Richard Pakey offers advice to budding franchisees keen to join this growing sector. The franchising guru pays particular attention to the power of exhibitions.
There are many different avenues all prospective franchisees need to investigate before making that all important decision to commit. In my October column I will attempt to explain how best to reach that position, while leaving no stone unturned along the journey. Whatever the final decision happens to be, you will be required to do some serious research first. So what should you consider?
Franchise exhibitions
Exhibitions are certainly worth visiting, whether physically in person or by attending one of the growing number of virtual online offerings. Franchises are rarely purchased or sold at an exhibition, but it’s a great way to accumulate information or have a chat with the franchisor or to one of their top ranking officials. It’s a great event for budding franchisees and established franchisors alike. Even if you don’t place a ‘tick’ into the box, you can always write a ‘cross’, thus eliminating one of your possible choices. But beware, as exhibitions are not ideal environments for encouraging extensive dialogue, as time is often limited. There may be other potential franchisees waiting behind you in the queue wanting to speak to the boss.
Fail to prepare, prepare to fail
There may be in excess of 150 or even 200 franchised brands at any given exhibition. This means you will not be able to visit each and every one. If you consult a copy of the official exhibition programme, you should be able to select the ones that most interest you. This could be defined by sector or level of investment needed to start the business. There may even be sectors you’d never considered before, but actually find appealing. Reduce your options to a more manageable level.
The right fit
There is little point for a franchisor to sign up an unsuitable franchisee, and there is no mileage either for a budding franchisee to simply buy any franchise. It has to work for both parties. Neither scenario will end in success. It’s especially so for the franchisee who could suffer long term consequences as a result of a bad business deal. The franchisee may even end up financially ruined, or having to sell their property, or both. Dreams can be shattered. Likewise franchisors, who have built up a successful brand image over many years, could lose credibility by taking on the wrong franchisee.
Getting to the truth
It’s up to the prospective new business partner to perform their own due diligence, by asking pertinent questions. Some questions may be difficult to ask, even personal, but you must do it. Never depart any meeting with a franchisor without feeling you have received appropriate answers to every single question. You must feel happy that all of your concerns have been raised and answered satisfactorily. You should also consult family and friends regarding any impending decision. You may even want to seek the opinions of professional advisors too.
Attend seminars
Seminars are another tool for discovering information and facts about a business or a brand. There are many free seminars available to attend – whether online or in person or at an exhibition. Space is usually limited, so book your spot early. You probably won’t be able to ask any questions, but there is always plenty of good data and advice to digest.
Always think things through thoroughly
It’s rarely a good idea to purchase a franchise while attending an exhibition. This is also a huge red flag for franchisors too. The only occasion when I think this is even marginally acceptable is when both partners have been in serious dialogue previously and they finally want to get the deal done and dusted by confirming their commitment face to face. But never do this on day one. Exhibitions are meant to be used for information gathering, rather than signing on the dotted line. A typical franchise agreement consists of more than 60 pages, which all need to be read carefully and diligently, and may even require external professional advice.
It’s sometimes good to say ‘No’
Having gathered information about a business, you sometimes discover that a franchise is not all it’s cracked up to be. No problem. This is only natural and normal. Franchisors, too, do not want to waste precious time trying to talk someone into purchasing one of their territories. It has to be the right fit for both. So if you are a budding business owner, just be honest and tell the franchisor you are no longer interested in their brand. This allows both parties to act swiftly without wasting time on each other. Franchisors will appreciate your honesty and simply move on to their next enquiry or appointment.
Franchise exhibitions are a great resource when used correctly. There will be plenty of people to talk to, and you should learn a lot about many different sectors and brands. Don’t feel under pressure when attending and use them as a fact-finding mission.
For more information and advice about purchasing a franchise, please contact Lime Licensing Group.
