So you’re thinking of buying a franchise? There’s a common misconception a franchise is a ‘business in a box’ anyone can just pick up and run but that couldn’t be further from the truth. It’s not easy being a franchisee and it’s certainly not the right decision for everyone. Taking on a franchise should be thought about cautiously.
So before you tell your boss to stick their job, here’s what the franchisor doesn’t tell you when you invest in a franchise.
It’s not a safe bet or an easy win
You’ve got the support network and a big book that tells you what you’re supposed to do – advantages you’ll enjoy as a franchisee that a standalone startup won’t. The franchisor will support you as best they can and the ops manual is there to help you but no one can make your business a success except you. If you’re investing in a franchise to buy yourself a job for a few years, you’re setting yourself up to fail. The work you put in will directly correlate to what you get out of it.”
It might be a proven business model but that’s no guarantee it’ll work for you. It puts you in a stronger starting place than many non-franchising enterprises but the rest is down to you. If it doesn’t work, you won’t get paid and might not even be able to pay your staff anymore, let alone yourself. It’s as simple as that.”
You must be willing to follow the franchisor’s operations manual, adhere to their brand guidelines and ensure customer service is king. The franchisor will be monitoring you and if they feel you’re causing issues for their brand through bad management or poor customer service, then even more pressure will come your way. You have an established reputation to maintain and uphold not just for your own sake but also for other businesses in the network.
Your family needs to be as on board as you
Buying a franchise is only the very beginning: you’ll have to run the business profitably, work long hours, make difficult decisions and overcome issues. Say goodbye to weekends and bank holidays and be prepared for quality time with your family to be in short supply.
It will never be all plain sailing, either. In any business, some stress is normal and can help push you to do something new or difficult but too much can take its toll, physically and psychologically.
As your family will bear the impact of this, ensure they’re prepared and happy with your decision otherwise the commitment involved will undoubtedly cause issues down the line.
You really can’t just blag it
Do you have experience of running your own business? Do you know what running a franchise model really means and what it might involve on a daily basis? If not, my biggest tip would be to join some business management classes to see if you have the skills to cope.
Don’t assume technical knowledge alone will make business success. You’ll need to study and learn new skills to wear the wide variety of different hats your business will need – sales, marketing, HR and accounts are just a few to start with.
Ask your franchisor what you want to know, so there are no surprises after starting. Franchise recruitment is expensive and time-consuming, so a franchisor would rather you address any potential issues as early as you can.
Talk to current franchisees and find out their day-to-day and experiences. See if their feedback corresponds with your expectations. Do your due diligence and find out about competitors, customers and the marketplace.
To get off the ground, make sure your finances are in order and be prepared to borrow
Most franchisors expect around 30% of initial capital, so it’s likely you’ll need to save and get a loan. Some firms specialise in financing franchisees but you’ll need to be in a good place to apply for funding. You’ll also need capital to cover everything from licencing agreements, rent, premises and vehicle leases – which usually require a few months upfront – right down to biros and the payroll. Sit down and do the maths first and be honest about the numbers from the start.
The amount you take home monthly is dependent on the success of your business. That’s a big responsibility and change if you’re accustomed to a regular income through employment – again, ensure your family are prepared for this risk.
Choose a franchise that fits your needs and lifestyle
Do you want to be hands-on or do you have the skills to manage others? Do you really want a shop or would van-based and mobile suit you better? Maybe you struggle with motivation when working from home. Maybe being outside in heavy rain doesn’t bother you in the slightest. It doesn’t matter what your preference is, just make sure you choose a franchise that fits with that.
The franchisor will support you but the buck stops with you
You should only sign a franchise agreement if you’re willing to really throw yourself into making the business a success. Half-hearted is no good.
If you think you’ll run out of steam in 12 months, then it’s probably not the franchise for you. No one is claiming buying and running a franchise is easy. To get the most from it, you have to be prepared to commit and work hard – but then you can really reap the rewards. And there are a lot of rewards.
With the right franchisor and network, with a great product or service that you truly have an interest in and the right attitude, franchising is a brilliant career choice.”