There is risk attached to becoming a franchisee, despite franchise businesses having a low failure rate
According to the 2018 British Franchise Association NatWest survey, 93 per cent of franchisees are profitable and while statistics show that around half of all non-franchised start-ups fail within five years, the bfa survey also revealed a failure rate among franchises of just two per cent.
As stated by NatWest in its survey report, it’s unsurprising that banks in the UK have typically favoured lending to franchised businesses over standalone start-ups. Franchised businesses benefit from an established brand name and a proven system, so are therefore much less likely to fail.
Research is vital
However, this doesn’t mean all franchises will be successful and it’s important that before you part with any money you make sure you’ve done your research.
Franchising provides a structure of training, support and know-how to help increase your chances of success provided, of course, you pick the right one. But whether this model will work for you depends on your ambitions, skills and personality as much as anything else.
With over 900 franchise systems operating in the UK across almost every business sector, there are plenty to choose from. Most franchisors are not looking for previous industry experience, so there’s scope for a complete change of career, as you don’t have to stick with what you know.
Prospect Franchisee Certificate
To help you consider some of the aspects you might not have thought about, the bfa has a free training course, called the Prospect Franchisee Certificate, which you can work through at your own pace. Visit bfa.trainme.tv for more information.
You’ll need to look at investment levels and be realistic about how much capital you can invest and how much income you’ll need in the early days of the business.
Once you’ve chosen the sector you want to work in and narrowed down the franchises that interest you, speak to existing franchisees about their experience of running their business. You also need to establish how long the franchise has been operating and whether the brand has a successful track record. In addition, find out what initial and ongoing training and support franchisees receive.
Make sure you get your franchise agreement vetted by an experienced lawyer who specialises in franchising. Spend time looking at the location you’ll be operating from and get to understand more about your customer base.
It begins with you
There are many factors involved in growing a profitable franchise business, but the route to success will always begin with you. There are no guarantees. However, choosing the right franchise should give you the best possible chance of success.
So if owning your own business and taking control of your future is one of your goals, start looking at how you can make it happen with the help and support of a tried and tested franchise.
Cathryn Hayes is franchise director at Revive! Auto Innovations