Cathryn Hayes, franchise director at Revive!, recommends a pragmatic approach to choosing a franchise
When is the right time to buy a franchise? And how do you make sure you choose the right one? It can be a confusing time, so the best thing to do is to take things step by step as you find out more.
Before you do anything else, spend some time thinking about what you want to achieve and how you want to spend your time. The beauty of franchising is that you don’t have to pick a business where you have experience and skills - you can consider a complete change of career, with training and support provided by the franchisor.
Identify your priorities
What are your priorities for this change of direction? Do you want to slow down a bit and improve your work-life balance or grow a business, building an asset to secure your future? Perhaps you want to move into a more caring profession, using your existing skills to help people?
Be honest with yourself throughout this stage. Not everyone is cut out to be in business for themselves and although franchising reduces the risks and provides support, you’ll still need to work hard to make your franchise a success.
As with any life changing decision, there are so many factors to consider, but the main one must be, what do you want your franchise to look like in not just one year but five or 10?
Explore franchising in depth to get a better idea of what sort of opportunities are available. There is such a wide range of industry sectors and types of businesses represented in franchising, there really is something for everyone.
There are home-based owner operator franchises in children’s activities, pet care, delivery, mobile sales, car repairs and cleaning, while office/premises-based franchises cover property letting, sign making, retail and, of course, food franchises. You can employ staff or be more hands-on, depending on the franchise operation.
Understand what makes a good franchise. Start with the British Franchise Association website, where you can explore the directory of members, as well as go through its online Prospect Franchisee Certificate to add to your knowledge.
Visit some franchise exhibitions and attend educational seminars on franchising and you will start to see the differences with stronger, well established franchises that offer great support.
Produce a shortlist
Now you can start to narrow things down, decide what you want to do and choose a sector that you’re interested in. Make sure this industry can offer what you’re looking for.
Once you’ve decided on the sector you want to move into, make a list of the franchises offering this type of business, arrange to visit at least a couple to compare their set up and meet the key people involved before you choose.
Be aware that they will also be vetting you, as they should only want the right potential franchisees to join their brand.
At this stage, things need to get serious. Specific research into your chosen franchise needs to be thoroughly undertaken. Again, look at the resources available on the bfa website, where there is a list of questions to ask a franchisor. Get a copy of the franchise contract and have that vetted by a specialist franchise solicitor, so that you understand exactly what it involves.
Speak to existing franchisees and ask them about their experience of running the franchise. What can they tell you about the support offered by the franchisor, especially in the early days? Can they give you any tips about what they found challenging and how much help they received from the franchisor to overcome these issues? What are the key issues to look out for as the business grows?
Examine your finances in detail and do your business plan. You’ll need to be realistic in your projections and look closely at your personal financial needs, including how much you’ll need to take out the business.
It’s important to have adequate funding for the franchise right from the outset, as being short of cash will hold back your growth and could lead to the business not being able to meet its commitments.
At this stage, it’s a good idea to take stock. Have you got all the information you need from your chosen franchisor? Is it still answering your questions and helping you plan and research? Having reservations or concerns is quite normal when you’re undertaking such a major change in your life, but don’t ignore nagging doubts about your franchisor and the support it’s offering.
The support of professionals can help overcome these worries and by now you should have spoken to a lawyer about the agreement, an accountant about the financials and your bank to open business accounts and arrange a loan, if needed.
Once you’ve signed your contract, arranged your finance and agreed the start date, you’ll be on your way to running your franchise. You’ll start your training and your franchisor should help you to launch your business, ensuring you get off to a strong start.
Remember, you’ll need to give your full time and commitment to making the franchise a success, as you’re not ‘buying a job’. And you have paid the franchise fee for the proven operating system, so make sure you follow it and don’t try and reinvent things at the outset.
Franchising offers lots of benefits compared to going it alone and it’s certainly worth exploring before either taking the plunge into selfemployment or ruling out having a business of your own due to the risks.