Researching a Franchise Opportunity can help to minimise risk
Joel Caws - Technical Director, Select Your Franchise
When making any investment, having all the information you need to make an informed decision is of vital importance. You wouldn’t hand your hard earned cash over to someone who walks up in the street claiming they could double your money would you? Of course, that’s an extreme example but the crux of the matter is that to minimise the risk of losing an investment you get all the information you can to ensure the best possible chance of success.
So we have established that it makes good sense to be well informed but the challenge for anyone thinking about starting a franchise business is where to find the best information. This task is further complicated by the huge variety of franchise opportunities. There are almost a thousand different franchise systems trading within the UK at this present time.
Fortunately, there are several good places to start off your research:-
Franchise Shows and Exhibitions
There are a number of different franchise shows that take place across the UK. These range from national shows to more local regional shows. This means that no matter where you live in the UK, there is likely to be a franchise show within reach at some point in the year.
The great thing about attending a franchise show is that you will meet a whole range of franchisors face-to-face all under one roof. This is a great opportunity to compare, ask questions and get answers. A word of advice though, doing a little preparation and planning ahead who you want to talk to at a franchise show is well advised since there may be more franchises exhibiting than you can possibly see all in one day.
Franchise Magazines & News
A number of the tabloids feature regular franchise sections in their newspapers. This is often a good way to see who is in the news and who is coming up with new innovations to stay ahead of the crowd. You may also find it helpful to purchase one of the franchise magazines that are packed with features, interviews and industry expert advice on choosing a franchise. Magazines can be additionally informative for finding testimonials of franchise business owners who are currently operating a franchise system you might be keen on.
Researching Online
The Internet is of course one of the easiest places to do your research since you don’t even need to leave the comfort of your own home. There are a good number of places to discuss and interact with others who are considering buying a franchise and also franchise directory websites which allow you to browse a large selection of franchise business systems. In addition, these website feature tools to enable you to quickly identify those franchise options which best suit your level of investment, location and industry preference.
The increase of social communities such as Twitter, Facebook or LinkedIn might also assist in your research because they enable you to converse and discuss with a wide audience who may offer their trusted thoughts, opinions and feedback on any franchise business knowledge they may possess.
We recommend a combination of the above methods for best outcome when considering the right franchise opportunity for you. Also be sure to get the right advice when it comes to the legal and finance implications of the franchise investment you will be making.
Tags: franchise advice, franchise investment, franchise opportunities, franchise research, joel caws
3 Common Mistakes to avoid when buying a Franchise
Joel Caws - Technical Director, Select Your Franchise
Investing in a franchise can be an ideal way to start up a business. Of course there are no guarantees with any business but with a little bit of research, it’s possible to lessen the risk of failure as much as possible and maximise the possibility of your new franchise business being a winner. Here are a number of common mistakes and some suggestions on ways to avoid them:
Mistake 1: Not researching the franchise properly
Problem: Would you buy an expensive product just because the company tells you its the best thing ever? Some might consider it, but the majority of us would think twice before spending a large sum of money on something, especially if you had never heard of the company before. We might read reviews from other customers for example or read more in depth information about the company and its products. When it comes to buying a franchise, bear in mind that you’ll likely be giving a substantial sum of money to the franchisor as a start-up ‘franchise fee’.
Suggestion: Find out as much as you can about the franchisor and its Directors. How long has the company been trading, what other businesses might the Directors be involved in. Does anything you find out give you cause for alarm?
Beneficial sources of company information can be the Companies House website, talking to the franchise sections of the main high street banks and also specialist franchise business consultants who might be capable to offer you some industry insight on any franchise business you happen to be considering.
In addition, check out if they are a member of the British Franchise Association. Association Member Franchisors are required to pass certain membership criteria which may give you some additional confidence in the franchise opportunity.
Mistake 2: Not talking to people who are already franchisees!
Problem: When purchasing costly services or products we often seek the advice of trusted friends and relatives, especially when we have no experience of purchasing that product or service before. Getting this kind of advice helps to minimise the possibility of making a mistake and losing money, especially if someone you trust has been in the same position and can point out pitfalls from their own experience to help you avoid them.
Suggestion: You might not have friends who have purchased the same franchise business you are considering. However, a franchisor will be able to provide you names and contact details of existing franchisees who were once all in the same position you are right now. Make sure you contact several of them to find out their experience in buying the franchise, how the business is working for them now they are trading and their opinion on the support the franchisor provides them with. This will be invaluable third party insight into the franchise business you are considering.
Mistake 3: Presuming that a Franchise business carries a warranty!
Problem: There can be a feeling that since a business is known as a ‘franchise’ it’s in some way a sure fire winner. The bottom line is that you will ultimately be the person responsible for success or failure of the business. A franchise is simply a business method that has been proven to generate a profit when it is ‘worked’ correctly.
Suggestion: Once you have decided to buy a franchise business, commit yourself to be dedicated, hard working and a believer in the franchise system you have chosen. Ensure you have the total backup and support of your loved ones as it will require a lot of time to develop a successful business.
Tags: Buying a franchise, franchise, franchise information, franchise opportunities, franchise research, joel caws
How to choose a Franchise Opportunity – Part 2
Joel Caws - Technical Director, Select Your Franchise
After part 1, you should have a shortlist of franchise options that:
- are businesses that you think you might enjoy running
- are available in the location you desire
- are in a price range you can afford
At this stage you will want to narrow down the choice further and hopefully end up with just one option that will become your new franchise business. So with that in mind we have a few tips that can help get you closer to this point:-
Research each franchise opportunity online
The Internet has made information more accessible than it ever was in the past. With a little help from websites like the Companies House website you can do a little research on who’s behind the company and what other commercial ventures they might be involved in.
Probably the biggest help though, is to search for the brand and see what third parties are saying about them. What do their customers think of their services? And what do their franchisees think about them? With social websites like Twitter and Facebook becoming a popular place for people to freely voice their opinions, it can be a valuable place to research the brand and find out what people really think.
Arrange to meet each franchisor
Taking an opportunity to go and meet the franchisor is an important step. By visiting their head offices, it will give you a feel for the people you could be working with and help you to decide if you might enjoy running your own business under the umbrella of this franchisor. Take time to find out all you can about the history of the franchise, how long it has been running, its track record and look to confirm the findings from your research you have already done online. Raise any points of concern you have.
Talk to the franchisees
Whilst at the franchisors offices, its a good idea to get a list of some franchisee references. Chatting to some of their franchisees will give you a feel for how the franchisee operates on the ground. The franchisees are, after all, the business owners who understand the day to day operation of practically running the franchise business.
Get professional advice
You will likely come across legal contracts, agreements and financial considerations during your research process. Consulting the appropriate professionals is essential to ensure you don’t sign something you don’t fully understand. There are franchise specialist lawyers who can assist with the legal side whilst most of the high street banks have dedicated franchise sections that can help with financing and advice on funding your franchise business. You might also decide to use the services of a franchise consultant who, through their extensive knowledge of the franchise industry, can help you to manage the whole process of starting up a new franchise business.
