The Benefits of a Franchise Business
Joel Caws - Technical Director, Select Your Franchise
Back in 2002, when I initially began working within the franchise industry I was surprised on the huge variety of franchise companies out there, from the well-recognised, fast food chain restaurants that grace pretty much every shopping centre, to a multitude of home based franchise opportunities that you could call upon to have your boiler serviced, your garden tended to, your carpets cleaned, or the stone chips in your car paintwork repaired.
I think my biggest surprise was that I had, in fact, used many of these services myself with out even being conscious of their franchise heritage. Just about any service you can think can, and probably already has, been franchised. Browsing through any of the on-line franchise directories will quickly provide you with an idea of the quantity of franchise options accessible to pretty much anybody with some capital to invest, a willingness to learn, a dedication to stick to the system and put in some hard graft.
So what are the advantages to a franchised business over traditional self-employment?
A proven business system
The heart of a franchise enterprise its is proven business formula. A franchise is often born out of a traditional business which, after proving itself profitable, prompts the business owner to look for further ways to expand their already profitable business. The essence of the franchise concept is, quite simply, the replication of a proven business formula.
Having a business model which is already proven offers the key advantage over self-employment in that the franchisor has already done the hard work of trying and tested the business model. They have then documented the processes and procedures that makes it successful in order that it can then be adopted by another, giving them the power to duplicate their success.
Customer impression and the advantage of branding
Of course you don’t have to think hard to recognise the power of some of the big fast food franchise restuarants. This strategy of constantly enforcing a brand message means you go into any franchise outlet knowing what to expect… the same service, the same quality, the same product. This can provide a significant advantage over establishing your own personal unknown branded business. There are of course many smaller, lesser known franchise brands which even though maybe not as widely publicised, the customer impression that it is a part of a much bigger network can in itself deliver security and confidence to the shopper that can provide you with that all important edge over competition.
Funding
When providing funding for any business start up, the bank will always assess the most important thing – How likely is the business to succeed, and therefore, is the banks funding secure and likely to be repaid in a timely fashion.
Many banks look favourably on franchise start ups because they have a proven track record. Even in these more difficult economic times, the story from the banks is still one of being open for lending. The recession though, has put even more emphasis on the bank scrutinising any business plans to ensure that the chance of success is as high as possible; another benefit of choosing a franchise business since the franchisor can provide evidence of success to help backup the franchise business plans you go along with to the bank.
Training and support
Part of a franchise package is training and support to help make sure your business has the best chance of success. This doesn’t relinquish you of any responsibility, it is your own business after all, but it does mean that you are as equipped as possible to run a successful business or that there’s someone to talk to for advice and help when times are tough.
These are just some of the key advantages in selecting a franchise business over going it alone. However, franchising is ultimately an investment like any other business. Starting up a franchise business requires initial care and attention to make informed choices along the way and then working hard to ensure best possible chance of success.
Ten steps to buying a Franchise Business
Nick Strong, MD - Select Your Franchise
Considering a franchise is one thing – actually walking down the path of starting one up is quite another. If you are seriously considering a franchise as a route to starting up your own business, then making the right choices from the outset will help to ensure that you minimise the risk as much as possible.
As you look into buying a franchise, here are 10 things to consider:-
1. Examine your options carefully
Make use of online franchise business websites, franchise exhibitions and franchise publications to study the options available. You will discover a huge selection of franchises out there so don’t forget to search for something you’ll get pleasure from doing and that will suit your way of life and financial constraints.
2. Draw up your shortlist
You will find many different options, but you should quickly be able to elimate those that are of no interest or that are outside of either your available finance or desired trading location. Draw up a shortlist of those 2 or three options that you might genuinely see yourself doing. Request their franchise information packs either via an online contact request or give them a call.
3. Investigate Background
It’s vital that you identify who you are dealing with as you’ll be making a considerable investment decision. Take some time to find out the franchise company’s operating history. You might also wish to investigate the directors of the franchise companies and find out what other ventures they’ve got or are currently connected with. You could make use of online resources, such as the Companies House website, that can help with your research.
4. Get together with the Franchisors
When you are feeling totally knowledgeable regarding your selected list of franchisors, its time to make contact with them and arrange to meet up with them. Visit their head offices and get a feel for their setup.
5. Speak to Franchisees
Whilst you are visiting the franchisor, ask for contact details for some of their franchisees as recommendations. You can call them up and put to them questions on how the franchise performs for them as a business. Have they found the business to be profitable? Would they purchase the franchise opportunity again given what they now know?
6. Explore avenues for Financing
You might be lucky enough to have personal funds to invest from savings or a redundancy. But for many, they will require some external finance in order to start up a franchise. It pays to seek the advice of a bank manager in any case, or visit the franchise section of many of the high street banks. You can lay out your franchise plan and acquire some helpful reaction regarding what funding potential you might have.
7. Gut Reaction
Your gut feel concerning starting your own franchise business can’t be underestimated. It’s natural to have many questions and concerns, particularly as you become close to making a decision. The franchise operator, and any other franchise gurus you seek advice from through the process should be able to present answers and help settle your mind along your way. Nonetheless, if you are feeling overly anxious at any point, take a little time to work out what you might be worried about and resolve it prior to moving forward.
8. Get hold of some Professional Advice
There are a deal of specialist franchise consultants who have a broad understanding of the ins and outs of a franchise. They can help with matching you to a franchise business that works best for you in combination with helping the process move through smoothly. This can be of particular help if you feel overwhelmed by the options or just that extra confidence to help you make good, informed decisions in the buying process.
9. Legal Guidance
You’ll have to sign a franchise contract as soon as you have decided on the perfect franchise for you. It’s imperative that you take suitable legal advice from a franchise specialist solicitor that can help to make sure that any legal requirements are met and that can assist you understand the legal arrangement you’ll be entering into.
10. Lets get down to some good old fashioned work
A franchise opportunity, similar to each and every business, needs hard work. Don’t be fooled into thinking that a franchise will work automatically just because its a ‘franchise’. A franchise opportunity offers a verified system… however the system has to be worked hard in an effort to build a powerful and profitable business.
Tis the season to think about a new start!
Joel Caws - Technical Director, Select Your Franchise
For many, the Christmas and New Year period provides a great opportunity to relax, spend time with family or friends and take a well earned rest from the fast pace of life. It can also be a time when many of us are prompted to think about our future and what the New Year could bring.
We might make our New Years resolutions to get back down the gym and improve our fitness; decide to save up for a that long awaited holiday in the sun; or maybe it’s thinking about changing your job or employment circumstances. For those considering the latter, it might be that you have been doing the same job for many years and so are considering a change or it might be a change in life circumstances that is forcing you to consider new options.
If you are one of those who are thinking about new employment opportunities over the festive period, self-employment can be something that is considered but dismissed because of lack of knowledge or confidence over the broad range of skills required to successfully run and manage your own business.
Fortunately, there is a type of self-employment which can help in these circumstances. A franchise business is a self-employment option, based on a proven business formula which can provide the tools, training and assistance to ensure all the processes required to make the business work are covered. Of course any business will require hard work, but if you are willing to follow a plan and can be committed to work hard and make it work then a franchise business could well be your route to a new future.
There are hundreds of different types of franchise business in the UK, so if you are considering a new start over the festive season, why not take a look and see what kind of franchise business you could be owning and running in 2012.
