Mark Scott makes reference to the similarities involved in undertaking either of these two momentous actions.
In my opinion there are a lot of similarities between buying a house and purchasing a franchise. To start with, both are significant investments. Even though a house is a lot more expensive than a franchise, both purchases require in-depth research before signing on the dotted line.
With a house you may sometimes need to move quickly, should a great value property in a sought-after area suddenly appears on the market. However, with a franchise, this is not a situation you should ever find yourself in. And my advice is: Take as much time as you need to undertake all the background checks that are necessary before plunging into the world of franchising.
The first task to undertake is to check out all franchising options online. Researching a franchise is a lot easier now, than it was 35 years ago before the internet took hold. The best starting point is the British Franchise Association (BFA). This is franchising’s equivalent of Right Move or Zoopla. When you visit www.thebfa.org you will find a list of all accredited franchisors, with plenty of available information on each.
Then, similar to buying a house, you will need to contact your selected franchise to book an appointment with the owner, chief executive or top company official. Depending on where a company’s headquarters is, you may need to chat via Zoom or visit one of their online discovery days.
There is also the option of attending a franchising exhibition to speak in person with someone from that chosen franchise. Do bear in mind that franchisors treat exhibitions as a sales opportunity, so sometimes it’s best to meet up or chat at another time or place.
Being able to visit a company’s head office will enable you to meet other key staff who are employed to support franchisees along their journey. Meet as many members of their management team as you can: You wouldn’t view a house without entering and checking every single room for defects or mould, while also analysing potential areas for improvements.
After finding a franchise you would like to purchase, the next stage is to undertake due diligence. When buying a house you need to instruct a solicitor to undertake searches on the property, while hiring a surveyor to check out the physical state of the building.
Regarding franchising, always use a solicitor who has experience of this industry. You can find a list of accredited legal specialists on the BFA website. A good solicitor will inspect franchise documents in detail, and point out all your legal responsibilities, so you can investigate these issues further.
You should also talk to as many existing franchisees as you can. The franchisor should be happy to provide you with a list of these men and women. The number of franchisees on the list should tally identically with the figure provided by the franchisor, or perhaps highlighted on their website.
If these figures do not match, then the franchisor must offer a plausible explanation as to why. Is he or she attempting to prevent you from contacting a franchisee with whom they have fallen out!
Whether buying a house or a franchise, you will need available finance to do that. Depending on which of these two activities you are doing, you will probably have to visit your local bank to speak to a mortgage advisor or franchise manager.
If your bank refuses to deal with a particular franchise, or is certainly reluctant to do so, there is probably a good reason why. This means there may be a history of previous failures with this company. Therefore, my advice is not to sign up with this particular franchise.
Finally, whether it’s a house or a franchise, both will require serious attention over the years in order to turn either into your dream purchase. And you will have to work hard to achieve that.
