Do you often find yourself thinking about running your own business but you’re not sure if now is the right time? Consider these points and see if you’re ready to invest in a franchise.
1. You want to work for yourself but not by yourself
Franchising is an excellent option for going into business for yourself but having the support and guidance of a proven system behind you. Your franchisor will provide you with training, skills and the knowledge you will need to get the business running successfully. You will have a vested interest in the business, and rather than working to please the manager, you’ll be working to make yourself proud. As a franchisee you will also play a part in the business’ decisions and have a say in future plans.
2. You’re financially ready
Becoming a franchisee is an investment and the financials should not be taken lightly. Franchising can cost a lot of money and it’s important you consider all your options. Do your homework and have a plan for meeting all of the financial requirements both upfront and ongoing. Make sure you speak to your potential franchisor about the support that’s available to you as well.
3. You’ve got the mind-set of a franchisee
As with all business, as a franchisee you will have your ups and downs. There will be challenges and setbacks which you will need to face head-on. You will need to have the get-up-and-go attitude that will get you through these trials and make your business a success. If you are ready for the challenge, then it may be time to pick up the phone or take our Two-Minute Franchise Matching survey.
4. You’re getting all the right advice
Even if you haven’t picked the franchise system for you yet, it is important to hear advice from all areas. This includes the franchisor, franchisees, and experts from places such as the British Franchise Association. Visiting exhibitions and discovery days can be an excellent way of gathering information and learning all you need to know about franchising. We also have a free eBook available for prospective franchisees to download with top tips and best advice on how to find the right franchise for you. Download your copy by clicking here.
5. Your family is on board
Buying a business is a both a financial investment and a personal investment. Many franchisors will encourage you to bring your partner, friend or family member along with you on a discovery day so that you can have a trusted second opinion to hear. It will be beneficial for you to have your family encouraging and supporting you during your franchising venture as this is make the business-ownership process a lot easier.
If you are considering becoming a franchisee, make sure to check out all of our Franchise Tips for best advice.
Franchising is a highly effective and profitable way of going into business for yourself but not by yourself. It has become a global phenomenon which is increasing year on year. According to the BFA/NatWest Franchise Survey, franchising contributed around £15.1 billion to the UK economy in 2016 which is an increase of 46% over the past 10 years. There are also roughly around 621,000 people employed in franchising in the UK.
But why do people decided to become franchisees? Here are 5 reasons behind their decision:
This multi-billion pound industry continues to grow year on year. Not only is franchising profitable in a multitude of sectors, but it also embraces development in new business systems and innovations across all areas. The constant growth is powered by successful brands and the franchisees who have a vested interested in the development of the business.
As with all business, there will always be risk involved when joining a franchise. However, the backing and support of a profitable brand behind you will ensure that the systems in place have been tried, tested and are proven to work. Although there may not be much room for entrepreneurship, franchising removes the need for new business owners to create and test their own processes. Franchisees will already have all they need to get started; including, operations manuals, branding and marketing tools.
If you have not run a small business before, or you fancy a career change, franchising provides an excellent opportunity for you to learn everything you need. The initial training with the franchisor will teach you all the basics you will need to get your business of the ground. You will also be taught how to use the tools, methods and skills needed to run the business successfully. Ongoing training allows you to keep up to date with the latest processes and continue your learning. Franchisors will also help to train any employees you may take on as your business grows.
Not only will you have the knowledge from your franchisor, but the other franchisees can also provide you with a wealth of information. Everyone will be working to help the business succeed and will want to ensure no-one is at a disadvantage. Your fellow franchisees may have skills you do not and will be able to educate you and enable you to harness their talents for yourself.
In franchising, there is no need for you to start from the bottom. The business you are investing in will already have customer recognition and loyalty that comes with it. The power of the brand will be behind you from day one which puts you in an established position from the minute you start. If setting up on your own, it may take years to establish the same kind of recognition that a franchise already has.
If you think franchising could be the way forward in your career, why not get started by using our 2-Minute Franchise Matching service.
If you would like more information on franchising and how to become a franchisee, then download out FREE eBook ‘How to Select Your Franchise’.
Speaking to franchisors is an important part of the due diligence process when looking to invest in a franchise. This will be your opportunity to speak openly about your queries and discover if this franchise is the one for you.
What is the total cost of the franchise?
It is important you know how much you will be investing into the business in total. Most franchises will require an initial franchise fee and an ongoing fee. But also keep in mind set-up costs, marketing costs, working capital and legal fees. As each franchise operates differently, make sure you ask for the total investment cost (including VAT).
What support do you provide your franchisees?
As a franchisee, your franchisor is there to support and train you. Many franchisees come from a different sector than they invest in so it is important you are supported in all areas as necessary. This may include support in winning customers, marketing or key skills needed to do the job in hand. Find out how this training and support is given and how long the initial training will be.
How much can I expect to earn?
As for any business, it may take some time to get your franchise off the ground and start making a profit. Ask the franchisor what the reasonable estimate is for potential earnings. This will also help to tell you how long you can expect to work the franchise until you start seeing a return on your investment and how many years you will be investing.
May I speak to existing franchisees?
You want to be able to get a full understanding of the business from all viewpoints. Often franchisors will encourage you to speak to existing franchisees and you should not pass up the offer. Ask the franchisor who to speak to and how you can get into contact with them. This way to you can get an understanding from someone who has been in your position and is now working in the franchise you are interested in.
What will happen when the Franchise Agreement comes to an end?
Although you will just be starting out, it is important to keep in mind your exit strategy for when the time does come. Franchise agreements are often 5-10 years long but can be longer depending on the type of business and level of investment. You will want to ask the franchisor whether you will have the option to renew, or if you are able to pass on the franchise to someone else if that is part of your plan.