Tips for finding the right franchise for you
- Nick Strong – Franchise recruitment advisor
In these times of economic change many people are considering what they might do with their futures.
Below are some tips for finding the right franchise for you. The tips will also help you determine if in-fact franchising is right for you or not.
Tips for finding the right franchise for you
2. Speak to your family and explain your thoughts about wanting to build your own business. Make sure that the people that will be most affected by any change in your employment status understand your motives. Make sure that your family will support you emotionally and if possible financially.
3. Recognise that business is hard work and can have its ups and downs. Happily franchise business is all about replicating proven best practise so this minimises the downs and maximises the ups. It is vital therefore that you want to FOLLOW a proven system.
4. Visit information rich sources such as www.SelectYourFranchise.com and franchise exhibitions where you can research information about franchising and genuine franchise business options that are of interest to you.
5. Arrange to visit the franchise systems that are of most interest to you. Meet the key people that would train and support you. Do you like them? Could you work with them? Does the visit create confidence in you?
6. Ask for contact details of their franchisees. Speak to the franchisees and ask about their experiences. You could ask questions like, are you happy with the franchise? Are your profitable? What support do you get? How has the recession effected your sales and profit? Knowing what you know, if you were me would you buy the franchise?
7. After you have completed your research identify which franchise opportunities are of genuine interest to you. Make a short list.
8. It is vital now to speak to your bank. Ask the bank for a report of what they know about the franchise systems of interest to you. The banks keep their own records of all franchise busiensses known to them. From this information you can gain an independent report about the bank’s view of your preferred options.
9. If you need to borrow money banks will often lend up to 70% for a proven franchise concept. This is because over 90% of UK franchisees run profitable businesses according to the British Franchise Association National Franchise Survey which gives the banks a lot of confidence to lend to first time franchise business owners.
10. Finally you will need to look closely at the franchise contract from the system you have identified to move forward with. This document governs the trading agreement between you and the franchisor. A British Franchise Association accredited lawyer should be consulted.
When you have completed the above steps you will be in a position to decide what franchise is right for you. It will then fall to you and the franchisor to sign contracts, pay fees and set up training and your franchise business launch programme.
Take your time, find the right franchise for you and work with the franchisor and your customers to build your own successful business.
Tags: banks, borrowing, British Franchise Association, franchise business, lawyer, lending, nick strong
Banks make profit in recession – can franchise business benefit?
Nick Strong - Franchise recruitment advisor
At the beginning of August Barclays have announced profits for 2009 at nearly £3 billion pounds.
Across the group, Barclays income has soared 37% to £16.3bn, more than enough to absorb a rise in bad debts caused by the worst global recession since the 1930s.
Because other banks have suffered more from the recklessness of their lending and investing, Barclays has been able to expand its share of the market.
But although Barclays managed to survive last autumn’s banking crisis without a direct injection of capital by taxpayers, and it wasn’t semi-nationalised like Royal Bank of Scotland and Lloyds, it has benefited from significant loans and guarantees from the public sector.
HSBC profits from gobal trading are down half but the bank has still made £5 bn profit during the current recession. HSBC gained from record investment banking profits of $6.3bn during the first half of the year.
Franchise business benefit from bank lending
Clearly the gains made by the banks at present focus around the investment banking sector. So can franchise business benefit from the recent profit strengthening of the banking sector?
The key benefit that franchise business offers to banks is its stability and trading success. Over 90% of franchise owners run profitable businesses according to the most recent British Franchise Association/Nat West National Franchise Survey. This is good news for lenders as successful repayment of loans is high.
The franchise department departments of the leading banks, that includes HSBC, Lloyds TSB, Nat West and RBS, have announced at British Franchise Association meetings that they have capital to invest in franchise business development.
The key fact to note is that banks are looking at lending to franchise business owners with far more scrutiny in 2009. The franchise brand and new outlet business plan must be robust and well researched to achieve funding offers from the banks.
To research franchise businesses for sale visit – www.SelectYourFranchise.com.
Tags: banks, Barclays, franchise business, hsbc, lending, lloyds tsb, Nat West, nick strong, profit
Bank payoffs – franchise departments focus on lending
While the media and public rage against the large bank payoffs that seem to be rewarding failed executives, the franchise departments, of the leading lending banks in the UK, are keeping their focus on helping franchise businesses lend and grow.
Attendees from HSBC, RSB and NatWest franchise depatments have all assured delegates at British Franchise Association forum meetings this year, that their departments are very much open for business and lending. However, the banks are making it quite clear that any approach for lending will met with a cautious eye.
Banks are now, more than ever, requiring a very robust business plan to support franchise lending requirements. The business plan, provided by the aspiring franchise buyer to the banks, must demonstrate the buyer’s understanding of the franchise, market and local competition. The plan must support any income prodiction claims with clear local research evidence. Off the shelf business plans provided by franchisors will almost certainly be knocked back by the banks.
In addition the banks look very closely at the frachisor. What is the bank’s relationship with the franchisor and its franchisees? What is the current and historic financial performance of both franchisor and franchisees from the banks own experience? British Franchise Association membership helps but is not the only criterion being considered by the banks when considering leanding to franchise buyers.
The franchise department’s of the banks are working with the governments new Enterprise Finance Guarantee scheme – EFG – that replaces the Small Firms Loan Guarantee scheme. Via the EFG, lending can be provided by the banks, and underwritten by the government. Sums available are up to £1,000.000 under the EFG scheme. However, the banks must agree to award capital under the EFG and at least 25% of the franchisee’s capital requiremnts must be provided or secured by the franchisee.. For more information, provided by the HSBC franchise department visit – http://www.selectyourfranchise.com/franchise-blog/?p=401.
Tags: banks, finance, franchise business, lending
