Buying an Investment Franchise Opportunity
Nick Strong, MD - Select Your Franchise
An investment franchise is one that generally requires a good amount of initial investment that may require some time to achieve a return. You could consider all franchise opportunities an investment in one sense since all will require some form of initial funding in order to get started and then look to repay it as the business becomes profitable.
However, some franchises require very little in the way of initial investment. There are some low cost franchise options that you could even be started up off a credit card or small personal loan.
Aside from these, there are a number of franchises that can be considered particular suitable as an investment option. Typically, they may be management type business options which do not require the investor to take too much of a hands on approach but rather recruit staff to manage the day-to-day operation. Popular options would of course be high street retail franchises, cleaning franchises or any other options that have the potential for hiring staff.
Another attractive option as a franchise investment would be to buy an already established franchise business. These are commonly referred to as franchise resales. The franchise for sale may have already been running successfully for many years but for reasons of maybe life direction or retirement, the owner wishes to sell the business as a going concern. Although naturally these will attract a higher price tag, they will usually begin to repay the investment straight away which makes them an attractive option.
Whichever option you choose its important to take due diligence in making your investment. Investing wisely and having done adequate research, will ensure you the best possible chance of success in your business venture.
Tags: franchise investment, franchise opportunities, franchise resales, franchises for sale, nick strong
Buying a Franchise Business: A guaranteed investment?
Joel Caws - Technical Director, Select Your Franchise
It seems a bold statement buy could buying a franchise business really be a guaranteed investment?
Well it would be great if this were true. To make a guaranteed investment is surely every business investors dream, the holy grail! Unfortunately, there is nothing guaranteed in life least of all when it comes to business.
There are however ways to ensure best probability of success. Many investors in the stock market use market signals to improve their chances of investing in the right stocks or shares and so increase their probability of getting a return on their investment.
In business, marketing departments will use statistics at their disposal to assess where best to spend their money to achieve the best return.
The point here is that, although the market trader and marketing department will do their best to put their money where they believe they will get a return, there is in fact no guarantee they will make a profit on their investment or even get their initial investment back.
We can see that it makes sense to study as much as possible where you are putting your money. Then you can invest wisely and know that you have made an informed choice.
As with any investment, franchising does indeed carry a risk. The benefits though, are that there is some statistics and track record to look at which can help you minimise the risks of your investment:-
- The recent BFA/Natwest 2010 Survey reported that 89% of franchise businesses in the UK were trading profitably in 2009. As opposed to conventional business start ups which commonly 4 out of 5 don’t make it beyond 3 years of trading.
- Franchise opportunities should be based on a proven system which gives a greater degree of security. To be a franchise, the franchisor should have run pilot businesses to test their concept and then documented the processes that make the business a success.
- Existing franchisees can help to reassure you that the concept works. This is why its important to speak to existing franchisees during the buying process as they have already walked the road you are walking.
Given the above, a franchise opportunity can appear favourable, however that doesn’t mean you should throw caution to the wind and invest your money into the first franchise opportunity you see. Like any investment, consider carefully and research the specific franchise that appeals to you. Remember its a long term commitment so you need to make it a good one!
Tags: Buy a franchise, franchise business, franchise investment, franchise opportunities, franchising, joel caws
Buying a Domestic Services Franchise
Joel Caws - Technical Director, Select Your Franchise
Domestic Services franchises make great recession resistant businesses in the UK. Due to the fact that many domestic services are necessities its likely that any franchise in this sector will do well since there is constant demand due to services breaking down or requiring service.
Domestic Services franchise businesses cover a range of services for example:-
- Domestic Cleaning Franchises
Houses always need cleaning whether it be general house cleaning, carpet cleaning, upholstery cleaning and such like. - Handyman Franchises
Theres always odd jobs need doing round the home and finding a handyman is not as easy these days as it was. Specialist handyman franchises have sprung up which cater for this market - Kitchen Service Franchises
Kitchen services such as oven cleaning cover the kind of jobs people put off constantly and having someone else do it for them is an attractive proposition. Kitchen door replacement franchises can give new life to a kitchen which is in need of a facelift. - Utility Franchises
Gas and Electrical services are increasingly regulated and there is a constant need for workmen with the skills to carry out home electrical and gas servicing and repairs.
As with any business investment, when looking into buying a Domestic Services Franchise its wise to carry out your research properly:-
- What is it you enjoy doing? Research the options and see what appeals to you. You can visit our domestic services franchise section for a good selection of franchise options.
- Look at budget and finances… what are the franchise fees and setup costs involved in the franchises that are of interest to you.
- Make contact with the franchisors which interest you and find out more about their systems.
- Arrange to visit the franchisors head offices and get some insight into their operation and support facilities.
- Get a list of franchisees that you can talk to about each franchise. This should give you a realistic, on-the-ground view from those people who are running the franchise day to day.
- Make sure your informed on the legal side of things by speaking to a specialist franchise solicitor.
- Most of the major banks have franchise sections… make contact with them to find out what finance and facilities are available.
- Finally, make your choice and commit yourself to the training and working the proven system.
