With over 1,300 franchise opportunities available in the UK, selecting the right franchise can be a daunting task. Tiffany Brooking reveals how to choose the right franchise for you.
Finding The Right Franchise For You
Deciding to leave the security of salary-paid job and start your own business will be one of the biggest decisions you’ll ever make so you need to be sure that the move is worth the risk and is right for you.
First of all, you need to identify which sector you would like to start your business in. One of the major benefits of joining a franchised business is that you receive all of the training and support needed to get your business off the ground. However, if you do not possess the passion and drive for your new venture it will soon show and your business will suffer – so joining a franchise you have a genuine interest in is essential when making your decision.
Once you have identified your chosen sector you then need to thoroughly research it by reading printed franchise publications and scouring the internet. By using these resources you will be able to create a shortlist of some of the most important and genuine business format franchises that appeal to you. A good franchise should have:
- A proven business history
- Documented systems
- Effective training
- Security of tenure
- Ongoing support structure
A big factor to consider when selecting a franchise is your budget – a franchise is an investment not a job – you therefore need to determine exactly how much you need to invest and most importantly how much you’ve actually got.
There is no point taking on a business that will only generate half of what you need. Also beware of over extending yourself – be sure you can raise the funding and make the repayments through the business.
Some high street banks now have dedicated franchise departments, which assist potential franchise owners with securing franchise funding – always seek professional financial advice before signing on the dotted line.
Hopefully by now you would have found a number of franchise companies who have successfully met your budget and criteria – now you need to judge and compare each opportunity.
Check with the British Franchise Association (bfa), Companies House, franchise publications and ask yourself:
- Is your preferred franchisor the largest operator in its sector?
- Are they an insignificant newcomer but with a brilliant new slant?
- Do they offer the best package to you as a customer?
- How often does a consumer buy the product or service?
- Do the products or services enjoy repeat business?
- What is the typical value of a sale – and the typical profit?
- How many customers would you need to meet your minimum business projections?
- Does this franchisor seem profitable?
- Does this franchisor offer the best potential for growth?
Most reputable franchisors will be open and honest about their offering, allowing you to speak with existing franchise owners – an excellent opportunity for you to gauge the success of the business and obtain a genuine insight into the day-to-day role of a franchise owner.
If a franchisor refuses to let you contact existing franchise owners or only provides a list of a select few – be wary.
Key questions to ask current franchise owners:
- Are you making money?
- Are you working long hours?
- Do you get on with the other franchise owners?
- Has the business affected your family life?
- Does the franchisor offer good support?
- Do you enjoy the business?
- Is the business giving you what you expected when you first came on board?
- Is your family still supportive?
- If you knew what you know now would you still have joined the franchise?
It is imperative that you take professional advice when thinking of buying into a franchise business. A qualified professional adviser will assist you in understanding the small print to assess the opportunity and to prepare a business plan.
The Franchise Agreement is a legal document and a specialised area so seek a Solicitor with proven experience in franchising.
A good Accountant can advise on how to set the business up, tax implications, business planning etc.
When you are 100 per cent satisfied in relation to all areas, there is no reason why you should no proceed and realise your ambition of becoming a successful franchise owners.
The UK Franchise Directory provides a free franchise matching service - click here to follow the four simple steps and start receiving further information on opportunities that match your criteria.