Everything you should do before buying a franchise. By Mel Fisher, founder of Business for Breakfast
I started Business for Breakfast in 2001, with the first breakfast meeting held in Manchester at the Worsley Park Marriott Hotel & Country Club.
Since then, the business network company has grown rapidly, with new referral marketing meetings opening across the region. With a proven business model, BforB soon accepted its first franchisee, rapidly adding a further 10 franchisees while expanding across the UK and internationally.
Identify what you want out of your franchise and set realistic financial expectations Having been on the front line while developing BforB as a successful franchise business, I’ve been able to help a wide range of potential franchisees understand what they’re looking to get out of a franchise.
During this time, I’ve refined my understanding around the vital considerations a franchisee needs to factor into a decision before buying a franchise.
A prospective franchisee should start with an in-depth and methodical period of research and preparation. It’s this preparation that will allow anyone interested in becoming a franchisee to fully understand the business opportunity and investment - of both time and money - required.
If you follow these seven steps during your preparation, you will be well on your way to identifying the right franchise for you:
Identify your skills
There are over 1,000 franchise concepts in the UK alone. You need to find one that closely fits your skills.
Should you decide to venture into a new and more lucrative franchise opportunity away from your core skills, look out for the product or service you would enjoy selling.
You will spend much of your time at work, especially in your first couple of years in business. I always believe your chance of success in business is much higher when you enjoy what you do.
Define your financial expectation
What motivates you? Is it money or are you looking for a lifestyle business to work around other commitments?
Franchise concepts offer a wide range of potential or actual earnings. Identify what you want out of your franchise and set realistic financial expectations. Then assess whether the franchises you’re considering match your expectations.
Ways of working
Are you a team player or do you work well under pressure on your own?
Running your own business will inevitably put you in situations where you need to work both independently and with other people.
What is the structure of the franchise you’re considering investing in? Are you going to be managing a team or working independently?
What interaction is there with other franchisees? These are all questions to ask a potential franchisor.
Location is key
The success of a franchise can be dependent on your local knowledge of the industry. There are territories in the UK that could be harder to develop than others. It’s therefore vital to consider where your franchise will be based as part of your research and planning.
Some say: “Never tell anybody what you’re going to do, just do it.” Others say: “Tell your family and friends about what you’re planning to do and listen to their feedback.”
Both are true in my experience. However, it’s always important to discuss your plans in detail with your partner. When you’re sharing financial responsibilities with another person, it’s important you secure the necessary support.
Can you follow the system?
Running a franchised business can be compared to implementing a series of tried and tested processes. Will you be able to do this?
There are franchisors that welcome innovators and radical thinking and usually adapt quickly. However, most successful franchised brands have gained their unique selling propositions because of the processes and systems they have put in place to deliver their product or service.
Entrepreneurs are naturally creative and innovative.
However, sticking to the system has its own merit. After all, a franchise is the process of replicating an already successful business model.
Investing your time
Having a good idea of what time you prefer to work can be helpful. Different franchisees will have different requirements in terms of when the work needs to be undertaken. Franchise concepts can be tailored from full-time to part-time or a work-around-yourfamily level of commitment.
On average, it takes about three months to find a franchise from enquiry to application.
This can be affected by the way you’re going to fund your new business. Allow additional time for securing bank funding.
Launch processes can also be affected by site availability for shops and delivery schedules for van-based franchises. Some businesses can be up and running in eight weeks and some in eight months. Factor this into your planning time.
Good luck in your venture and we hope to see you networking with BforB soon.