Nick Strong, managing director of Franchise Intelligence, reveals how to manage your journey to the best franchise for your future
In contrast to going it alone, starting your own business via the franchising route can remove much of the pain and reduce risk. Why is that?
Before a business can legitimately become a franchise, it must demonstrate the following attributes. It must be:
• Proven (not just a good idea).
• Profitable (able to demonstrate proven success).
• Operate in a sustainable market (not here today, gone tomorrow fad markets).
• Replicable (so others can copy what works and succeed by doing it).
• Protected (business systems and trademarks are unique and kept safe for licensed users).
• Continuously in development (always investing to be at the forefront of consumer trends).
• A source of training and support (so franchisees can trade for themselves, but not by themselves).
The above is critical because when a business franchises it’s offering supported self-employment. For this to be viable and reasonable, the franchise must be dependable and proven.
What are the pros and cons of going into a franchise as a start-up or investing in a resale?
• You work for yourself, but not by yourself.
• You have training and support from day one.
• You’re following a proven method that has commercial standing and good reputation.
• You’re part of a network, so can share and benefit from the ideas of others.
• You trade under a protected brand and business system.
On the downside, you must be prepared to follow and replicate the franchisor’s proven system. So if you want to develop your own ideas, franchising is not for you.
Also, be aware that if the brand suffers the whole network can suffer. For this reason, careful selection of the right franchise is important.
How do you choose the best franchise for your future?
There’s a franchise for every market and budget. Quick service restaurants are the most well known franchise concepts, however franchising can be found and is flourishing in a multitude of markets. How do you go about your own selection process?
First look at yourself. Analyse your motivation. Ask yourself: “Am I running away from something or am I moving towards something?”
This is an important question, as it deals with motivation. To be successful in business, your motivation must be right, which means having a positive reason to move forward.
What about the others?
If you have other people in your life who will be affected by your decision to start your own business, they need to be considered. This means open dialogue and agreement at the earliest stage.
There’s no point in applying for a franchise, only for your other half to say: “Over my dead body”. You need buy-in from those who matter to you right from the start and throughout the process.
Evaluate your strengths
• What are you good at?
• What are the areas you will need most support?
• What task will you do?
• What tasks won’t you do?
• What does a great day look like to you?
Write all this down and have it available to hand over to franchisors that are of interest to you. Business is ultimately about human to human, so make who you are clear and focused from the start.
What’s out there?
According to the British Franchise Association/NatWest franchise survey 2016, there are 900 franchise businesses in the UK that support over 45,000 locally trading franchisees. That’s lots of choice and you can only choose one.
Fortunately, there are specialist publications, websites, seminars and exhibitions every year where you can discover and read about genuine franchise choices. This is great, as it provides an oversight of what is available and creates awareness of choice and potential.
The main challenge is pinning down one option that’s right for you. How do you go about that?
• How much money you can raise and write it down.
• How much you, and your other half, are prepared to risk and write that down too.
• All the options you can find that you can afford (don’t be selective at this point).
• Highlight all the options that look interesting.
• 10 high potential options.
• How to apply for more information.
• The sort of response you get.
• Those that are prompt and show most interest in you.
As a rule, the way you are responded to in the early stages of the selection process will be a good indication of how you will be looked after going forward. Show interest in those that show interest in you.
Until this point it’s been all about you, the brand, the application and the response. What you now need to do is get under the skin of the franchises that look viable to you. For this there are a number of actions to take.
Firstly, speak to the franchisor and when you’re ready visit the franchise team. Make sure they’re a team you want to be part of. And don’t just believe what you’re told about the brand and its reputation.
We live in a world of online ratings and social media comment. This means you can check out the buzz around the brand for yourself at any stage of the selection process.
Making your mind up
When it all checks out, it’s time to see into the minds of others who have invested in the franchise. Make sure you obtain a full list of all existing franchisees and speak to a few. Ask them:
• Are you happy?
• Are you well supported?
• What did you find difficult when you started?
• What is the biggest factor in your success?
• Would you do it all again?
• Any tips for me at this stage?
You will get to the point where there is nowhere else to go but to decide. You will have to agree to either proceed or walk away. At this time, remember the first question you asked yourself: “Are you running away or moving forward?”
If you’re moving forward, you will stick with your conviction and take the bold step into your chosen route for self-employment. If you’re running away, you’ll probably take the easiest short-term option. Be true to yourself.
When I moderate discussions between franchisors and people considering franchising, I ask the question: “What are the most important factors that drive success in franchised self-employment?”
The response is always the same: “Enthusiasm in work, vehemently sticking to the proven system and building a delighted clientele through excellence in service provision.”
When you take on a franchise, you must be sure you can deliver these things.
There is risk in any business venture. The good news is that, according to the British Franchise Association/NatWest franchise survey, over 90 per cent of franchisees who took part in surveys over recent years trade profitably. This is a stark contrast of success compared to the huge failure rate of ‘go it alone’ first time entrepreneurs in the UK.
With those kind of odds, there’s good reason for optimism and everything to play for.