Is now the time to finally cut free and start to run your own business?
It’s December. the end of the year is nigh and traditionally it’s a time to reflect on the year gone by. So how was 2022 for you? What were the highs? Or was it more lows? Did that promotion come off? Did you get your salary increase? Did you manage to attend all your children’s plays or sporting events you wanted to? Or was it all a bit ‘same old, same old’ and you’re feeling as if you’re simply going through the motions?
Facts
Here’s a quick test, do any of these ring true for you? You feel as if you have no control over your life? You aren’t spending enough time with your children and family? You have a sense of ‘is this it?’ You don’t feel you are getting out of your job what you put in? You’d like to run your own business? You want a change but you’re not sure what to do?
Could franchising rescue your 2023?
If you’re feeling any of the above, don’t worry, you’re not alone. Over the years we’ve spoken to hundreds of franchisees, former HGV drivers, managers, police officers, soldiers, social workers, teachers, accountants, mortgage brokers and everyone in between, who felt exactly the same as you, all wanting to become self-employed, regain control of their lives and build a successful business to support them and their families. Similarly, many of them didn’t know how to make the step into self-employment or indeed, what to do.
Franchising suits many people who have the desire to succeed, but who aren’t tied to following one particular passion or sector. Although they are clear about their likes and dislikes, generally they’re happy to look at a variety of business models and choose one that suits them and their business goals.
Here’s our very quick (and broad) guide to buying a franchise:
What is a franchise?
In very simple terms, a franchise starts life as a normal, successful business. So successful that the owners thought, ‘I bet if I showed someone how to do this, they could replicate my success.’ And so, a franchise is born.
What am I buying?
You are buying the rights to run your own exclusive territory of that business. You are also buying the reputation already built around the brand, something that takes years to create. Your franchisor will train and support you to make a great success of your new business. Make sure you do your homework and choose a franchise with a record of success and support.
What will I get for my money?
This question differs from franchise to franchise but generally, as a bare minimum, you should receive your own exclusive territory, full training, access to the operations manual, a page on the main website and access to all the marketing materials, systems etc. Make sure you have the franchise agreement checked by a specialist franchise solicitor before you sign, to make sure it is fair and in your favour.
How much does it cost to buy a franchise?
With franchises starting at under £10,000 and going up to over £250,000 that’s hard to say. You’ll pay an initial franchisee fee for your territory, then an ongoing monthly fee which will either be fixed or based on your turnover. Many franchisors will waive the monthly fee for the first few months as you get started.
What other costs will there be?
You’ll need enough liquid capital to support yourself until your franchise becomes profitable, unless it is a resale of an existing business, with an existing income stream. You’ll usually need to buy or lease your van, pay for your own local marketing and pay for an accountant or bookkeeper. Your franchisor will get you started but then it’s up to you.
Can I get a loan to buy a franchise?
Banks are usually happy to lend money to someone wanting to buy a franchise, because of their historically low failure rate. Some brands are even ‘pre-approved’ for loans at national high street banks.
Can I sell my franchise?
Of course. If you decide to sell your business at some point, you could do quite well. Franchises are known to get a much better resale price than start up’s because they’re part of a recognised brand. Franchisees sometimes sell to a franchisee in a neighbouring territory, so they can expand their business.
How long does it take to buy a franchise?
Any decent franchisor is going to want multiple meetings with you to make sure you are a good fit for their business. Remember, the very last thing they want is for you to fail. It’s bad for their reputation, which in turn is bad for franchisee recruitment, so they are interviewing you as much as you are interviewing them.
You’ll need to attend a Discovery Day and present business plans. Assuming the finances are in place and depending on the size, three to six months is a realistic timeframe for most franchises. Once the agreement is signed, you’ll do your training and be ready to start your new business.
The gift you can’t return – so think carefully!
Buying a franchise isn’t buying a job. You’re buying a fledgling business that you’re going to have to work very hard to build up, the only difference is you’ll have the full support of your franchisor as you do it. They’ll be there to teach you every trick in the trade, to save you wasting time and money. Listen to them. The biggest failure rate comes from franchisees who refuse to listen to their franchisor…so unlike a pair of socks, this is one Christmas gift you can’t simply return if you don’t like it; think carefully, do your research, and always take specialist franchise legal advice.
New year – new franchise?
If all goes well you could be running your very own business next year, working hard to support yourself and your family, whilst having total control over your working life. Good luck!
