Buying a franchise is a great way to get into business for yourself but success depends on choosing the right one, and very importantly, choosing the right one for YOU.
In my last article, I looked at the ten things you must do before you buy a franchise. Click here to view.
Research was one of the ten and it is such a key part of the journey to becoming a franchisee that I thought we should look at this aspect in more detail.
But let’s take a step back first, why do you need to do your research? Surely a franchise is a safer bet so you can buy your success ‘off the shelf’ so to speak? Most definitely not! Buying a franchise is a great way to get into business for yourself but success depends on choosing the right one, and very importantly, choosing the right one for YOU.
Your research needs to give you enough information to make an informed decision – you won’t be able to check absolutely everything out before you go ahead but you need to understand what will be expected of you and what you can expect from your franchisor.
However, there is a fine line between doing thorough and effective research and spending so long trying to ‘prove’ that it will work that you don’t actually go ahead!
Let’s take a closer look at what I call the 3 stages of franchisee research:
- Discovery – finding out more about the franchise and the franchisor
- Researching – checking out the market, the industry sector, the location, the customers
- Planning – the financials, the funding and cash flow needs
You need to cover all the stages and once you have done so, you’ll know whether you are ready to go or if things don’t quite seem right. Giving up your job to buy a franchise and start your own venture is a big decision, not for the faint-hearted and it makes sense to be prepared and ready when you press the ‘go’ button!
Before you start the detailed research, you need to choose a franchise so you should already have thought about what you want to achieve personally and what type of franchise will suit your aims.
You will have explored different franchises to see what catches your eye, and narrowed down the field until you are ready to dig a bit deeper and at this point, you may still be looking at several options. The next phase will help you in your decision-making process.
- The franchisor’s website is the obvious place to start, most will provide some further details about how their business works, what they offer, and what they expect from franchisees.
- You can start to judge what sets them apart from the competition and can also see if they are members of the British Franchise Association (the bfa).
- Most franchisor websites will encourage you to ask for further information and arrange for a chat to find out more. When you do that, make sure you are prepared and be ready to impress. Although you are looking for answers from the franchisor and deciding whether they are the right one for you, the franchisor will also be assessing you and checking out whether you have the right skills and ambitions to become part of their network. It is a two-way process, and the franchisor is trusting you with their brand. Be open and honest in your dealings with them.
- Even at this early part of the process, follow the stages that the franchisor is taking you through – most will have a recruitment system which they follow. For instance, some will want an application form from you straight away, others might ask you on a group discovery day, virtually or at Head Office, at some stage you will probably need to sign a confidentiality form to obtain more detailed information, particularly around the financials. Each franchise will have their own way of finding out whether a prospective franchisee is the right ‘fit’ for their network and franchising is all about following the system!
- Find out how long the franchisor has been trading (and franchising), look at their financial information on Companies House. Even if it is a brand-new franchise, there should be a trading company which has enabled them to prove and pilot the business. Someone has to be the first franchisee, but you need to recognise that there is a greater risk if the franchise has not been fully piloted and proven.
- Speak to existing franchisees, asking them about the support provided, the training, any initial problems and how they managed to overcome them. If you get the chance to visit a few and spend some time with them, take it!
- Take all the information you've gathered, especially if you are comparing a few different franchise options and think about how much risk you're willing to take.
- Hopefully, this has led you to a natural choice and you will find yourself getting excited about the opportunity ahead, allowing you to build a business with the support and training from your chosen franchisor. The franchisor should by now have let you know that they are willing to consider you as a franchisee, but you will still need to go through the next steps to finalise the process.
Research and Planning
Now you need to look in more detail at the business itself, understand the industry sector and its challenges and opportunities, put a business plan together and ensure that you can get the funding you need to go ahead.
I will go into more detail about this research and planning in next month’s article as there is a lot to cover.
Buying a franchise can change your life, enabling you to take control of your future – so it is worth taking the time to work through the options and discover YOUR ideal franchise.