As someone who has been employed in a franchise organisation for the last eight years I now find myself on the other side of the fence as a franchisee having recently invested in The Last Hurdle Bristol.
Because of my experience of Franchising it was quite an easy decision for me to make but if you are thinking of going down this route you need to think very carefully about whether this is the right move for you. To ensure that you are going in to business with your eyes wide open you need to consider the following points. Here are 5 Things to Consider Before Buying a Franchise:
Do you want to be self- employed?
Being self- employed is hugely different to being a salaried employee. You are ultimately responsible for every aspect of your business from finding your customers, doing the work, raising the invoice and chasing for payment as well as keeping the required records and ensuring that you are up to date with the appropriate legislation. You will need the total support of those around you as initially you will spend a great deal of time in setting up the business and then growing it to a level where you can consider it to be a success. Ultimately the satisfaction and financial rewards will be well worth the effort.
What skills do you have?
Think about what type of business would suit you. What skills do you currently have? What are you good at? What do you enjoy doing? It is no good going in to a business doing something you do not enjoy. Equally it has to be ultimately profitable so this needs to be taken in to account too. There are many types of Franchises available, some demanding a more hands-on approach e.g. oven cleaning and garden maintenance and some being management franchises where labour and skills are bought in by the business owner who is responsible for working on the business rather than working in it.
What do you know about the Franchise you are considering purchasing?
This may seem obvious but not all franchises are the same. How successful are they? How long have they been established? How many franchises in the network? What support do they provide? What is expected of you? Do you have targets? What happens if you do not reach them?
Can you afford to do it?
It is crucial that you fully realise the financial implications of your purchase. As well as the initial cost of the franchise there will be other expenses too. You will need working capital as you are unlikely to see a profit in the early days. You will need to review your own financial situation to see if you can afford to support yourself until you start making a profit.
Speak to other franchisees
When considering all of the above the most insightful people to speak to are the existing franchisees. Any franchisor worth joining would be happy for you to speak to anyone in their network. Do not just approach those businesses that they put you in touch with. These are likely to be the best performing ones or those that are ‘onside’. You need a ‘warts and all’ report so that you can see potential negatives as well as the positives. Ask how realistic the franchisors claims are regarding sales growth and profitability forecasts are, what support is given, how the relationship between them is.
If you are happy with the answers you receive to the above then it would seem franchising is for you. If you have any doubts whatsoever then you either have not investigated fully or you have found that the particular opportunity you are looking at is not the right one.