Securing the right franchise is about research and matching your personal skill set and aspirations to the opportunity, industry expert Derrick Simpson says
Investing in the right franchise is not as straightforward as it may at first seem. It is easy to be swayed in one direction or another by the dream presented by slick marketing or through making assumptions about particular brands. This latter point often occurs with well know international franchises - often food sector based. It is assumed a well promoted or ubiquitous brand is a passport to riches, only to discover this may not automatically be the case.
Searching for the dream opportunity and focusing on a restricted range of franchised options simply limits the potential of finding a franchised business that works for you. Over the past 26 years of involvement within the UK franchise sector, I have lost track of the number of times I have been asked at exhibitions, seminars or via our website: “What is the best franchise?” or: “What is the right franchise to buy?”
Generally, enquirers lump all franchised opportunities into one amorphous group of businesses. Generalisation such as this is as large a mistake as simply focusing on a single brand. The best franchise or the right franchise, like many other things in life, just doesn’t exist.
Let me give you a non-franchised example - the seagull. There is no such bird as a seagull. There are those largish white birds that can be seen flying around our coasts or occasionally further inland. Big white birds also flock around recycling facilities and the like, but none of them are seagulls - seagulls don’t exist.
These big white birds may be black-backed gulls, common gulls, black-headed gulls, herring gulls, terns or even kittiwakes, but not seagulls. Why, therefore, do we group them into one non-existent group? Probably, we do this because it is easy to do and possibly easier to understand - a form of shorthand. This does, however, have the ability to confuse and disguise the fact and detail. It is the same with franchises. Just like the non-existent birds we call seagulls, there is a vast array of differing options available within franchising.
Each franchised business is designed to provide a different opportunity. This is in terms of potential return on your investment and is also designed to draw on the specific skill set you have evolved during your life so far. Even within the same business sector, the detail of the businesses will differ. Some may have a businessto- consumer bias, while others, offering the same broad product range, are business-to-business based. Some franchised businesses could be described as job replacement opportunities and these would include single-unit man-and-van businesses. Others, offering multi-unit businesses, could be described as management or even investment opportunities.
The best franchise, therefore, is the one that most fits a prospective purchaser’s aspirations, needs and skills they have developed. Each person will have a different view of ‘best’. No one sector of individual franchised brand is best and personally I would strongly advise against simply buying into a franchised business because you like the product. It would also be a mistake to discount a business or sector without fully understanding the way it functions or the opportunities it provides.
There is a saying in business: “Never assume because it makes an ass of you and me,” - and for the most part this is true. Proceeding on guesswork or assumptions without fact checking only leads to mistakes, often costly ones. With that in mind, clearly to assume, based on hearsay or guesswork, that one franchised business or franchise sector is good or not is folly.
A prospective purchaser needs to see beyond recruitment hype or assumptions based on the brand and drill down to the nub of the business opportunity. A purchaser should compare the requirements of the business to their own particular and personal set of skills. They should see how much the business they are investigating can generate for them in terms of returns on the required investment. Whether it is home-based, a man-and-van business or a multi-site concept, it is still just as essential to carry out the research.
One of the easiest ways to obtain a good understanding of a franchise, how it performs, what is involved and how much money can be made from it is to investigate a franchise resale. Buying a franchise resale is something that was done by over 60 per cent of purchasers of franchises during the last two years, according to the British Franchise Association/NatWest survey of UK franchising.
With a franchise resale, you can see what it is you are getting. There are facts and figures, there is a business that can be touched, felt and investigated. There is cash flowing through the business, so the launch will be that much easier, as it’s already trading and known within the local marketplace or community. With a franchise resale, you are getting on a moving train - everything is running and all you have to do is grow it.
When a franchised business had been prepared for resale by an expert company, you are able to obtain a detailed overview of the business, including how it works, what has been achieved and where the development opportunities lie. Most importantly, you are able to look at a number of existing businesses, comparing and contrasting these until you find the one that fits your skill set. At Franchise Resales, we specialise in assisting buyers and sellers to achieve a successful sale and purchase of a business. Only specialising in franchising, we present a detailed prospectus of sale, so a prospective purchaser can see all the information they require to be able to investigate an opportunity.
Successfully securing the correct business for you is not about luck or finding the best one. It is about research and matching your personal skill set and aspirations to a franchised opportunity. To my mind, the best way to do this is with a franchise resale. So there is no best franchise or ideal franchised opportunity - only the one that is right for you. Just as there are no such birds as seagulls. MM