association lawyer to help you understand your commitments and obligations under the contract.
10. Speak to your bank’s franchise department experts. Whether you need to borrow money of not, the banks hold their own records about franchisors and can give you their own view on any franchise you are considering.
Finally, once you have found the franchise that is right for you, work with the franchisor to prepare for training and trading launch.
All the best with your search. Follow your chosen franchise system with enthusiasm as this will help ensure your success.
Franchising in Developing Markets
Brian Duckett - Chairman, The Franchising Centre
It is fair to say that activity on the international franchising front has seen a dip since the economic turmoil started. This is not to say that businesses have lost interest in taking their systems overseas.
Indeed, franchisors already in international markets are pressing ahead with their plans to further develop their networks.
Developing markets are still hungry for overseas franchise brands as I found at the recent Franchise India conference in Delhi, and many people there have cash to invest.
At the head of the queue are shopping mall developers. Scores of large, new malls are being built in heavily populated, second-tier cities and their developers need all types of retail brands to fill them particularly those offering value space, fashions, food and beverages, beauty, and child play and education centres.
More than 50 are due to open by 201 1. A leading developer I spoke to expressed interest in taking the franchises for appropriate brands himself and installing them in prime sites in his own malls to ensure success for all concerned.
In fact, he openly stated that his ambition is to become the largest franchise brand owner in India within three years. With nearly a billion U.S. dollars at his disposal to build the malls and buy the brands, you wouldn’t bet against him achieving his ambition.
I am looking forward to scouring Europe to help him choose, so let me know if you’re interested in India, particularly as help is available from UK-trade & Investment and the UK India Business Council. Visit www.Franchise-Consultants.com for contact information.
In the UK there is much focus for franchise brand development from established overseas brands. A measure of the depth of the commitment and enthusiasm of these franchisors, who are from as far afield as South Africa, the U.S. and Australia, to enter the UK is that they will be sending senior executives just to do half-hour sessions and then meet with interested parties.
Keep an eye out for the next Master Franchise and Investment Conferencewhich consist of a series of educational presentations to explain master franchising, interspersed with up to six presentations from overseas franchisors looking for in the UK and Ireland. Visit http://www.franchise-consultants.com/home/international-franchising/the-international-franchising-centre.html for details.
British Franchise Association member franchises – do they offer more security during the downturn?
Richard Holden - Head of Franchising, Lloyds TSB Business
No matter what the economic climate, it is of the utmost importance that prospective franchisees thoroughly research the business opportunity they are looking to make an investment in.
They should speak to as many existing franchisees as possible and ensure that they ask the franchiser some challenging questions about the business before signing on the dotted line.
Lloyds TSB views franchising as a key market and is looking to lend to sound franchise business propositions.
Banks with a specialist franchise department, such as Lloyds TSB, can assist potential investors with researching their options.
The BFA (British Franchise Association) also runs regular seminars for franchisees across the UK and publishes a useful franchisee guide.
Clearly, making an investment in a well-established franchise opportunity with a sound trading record that has passed the membership accreditation of the British Franchise Association reduces the risks of the investor.
Having said this, there are risks in investing in any business, and the prospective franchisee must be confident that they have the right skills and the franchise will generate sufficient profits to meet their own commitments.
There are some excellent franchise opportunities available to individuals who are looking to invest their drive, commitment and enthusiasm as well as their hard earned cash. You can research options without obligation at www.SelectYourFranchise.com.
Banks are likely to be much more positive with finance requests from investors in a franchise system that has a strong track record over several years and who are members of the British Franchise Association.
Tags: BFA, British Franchise Association, franchise, franchise opportunities, lloyds tsb, Richard Holden
