5 Top Tips for Budding Franchisees
Fiona Boswell - Senior Associate Solicitor, Freeth Cartwright LLP
1. Make sure your contract reflects the deal.
Your contract should contain all the key details about your franchise. From the simple facts – the name – to the key points eg. your territory, fees etc. If something isn’t covered it can be quite difficult (i.e costly) and in some cases, impossible to get a franchisor to honour that deal.
2. Get a fixed fee review and report from a Bfa affiliated lawyer. lawyers that specialise in franchising vetted by the British Franchise Association).
Your franchise contract is long and will be more favourable for the franchisor. It is key you understand what you are signing. Franchises are often granted for a minimum of 5 years and (unless you sell the business) you won’t be able to get out of it early even if you don’t like it/you cant make it pay.
3. Make sure you the own the contents of your website.
Social networking is a key part of any marketing strategy. This also applies to franchises. Most businesses engage contractors to design their websites. If you do this, legally although you are paying for the work, the designer owns the content. This can cause all sorts of problems particularly when you want to sell your business.
4. Have policies in place with staff.
As a franchisee if you have staff you are responsible for their actions. If staff use customer data improperly or abuse social networking sites to damage your brand not only can the franchisor terminate your contract but, you are often financially responsible for any damage caused.
5. Get advice before competing with your Franchisor.
Successful franchising is rewarding. At that stage you may be tempted to go it alone – set up your own business and divert your custom to it. Legally this could put you in hot water (even if your contract has ended) as most franchise contracts prevent you from doing this for a limited time (up to one year).
Fiona Boswell is a Senior Associate Solicitor at Freeth Cartwright LLP and Head of FC Franchise Build, Manage, Grow, Exit ™ Unit. You can contact Fiona on 0845 070 3812 or e-mail fiona.boswell@freethcartwright.co.uk
Whilst every effort has been made to ensure the accuracy of this article, it does not provide complete coverage of the subjects referred to, and it is not a substitute for professional legal advice and should not be relied upon as such.
Franchise Tip 10: Running a Successful Franchise Business
Joel Caws - Technical Director, Select Your Franchise
Welcome to our final Franchise Tip. If you would like to read our whole series of 10 Franchise Tips then you can click here to view them all.
We have covered the process all the way through to first considering a franchise to opening up shop so we just wanted to take a moment to consider how to best to be a successful franchisee and to really make your new franchise business work for you. So we will look at a few areas to consider:-
Stick to the Proven Franchise System
We have mentioned several times during our franchise tips the importance of the franchise business’ proven system. It forms the heart of the franchise and is the formula that leads to success. As a good franchisee, sticking closely to the system is one of the best ways you can ultimately be successful.
Work Hard
Be under no illusions: A business requires dedication and hard work! This is simple logic really. Work hard, be pro-active and you will reap the rewards of your work. Sit about all day waiting for the phone to ring and you will fast find yourself struggling.
Retain your Enthusiasm and Motivation
All businesses have good days and bad days. It’s easy to run a business when things are going smoothly. The real test will be how you handle the bad days. Successful business owners aren’t afraid to make mistakes, however they learn quickly from them and get up quickly from a fall with even more determination than before they went down. It’s really about a state of mind and the overriding determination to be a success. Believe in your business and believe in yourself!
Sell, sell, sell!
I have yet to find a business that doesn’t sell something (though if you know of one let me know!). Of course there are different ways to present goods and services but ultimately money is made by buying and selling. Some things are easier to sell than others as some appeal to basic human needs (food for instance) and don’t require buyers to think much beyond ‘what to choose’ rather than ‘whether to buy’. Other goods and services may need a little more convincing to show a buyer why they might need a particular service or product. Whatever type of product or goods you sell, make selling your number one goal! Don’t get sidetracked into paperwork or activity that doesn’t actually make money. Make sales targets and go for it! The more you sell, ultimately the more you will make.
We hope this series of franchise tips has helped you on your way. Our aim was to help you be as informative as possible if you are considering franchising as your route to starting up in business. We hope that this may give you insight and a head start to get you well on your way to trading a profitable franchise business.
Franchise Tip 9: Getting ready to lift off with your new Franchise
Joel Caws - Technical Director, Select Your Franchise
Welcome to our pen-ultimate franchise tip. If you have missed our previous franchise tips just click here to view them all.
By this point you should have narrowed down your options and have a franchise opportunity in your sights that you like and you are confident will work well for you. Here’s a list of some of things you will likely have done by this point:-
- Researched and found several franchise opportunities you think might work for you
- Spoke to and visited a number of franchisors on your short list
- Spoken to a number of franchisees who have given their feedback on the franchise business they run
- Spoken to the franchise section at one of the major high street banks regarding financing (if additional financing required)
- Narrowed down your options on the basis of your research, to select the franchise you think will work best for you
- Had further meetings with the franchisor in order to build you confidence that you are making the right choice
- Consulted a franchise specialist lawyer with regard to the franchise contract
Getting read for lift off!
Once you have reached this point you should have everything in place to get signed up, get trained and begin trading your new franchise business. These are the likely next steps you will need to make:-
- Signing of franchise contract in consultation with a franchise specialist lawyer
- Final arrangements of finance and payment of franchise fee
- Arrange for leasing or purchase of premises if needed
- Arrange any required training and set date for commencement of trading
Once you have completed the above you should be in a position to open your doors and begin trading your new franchise business. In our final franchise tip we will look at running your new franchise business successfully.
Tags: franchise, franchise business, franchise opportunities, franchise tips, joel caws, start a franchise
