For many people instigating a franchise signals a new career. It is seen by many as a safe and secure way for entrepreneurs to start up a new business with less risk, as they are buying into an accomplished business opportunity.
A well established brand combined with a tried and tested model and continual advice and support from the franchisor, ensures franchising continues to grow as an industry despite the recent economic downturn. In a recent article by Franchise Direct, the UK franchise industry is said to have increased its number of franchise units by 44 percent over the last decade with franchising accounting for ₤10.8 billion annually in sales.
Finding the right franchise is the most important step and there are a number of things to consider when researching various franchise opportunities.
- Sector -Franchises are available in most sectors; however it is important to select the franchise opportunity that is right for you. You should choose an area that is of interest or that you have previous experience of so that you can enjoy building up your business and increase your chance of success.
- Finance – Franchise opportunities have different investment levels, so you will need to consider what finance you have available and if the business is a viable opportunity. You will be able to find out investment levels on franchise websites, within franchise magazines or by requesting specific franchise brochures. It is worth noting that as well as the initial investment required, you will need working capital to inject into your chosen franchise opportunity when starting out. Depending on the franchise business that you choose, you may also need capital for a shop fit, opening costs including local area marketing and opening stock. Many franchisors will work with you to help you to secure finance for your business.
- The brand – Another consideration for potential franchisees is the brand they will be investing in. Does the company have a good reputation? What presence do they have on the high street? If a company is well known and respected in their area of expertise it is often a good starting point for a new franchisee to build on. It is worth finding out what marketing levies different franchise operations charge and what is included in these for example, seasonal promotions, point-of-sale overhauls, regional and national marketing campaigns; including national press, TV & radio and identifying how much support will be offered to you when you want to plan your own local marketing campaigns.
- Training and support – When researching the franchise for you, look at what support you will receive from the franchisor before and after opening. A good franchisor should provide comprehensive support that ensures all franchisees are in a position to succeed from the start. It is also useful to find out if there are additional costs for ongoing training and support. It is important to find out what support you are entitled to. Does the Franchisor help you to select your site and offer support to get your store up and running such as help with shop fitters and other suppliers, business rates, insurance and health and safety and risk management. No matter what your previous experience is, it is useful to get support from your franchisor on these issues.
- Get to know your potential franchise – After you’ve considered various franchise opportunities make sure you take the time to get to under the skin of your favourite options. Pick up franchise magazines and read about existing franchisee case studies; they will give you a flavour of the success that is achievable with that particular franchise. The next step is to meet key personnel to get a better understanding of the business and how it operates. Most franchisors will attend franchise exhibitions which take place across the UK throughout the year, which are essential to attend in the research stages. Take a list of questions to ask them and use the day as an opportunity to find out if you fit with that franchise. Before you make your final commitment ensure you meet some new and established franchisees at you chosen business to understand all the highs and any lows you may experience when you embark on your new career as a franchise.