Complete these key steps for franchise success, Pip Wilkins, chief executive of the British Franchise Association, says
You’ve discovered a franchise concept that promises you the opportunity to be your own boss. You’ve started to look into the options available to you in the franchising sector. You may be tempted to spend hours looking through prospectuses and website directories without any guidance on what to look for.
Before you do that, there are some simple but key steps you can complete at this early stage to prepare yourself for the responsibilities of owning and running your own franchise business.
It’s worth taking the time now to make sure you choose the right business and that you’re prepared for the responsibilities and hard work ahead.
Know yourself and what you’re good at
Your first step should be taking the time to consider what you bring to the table. Franchising thrives through the sharing of transferable skills - a good franchisor will offer significant initial and ongoing training to help you build your business.
Are you good at sales, administration and business growth? Do you prefer getting hands-on within your business through networking, marketing and people management? Knowing whether you’re best suited to work in your franchise or on it is the second step when choosing the best opportunity for you.
Thinking carefully about the above. Choosing the proposition that complements your skills and provides support for your weaknesses will substantially increase your chances of success.
How much can you afford to spend?
Now you know what you’re best at, it’s time to work out what you can afford. Franchise fees can range from a few thousand pounds to hundreds of thousands across a range of industries. To avoid wasting your valuable time, familiarise yourself with the ceiling of your liquid capital, along with any funding you can access. Then consider the other funding options that can considerably increase this figure.
Banks like the franchising model, as they can access details of the trading history from existing franchisees. Bank funding is by far the most popular choice for alternative funding. Other sources include family and even the franchisor - a few of which, for the right franchisee, will finance the cost of starting up over a period of time.
British Franchise Association member franchises are looked upon favourably by the major banks, because they understand the strict criteria involved in gaining bfa membership, which includes proof of the financial sustainability to support a network and evidence of previous franchisee success.
For franchisees of such reputable, ethical franchisors, banks will typically lend up to 50-70 per cent of the start-up cost, depending on how long they’ve been trading.
How will it impact your life?
Running a franchise is a commitment that affects your whole family. Therefore, you must take your personal life and family circumstances into consideration.
Many franchisors will invite your partner to prospect meetings with you. Their support will be invaluable when you take the leap into self-employment and many franchisors would like to see that you have it.
In the early days, some franchises may require working hours longer than 9-5, while other models are designed to appeal to parents from the start.
Before you commit, make sure you’re capable and willing to keep up with the business demands and that you know you can do so alongside other commitments.
To save yourself hours of searching online and through franchise prospectuses, there’s plenty in the above for you to consider. Narrowing the pool to what suits you best provides you with the best chance possible for success as a franchisee.