The five must-know truths about franchising

If you're an ambitious entrepreneur thinking of starting a business, there are many advantages to investing in franchising.

The five must-know truths about franchising

If you’re an ambitious entrepreneur thinking of starting a business, there are many advantages to investing in franchising. Not least the fact that you’re buying into a proven, tried and tested model. Franchising is much less risky with vastly higher chances of success.

Did you know that according to the BFA / NatWest Franchise survey, conducted in December 2018, 93 per cent of UK franchises surveyed claimed to be profitable? And fewer than one per cent closed due to commercial failure? 

These are reassuring statistics for those who dream of business ownership. Particularly at a time of continuing uncertainty, with the UK’s future trading relationship with Europe hanging in the balance and the Coronavirus wreaking increasing havoc all over the world.

However, franchising is not suitable for everyone, so what do you need to know about this way of doing business before taking the plunge? Here’s five must-know truths:

  1. You need to do your research:

    Starting a franchise can be very exciting and you do not necessarily need to have any experience in your chosen industry, but have you thoroughly researched the sector? You’ll want to understand the state of the market and its challenges before investing, as well as emerging trends or issues that may affect the business.

However, often what’s most important to franchisors is that you are passionate about the industry they operate in. Indeed, this may even be a qualifying criterion to being accepted! This is certainly true of our business.

  1. It’s hard work:

    Starting a franchise is different to starting a regular business, but it is still a business. You will need to invest a lot of time and energy to get things up and running, manage your team, build a customer base, create a strong internal culture and develop strategies to achieve success.

Any franchisor worth its salt will provide a great deal of support including help with securing funding, finding a location and providing comprehensive training. Ultimately though, the buck stops with you. Are you ready to show the dedication needed to make your investment pay off and build a business you can be proud of? 

  1. You’ll need to operate within the brand’s
    parameters:

    Franchising is all about buying into an established brand. Although you own, run and lead the business, you are still answerable to the franchisor and legally obligated to follow its rules. These include everything from using approved suppliers and approved products to branding and messaging. The aim is to and ensure consistency of branding, product and service across the franchise network. 

Are you happy to work to work to somebody else’s business model? Or are you of the ilk that prefers complete control and the freedom to do things your own way, all the time? If you are the former you will thrive in franchising, if you are the latter then franchising may not be a good fit. 

This said, many innovative franchisors encourage their franchisees to develop your own identity whilst staying true to the brand. For instance, could you create your own employee reward scheme? Or choose to support good causes within your local community that are exclusive to you, but still relevant to the brand?

  1. It
    isn’t always possible to make a profit straightaway:

Like any business, there are upfront costs and overheads to think of such as office equipment, rent, payroll and utilities. But if you wish to join a franchise family you will need to set aside funds to buy into the business and monthly fees payable to the franchisor. 

Most franchisors will also insist you have certain amount of working capital before accepting your application. This is to ensure that you have adequate funds to establish and run the business initially, as well as cover any unforeseen expenses.

What this means is that it isn’t always possible to make a profit straight away. Although your franchisor should provide some robust advice in this area, have you developed a comprehensive business plan? This should contain in-depth market analysis along with forecasts to help you predict when the business will turn a profit.

  1. Local
    promotion can be critical:

    As part of a franchise network, you will immediately benefit from an established national reputation and national marketing campaigns undertaken by the franchisor. But have you thought how you will promote your business locally? For most franchise systems, this is essential for generating a good customer base and raising awareness of your business.

Do you have the necessary experience and time to do this job effectively? If not, hiring an agency or a marketing manager who can hit the ground running may be the best decision.

If you’re going to do it yourself start by drafting a comprehensive marketing plan, which should detail all the tactics you intend to use and when. Tactics include everything from traditional advertising and online marketing to public relations and social media promotion.

Ultimately, if you are the right kind of person and are prepared to work hard then you can be enormously successful in the franchise business.

We are incredibly proud of our own network, which we see as one big family. We only work with people who share the same values for providing the highest standards of care and want to make a difference to other people’s lives.

If you decide to start your own franchise business, I’d like to bid you a warm welcome and wish the best of luck!

ABOUT THE AUTHOR
David Glover
David Glover
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