It can be a daunting challenge trying to find a suitable franchise. There are so many options, and your initial research will create more questions than solve answers. However, it’s vital not to purchase anything of this importance on impulse. Take your time, get the facts and be ready to make an informed decision when the time is right.
The purchase of the franchise, as well as the day-to-day business overheads, must be at a cost that is sustainable to you. It’s also important that the nature of the work is of an interest to you too.
A franchise has a much higher chance of success than other business formats. An independent study undertaken a few years ago demonstrated that over 90% of franchised businesses were still operating three years later. However, half of independent businesses were not, having failed to survive the same period.
Yet this does not mean that franchising is the ideal route for all those keen to start their own business. When considering your franchise options, start by examining those which you have a genuine interest in. This will go some way towards having a successful business.
It’s important to work in a sector that captures your imagination: One that will get you out of bed in the morning, full of energy, buzzing and totally focused. You must also be prepared to follow the franchise model. This is, after all, precisely what a franchise is. This tried, tested and trusted system has already proved to be successful, and ‘all’ you need to do is to follow it – and put it into practice.
Franchisors are always keen to find the ‘best fit’ for their business and are prepared to reject anyone who doesn’t fit the bill. For them, attitude is often more important than experience, talent and creativity.
Buying a franchise is a long-term commitment. Most contracts are between five and 10 years, with renewable terms. There are options mid-term, for those who may wish to exit the business, but these should not be taken lightly.
You must also consider your own personal and family goals. Do you plan to stay in your current home? What does your survival budget look like? Can you expand? And what about family support? These are just a few questions you must ask yourself.
So what will be the total financial commitment? On top of the fee, new franchisees may also – depending on the type of business – be required to pay rent or buy premises, as well as purchase stock and equipment. It can become quite expensive.
There is also the cost of ongoing support and marketing assistance provided by head office. Some of this will be included in the overall fee. Franchisors, themselves, have considerable day-to-day costs to pay for, such as staff salaries and property expenses. But also compare these costs with those you would incur anyway if setting up your own independent business.
Similar to any business, a franchise requires working capital and cash flow to keep it afloat. There are many profitable businesses that fail to survive, simply because they run out of available cash. This happens too within franchising. It is rare to start any new business, by opening the doors on the first morning, and then witness hundreds of customers entering your premises.
Usually there needs to be a strong marketing campaign, which can also be costly. Staff development is another requirement, along with business rates, gas, water and electricity charges. If you require assistance during your search to find the best franchise business to satisfy your needs, there are consultants ready to help.
In many cases, these consultants are paid for by the franchise brands themselves who are actively seeking new business partners. So take advantage of these franchising experts who are available to speak with, at no extra cost to you.
