You might have already had the dream of owning your own business, one day!
There are a few ways to do this, one of the most proven, and successful ways for sure is to do it through the franchising option, but for complete balance, it is fair to say that this option is definitely not for everyone, and we say this because if we all get the ‘fit’ wrong, neither party benefits!
We hope this short article gives you some insight…
Why Would I Buy A Franchise?
You will have the benefit of a tried and tested, proven business system in exchange for an upfront fee which will include training to get you up to speed within a matter of weeks, indeed, no need to start from scratch in terms of branding either, as that it also included and you will be able to use from day one under a clause called ‘Rights Granted’ (which simply means you can use the name under certain conditions whilst you remain a franchisee) very little time is wasted in hitting the ground running as you should be pretty much good to go at this point.
A franchise is by far more likely to exist for the longer term than going alone, which if you do some research on, you can have a read on how shocking the statistics are for failure rates on independent business start-ups compared to the same franchising statistics, we believe that this alone is a very good reason to buy a franchise, you simply increase your chances significantly of business success!
If You Want To Reduce The Business Risk, Buy A Franchise!
Think about the type of franchise that you feel you can be enthusiastic about, there is little point of buying a franchise to ‘buy a job’, it is well-known fact that happy franchisees perform better, performing better means you generate more revenue and this in turn means that the franchisor benefits greatly from your contribution to them by way of monthly revenue, that will, in part, complete the full circle for a very happy future together!
If you have decided on the type of franchise that you can really cut your teeth on, make sure you follow the initial recruitment process, after all, this is the very beginning of what you will be dealing with on a daily basis, so at the very least, show the franchisor that you are capable of doing what they are asking you to do, failing to do this at the outset will simply show a red flag to them, and as the best franchisors again look for the right fit (not necessarily your money!) your ability to show this at this stage is critical to the future potential success of joining the franchise.
Follow the process, sure, ask questions, get as much information as you can about the franchise, then what the next steps are, feel comfortable in what you are being told, leave no stone unturned, but then think about this:
Compare The Costs Of Going Alone, In Comparison To The Franchise Fee…
Does this now seem like good value to you, we would imagine in most cases the franchisor should adequately be able to demonstrate this, it is a common misbelief that franchising is all about selling ‘units’ and generating franchise fees, unbelievably, this should not be the main prize for a franchisor, the fee element should literally cover the cost to get you launched, so they end up with a willing franchisee in a localised area, to then make each of you successful and in turn generate the royalties that come back to them, this is way more lucrative for them than any upfront franchise fee, so have a careful look at what is being offered and take a view on this point.
Review The Franchise Agreement Before You Part With A Single Penny!
The franchise agreement is a critical document and will advise you on what your initial and ongoing obligations are, and there will be plenty of them, look at it as one way to ensure that you also maintain the standards and the brand gets protected, in the same way that the next franchisee comes along and similarly has to adhere to it just as much as you do, so not only does the franchisor get protected, so do you as the franchisee.
Ask questions about the agreement, this can be done ideally through a legal representative that specialises in franchising, or it can be via a range of franchise consultants whose sole aim is to educate you through the entire franchising process to ensure the right fit for you as the potential franchisee and the franchisor, this is very important to them as they will want to demonstrate their ability to find high calibre candidates that are good for the long term in the franchise network.
What Should You Look Out For?
There are downsides to franchising, just as there are with any business! Please ensure you have enough capital to not only buy the franchise but for forward cashflow to enable you to run the business, there are also financial incentives in the market place to get funding, these can usually be low cost and if this gives you a buffer until cashflow improves then it should be considered. As with any business, a franchise is typically not a business where you start on day one and literally have people ready and waiting for your products and services, you will get out as much as you put in, so be prepared to get back to basics, follow the process and the rewards will come.
You will not have total control either, remember why you are looking to buy a franchise, you want to side-step all the effort that would be required in starting your own business from scratch and have tools ready to roll out, the ability to do that will be protected, and is largely covered as we mentioned above in the franchise agreement, so if you are minded one day to have a ‘light-bulb’ moment and change a few things, then a franchise might not be for you (it should be said though that some franchisors would be receptive to new ideas!)
Ask For Help!
Great news for you as extra assistance from a franchise consultant should come at no cost to you! The consultant will be mandated by the franchise brand on franchise recruitment but this shouldn’t just come at any cost, in other words, the consultant again is looking for the best fit rather than simply trying to make a sale, so use these people, they know the process far better than you, often represent the brand independently and will even guide you through the appropriate channels until you accept or reject the proposition.
Let’s finish this short article with this final point…franchising in 2021 has rarely been this popular, it is widely reported that franchising has consistently grown through the last few recessions yet the UK has still a much lower percentage compared to other developed countries, now could possibly be one of the best possible times to be involved, buying a franchise can be life changing when done right!
This post was written by Richard Pakey VFP, Regional Director of Lime Licensing Group.