Taking control of your future means not leaving it up to other people, circumstances or situations to decide what is best for you.
However, you may feel that the future has been taken out of your hands, especially with the events that have taken place over the past 2 years. This is particularly relevant if you are wanting to move from the world of employment to running and owning your own business. So, if you are going to take back control of things, what do you need to consider, so that you make sure that you have no worries or regrets about what you are going to achieve?
It is true that the remainder of 2022 will certainly see some challenges and changes. Added to that, we now have the race, campaigns and selection for a new Prime Minister too. Regardless of where you stand politically, we can all agree that this will just add to and compound the current uncertainty, that is already being experienced in the UK.
The franchise market is not immune to this either. However, it is no stranger to uncertainty and may offer some unique opportunities of it’s own. If you are looking to transition from employment to business ownership, choosing a franchise is definitely one of the safest, smartest ways to do it.
Many would be investors in franchising and potential business owners are starting to feel that they have waited long enough. Many have delayed or put off their move into business ownership because of COVID, cost of living rises, energy prices and WAR in Europe etc. Some are now fed up with waiting any longer and are determined to invest in their own future.
Like any new business start-up there is a risk involved. However, with franchising, understand that it is a controlled risk. With the political uncertainty and increasing demand for flexibility in the workplace, many aspiring business owners are turning towards franchising for the relative stability it offers. Often, a franchise can be a more viable option than starting a business from scratch, especially if you lack previous experience. Also, many franchisors are now in a much more robust position having weathered the storms of the past couple of years.
If you are dreaming of running your own business and considering purchasing a Franchise over the summer of 2022, here are some tips, questions and considerations, to help you to take control of your future and complete your due diligence.
Common mistakes to avoid
Not having sufficient funds to buy, operate and run the business until such time you can draw a wage from it. Making an emotional, hasty, uninformed decision. The business is not a good fit for you and your aspirations. Not spending enough time speaking with the franchisor. Not speaking with enough franchisees to validate what you believe the business opportunity to be.
Find out all you can about the Franchisor
What is the size of the business opportunity? How long has the business been established? How many franchisees do they have? What is the “churn rate” of their franchisees? How many franchisees do not complete the full term of the franchise? Have there been any franchise failures? What was the reason? How has the Franchise business system developed over the years? How strong is the brand? How experienced are the franchisor’s directors & employees? What support will you receive? Can it be substantiated? What does the training, launch and ongoing support consist of? What makes the franchise system stand out from any competition?
Do I have enough money to buy the business, operate the business until I can take a wage, and live while I get the business off the ground? What is included with the Franchise Fee? What are the ongoing Management Services Fees or royalties? How much working capital will I need to run the business? Are there any additional marketing or advertising fees? Any other ongoing or extraordinary fees such as IT Fees? When can I reasonably expect to break even? Can this be verified by the franchisees in the network? What can I expect to earn after fees, taxes etc? Can I grow the business? Do I need staff or premises? If so what will they cost? What will I be left with?
Always take legal advice from a franchise lawyer before signing any agreement.
What is the length or term of the franchise agreement? What are the renewal terms? Are there any costs involved? What are my obligations to the franchisor? What are the Franchisors obligations to me? Do I have any rights to transfer the business at a later date? What are my termination rights? What happens if I terminate the agreement before the end of the term? What are the franchisors termination rights? Are there any mandatory purchases from the franchisor? What happens if there should be a dispute? How is the territory defined?
I have put these questions together so that you can use the information as excellent guides. They will assist you in finding out what you need to know, so that you can close the gap and make the leap of faith less daunting.
The above questions and considerations are not an exhaustive list. It is impossible to turn over every stone when conducting your investigation of the franchise in question. However, if you follow this guidance, you should be able to avoid the common mistakes that people make.
You can use the information to compare competing opportunities, take the emotion out of your decision making and be confident that your decision is based on facts.