Getting into franchising can be difficult, confusing and shouldn’t be rushed into or done on the spur of the moment
Finding the right franchise for you can be tricky. Luckily, I’ve found the best way to find the most appropriate franchise for you. It all comes down to one thing: assessing the suitability of the franchisor.
Do they have a proven business history, documented systems in place and will they explain them to you in advance? Does the franchisor provide effective training and do they have a reputation for robust ongoing support with an evident structure? Finally, I would always be looking for their bfa membership – a sign of accreditation.
Secondly, you need to be sure it’s a good market to get into and that demand for the product or service can be sustained and that there's room for growth. So ensure that you assess the competition.
To ensure the franchise is the right fit for you, you should not only have questions for the franchisor but also for their franchisees. Ask if they are making money, how many hours they work, if they get good support from the franchisor and if they’d buy into the same franchise again. If the franchisor refuses franchisee access, that’s a red flag – walk away.
If you've followed these steps, you’ve probably narrowed your choice down to a couple of franchisors so it’s time to seek professional advice from a franchise lawyer to look over the agreement, a bank to talk finance and an accountant to support your business plan.
These two last steps are especially important once you have your heart set on a franchise. Why? Because you need to figure out how to pay for it. Fortunately, there are numerous ways to beef up your war chest. From ransacking your savings and selling ISAs to asking parents and other relatives for help, you would be amazed where budding franchisees find the initial investment.
Remember that a franchise is an investment, not a job, so you must determine exactly how much you need to invest and how much you’ve got. There is no point taking on a business that will only generate half of what you need. But also, beware over-extending – ensure you can make the repayments through the business.
But just because the franchise seems like a wonderful opportunity, you need to make sure you're the right fit for it. Be honest. Do your strengths and weaknesses match the criteria? Can you see yourself enjoying the business? Can you afford the business and is it a good investment? Do you think you can take the pressure? Finally, do you have confidence in your franchisor?
If you answer yes to all the above, then welcome to the world of franchising.