How to choose the right franchise for you |
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| Introduction |
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| Net Lawman provides a number of articles on franchising. The first focuses on franchising in general, what it is and how it works. Each of the other focuses on a specific issue such as legal matters. Links to these articles are at the end of this one. |
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| This article will be useful reading for anyone thinking about buying a franchise as well as business owners who want to franchise their business. |
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| When considering whether to buy a franchise, or even which to buy, you should think about you as well as the franchise. The franchise you choose should reflect your skills and experiences. Franchising doesn’t suit everyone because it requires a willingness to want to work in someone else’s system without requiring change. |
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| It requires management capability, dedication, and the ability to abide by guidelines. It does not require a technical understanding of the business – so much so that in some areas, a technical background is viewed negatively. For example, it would be blasphemy in the eyes of a chef to run a fast food outlet. |
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| First we consider your attributes, and then we consider which franchises fit with each personality. |
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| Your experience |
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| First, identify your skills and experience. For example, if you have worked in coffee shops most of your life, you are likely to know how they run and what makes the customers tick. You will have customer service skills and could therefore consider any food and beverage outlets. |
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| However, if you have worked as a computer coder, you may be better suited (of course this is a generalisation) to something else. Have you managed staff before? Have you been involved in administration? Most franchise systems require much paperwork and ‘after hours’ work, so this skill is essential. |
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| Where would you like to work? |
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- In a retail shop?
- In an office?
- On your own?
- What do you enjoy doing?
- Talking on the phone;
- Send emailing messages;
- Working with your hands on practical tasks;
- Driving.
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| You should also be aware of: |
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- The financial commitments you have and the amount of money you are able to spare. Starting a franchise carries less risk than starting on your own but that’s not to say it’s a “sure thing”. Additionally, cash flow can be low in the first few months so consider whether you have enough back up money. If you need to postpone for 6 months, do so;
- Can your partner support you – we ask this on a financial and emotional level. You will both have concerns and issues and of course you must be prepared to share them and the success;
- How is your family life? Would it matter if you had to come home and complete paperwork until 9pm? What about if you had to start work early in the morning?
- How many extra hours are you prepared to put in? At the beginning, the franchise will need much input by you. You could of course employ someone to manage it at a later date but at the start, it will require your blood;
- Do you want to “run your own show” If so, maybe franchising is not for you. You will have strict guidelines to follow and you will be told how best to run the business;
- How much support do you need? How much support will the franchisor give you? If you need more, but the franchisor wants to give less, you may come unstuck;
- How are you with doing the dirty work yourself?
- Have you had frequent changes in jobs? If yes, are you sure that franchising is something you really want to commit yourself to and that you aren't just looking for yet another change? On the other hand, if you haven't moved jobs a few times in your career, are you sure that you are suited to the different lifestyle, which you may face?
- What are your feelings on job security? Some people like a lot of job security, whilst for others this is not important.
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| The franchise for you |
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| Research the market |
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| Speak to trade associations for the business type to find out more about the market. Use the Internet to research the business. Understand what that business actually does and the market in which it operates and don’t just be blinded about “your own business”. Additionally, consider the economy and the ‘elasticity’ of the goods. If the economy is booming, electrical goods, and products at a health retreat may sell well. However, as soon as the market drops, people will have less money to spend on the latest widescreen television or deluxe pedicures. Can you survive? Food on the other hand, will always sell – demand is inelastic, meaning that people will always need it, no matter if they are rich or poor. |
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| Research the franchise |
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| Speak to current franchisees. It is often set up so that you will do this without having to arrange it yourself. Of course not every franchisee will want to talk to you, but try to find a few a) outside those provided to you and b) some with similar backgrounds other than the ones you are given. Research the franchisor too – they will be researching you! What is his background? How has the business grown? Have they lost any franchisees? Evaluate the support, the value in the costs and the nature of the agreement. |
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| Be sure |
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| Take your time. Make sure that the short listed companies have been compared against a standard benchmark. Seek advice from friends and relatives as well as professional advice from banks, solicitors and accountants. If you are unsure then you haven’t researched enough. |
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| Legal aspects of franchising |
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| Franchising ethics: The British Franchising Association |
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| Franchising introduction |
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