When you’re thinking of investing in a franchise, there are many things to consider, such as taking stock of your experience and transferrable skills or identifying which sectors most interest you. But once you’ve chosen the right industry for you, it’s time to make the most difficult decision: choosing a franchise. According to the bfa NatWest Survey 2015, there are over 930 franchise systems in the UK. Defining which franchise is the best investment is difficult with so much choice available.
Do your research
First, narrow down the field. Some brands you will dismiss instantly: this could be based on investment levels, the product, training, support or other reasons. When you have three or fewer contenders, it’s time to start some serious research. Google the business rather than just looking at the official company website and look beyond the first page of results. What else is on record about the business? Research the business owners and see what you can find out about them.
Feel out franchisees
Talking to franchisees is an important part of the discovery process. However, to get the most out of this discussion, do your preparation in advance. Write a list of basic questions around the training and ongoing support provided by the franchisor. Additionally, it’s worth creating some scenarios and asking the franchisee what would happen in these specific circumstances.
Create a comparison chart
Another critical step is to really interrogate what’s included within the franchise package. Some franchises will include all the equipment you need to run the business; with some others you will need to buy additional items. So add up the cost of these items and then compare the fees again. Also it’s also a good idea to ask for a schedule of training so you really can compare what’s included. If one training academy offers one week of training and another franchise has two, this speaks volumes and demonstrates they’re investing twice as much in their franchisees.
Listen to your gut
Lastly you should listen to your intuition: what feels right? Think about the people you would be working with: are you comfortable with them? Next, think about the softer elements of the business. What are the franchisor’s growth plans? How are they developing the franchise to take advantage of changing markets? If you’re going to buy a franchise, it should pass the smell test and intuition will often protect you from making a bad decision.
Given that you’ll be signing an agreement for five to ten years and committing a significant chunk of your life to the business, buying a franchise is a big decision. But follow these tips and you’ll be able to invest with confidence.