A brief overview of the strengths and weaknesses of being a franchisee
Like any business venture, becoming part of an established franchise network has its advantages and disadvantages. On the one hand you give up some of your independence but, on the other, gain the support and assistance of a prosperous well-oiled machine which may have been operating successfully for many decades.
This feature will hopefully shed a little light on the pros and cons of this specialised sector of the economy. It is a sector quite often overlooked and undervalued, but plays a significant role within the business community.
The Pros
On a general level, franchising can provide a business partner with a rewarding and profitable career, and it is much safer than being a regular start-up. Those signing-up will benefit from building a business that already enjoys a strong brand reputation. This provides great security, plus a tried and tested business model.
With it comes training, ongoing support and assistance from the franchisor. Your franchisor will also help you find and retain customers, along with searching for business premises – depending on the nature of the operation. The level of assistance may vary depending on fees, with some companies employing 24/7 helplines.
By signing up to a particular territory, your franchisor should provide you with a sizeable, dedicated area, large enough to give you a comfortable annual income. Franchisors will determine the best demographic areas for their particular branded products.
As a franchisee, you will enjoy greater access to finance, than being an independent start-up. Banks always look more favourably on businesses that are part of a successful franchise network, than those entrepreneurs who are starting independently from scratch. The increased security and reliability of a large network, with its long-established business model, will help you to secure the loan you need.
The Cons
When taking on the name of a tried and trusted brand, there is always a price to pay. Fees are the foundation on which all franchising agreements are built. These fees cover the rights to use the brand logo and name, and will cover the cost of training, start-up materials, marketing support and more.
Some franchisors will insist on their business partners having significant working capital available before accepting them as a possible new franchisee. Agreements do vary from business to business. Franchisors may take a percentage of your takings. These are deducted from your turnover, not profit. There are also royalty fees or management service fees.
You may also have to pay another sizeable fee to extend the length of the agreement, for perhaps another five or 10 years. And this may even be refused if you are not meeting the strict targets as laid down in the agreement. All prospective business partners need to compare the costs of joining a franchise, with starting up on their own. This is the key to understanding whether a franchise opportunity is the right one for you.
Once you are accepted as a franchisee, you need to adopt the system as laid down by the franchisor. It’s their way, not yours. This will help you to become established, but may end up restricting any individuality later on. Your plans for the future may not mirror the agreement you signed, and the penalties for ignoring the franchisor’s strict model can be tough. Franchise agreements may stipulate that any wild deviation from the model will lead to the termination of the deal.
Finally, you will still be required to work hard – especially early on. Although much of the work has already been done for you, you won’t be able to just sit back and watch the money roll in. When establishing your business, it is not uncommon to work around 60 hours each week.
Flexible Lifestyle
Having a good work/life balance is usually the reason people enter the world of franchising. The aim is to spend more time with your family, enjoying your hobbies, while earning a solid income. Working for yourself allows you to structure your routine, and therefore helps create a flexible lifestyle. Becoming self-employed remains the dream for many people.
In order to find that ideal business venture, requires some serious research and honest assessment. It’s always beneficial to utilise already acquired skillsets, to work alongside those provided by the head office team employed by the franchisor.
And when you do decide on your franchise of choice, you must satisfy the following criteria: You must be prepared to become a dedicated member of a network. You may require advice from fellow franchisees from time to time and, on occasions, be prepared to offer your own knowledge and experience to others. You must be happy to promote the products or services of the brand to friends and family.
There are many franchises to choose from, so anyone determined to become their own boss shouldn’t be left disappointed. At the end of the day, you must make certain the franchise delivers what you want, with regards to income and work/life balance.
Hopefully, you will be able to use a high percentage of the skills you already possess. Selecting a franchise which already has good national coverage will help you to establish your business quickly. And, most importantly, always follow the structure and model laid down for you by the franchisor.
This feature was brought to you courtesy of Shuttercraft, a management franchise which specialises in high-quality interior shutters and blinds. It has provided top-class window treatment services across the UK for the past 19 years.
