Like many, before becoming involved in the world of franchising, I didn’t appreciate how many brands were franchise brands and with more and more new businesses starting to franchise each year how do you choose the right franchise for you? All offer you the freedom of “being your own boss” in a “fast growing industry” with “huge market potential” and “high profit margins” but is it all just marketing spiel?
When choosing a franchise, it is just as important to look critically at yourself as well as the franchisor. So, let’s start with You.
Sector & Passion
- Which franchise will be right for you will depend on your passion, your likes and dislikes. Do you like working outdoors? Do you like working with animals, children, the elderly? It is important to choose a sector that you actually like or enjoy. Building a successful franchised business takes time and effort so you need to choose something that you are passionate about.
Level of commitment
- Are you looking for a flexible opportunity that you can fit around your family or lifestyle or are you looking for a full-time opportunity? Whilst all businesses require some level of out of hours involvement and running your own business often means you are on the go 24/7, some businesses are more round the clock than others and this ought to be a consideration from the start.
Level of investment
- This varies significantly and really depends on what you have, can afford and are prepared to invest. Don’t forget – this is not just about the initial costs and fees but there will inevitably be other expenses, as well as the lack of salary until such point as your business breaks even, which can often be in year 2 or 3 depending on the type of business and the effort you put in. So make sure you don’t just look at the price on the “box” but take into account the working capital as well as any minimum income that you or your family need!
Once you are happy that you know your own requirements, then it’s time to start looking at franchisors. There is plenty of information available out there both on different franchise brands as well as the sector generally. Go to exhibitions, research online, attend discovery days (many franchisors offer these both virtually and face to face). The British Franchise Association (BFA) has plenty of useful materials and offers seminars for prospective franchisees. Whilst doing your research consider the following:
Established v New
- How long has the franchisor been operating in the UK? Just because they are a new business, doesn’t mean that you should dismiss it but new business means the risk is higher. If the business is new, is it operating anywhere else in the world or is it a completely new concept? There are, of course, opportunities connected with investing in a new business – you may get a discount if you are one of the first or there may be an opportunity to be more involved in shaping the future of the brand, as long as you understand the risks and choose to do so.
Speak to franchisees
- Speak to as many franchisees as you can and not just a handful that the franchisor recommends to you. Remember, this is a network you could be joining! What do they have to say about the franchisor, about the business, about their experiences?
Is the franchisor a BFA member?
- Being a BFA member is a sign of commitment to upholding certain standards and principles of ethical franchising. To become a member, franchisors have to go through an accreditation process and once they are a member, a re-accreditation so it is worth asking when they became a member and when they were reaccredited. And if a franchisor is not a member then why not? There may well be a good reason for it but it is worth asking the question.
Questions to ask
- How is the franchisor investing or reinvesting into the business? What does their support structure look like? How many of their first franchisees are still operating today? How did the franchisor support their network during the pandemic? Have there been any significant changes at the franchisor in the past 18-24 months? Has the franchisor been in the news – positive & negative? Is the franchisor suddenly offering a heavily discounted fee?
Get a franchise agreement review from a specialist franchise lawyer
- Most franchise solicitors offer a fixed fee service where they provide a report highlighting any provisions which are unusual, unfair or unworkable. Typically, the agreement tends to be reflective of what you can expect – is the agreement well written and easy to follow or is it unduly complex and long?
In conclusion, whether franchising and which franchise is right for you will depend on you, your preferences, your risk appetite and, to an extent, your goals and what you are looking to achieve. As for franchisors, there is a lot of choice out there and something for everyone. What you can do is give yourself the best start by doing as much research as you can, getting expert advice along the way and trusting your instincts!