How do you go about finding a franchise that’s right for you? Mark Scott, Nat West’s head of franchising, has some useful advice for first-time franchisees
January is usually the time when new resolutions are made for the year ahead.
One of these resolutions may well be to begin a new career or start your own business. If it’s the latter, why not consider a franchise? The first place to start looking for options is the internet, specifically the British Franchise Association’s website.
The site has a full list of members who have been able to pass an accreditation process with three levels of membership: provisional, associate and full.
The first level is the provisional list, which in the main comprises of companies relatively new to franchising. In many cases, there may not be any existing franchisees and it’s just the core business to provide a basis for launching the concept and attaining accreditation.
The next level up is the associate list. Franchisors at this level will have provided the bfa with proof that a franchisee can operate the model successfully over a 12-month period and will have provided the bfa with a copy of the franchisee’s accounts.
The franchisor will usually be well into its second year of franchising before attaining this level.
The third level is full membership and is where the most established brands reside, such as McDonald’s, Subway and Domino’s. These businesses no longer need to recruit new franchisees to sustain their businesses and will have been trading at least five years as a franchise.
Visit an exhibition
You may also want to visit an exhibition, in which case earmark February and March 2018 and head to ExCeL and Olympia, respectively.
These events are useful for meeting the senior management of the franchise and gaining invaluable information about a number of different concepts in one location.
To find out more information, you can attend franchise seminars run by the bfa or NatWest, the latter having been sponsored by the bank for a number of years.
You should also:
- Take a critical look at your strengths and weakness. Do you have the capacity, temperament and skills to run your own business? Do you have the support of your family?
- Ensure you have sufficient capital. You’ll need at least a third of the startup costs - half for a less established franchise. NatWest can help with the rest, subject to the usual credit assessments.
- Obtain a full list of existing franchisees. Where possible, visit franchisees to ask how their businesses are performing and find out about the level of training and support.
- Research how well known the franchise and its services/product are. A good reputation is a head start in business.
- Look at the market as a whole. Find out who your competitors are on a national and local level and how strong their position is.