When embarking on any new venture, it’s essential that you take a long term business view, and buying a franchise is no exception. For your franchise business to be a success, there are many steps you should follow, but knowing your end goal is one of the most important.
Your end goal effectively sets the course for your business; it gives you something to aim for; some direction. It’s not simply about profit. Ever considered what your end goal might be?
Here are a few examples to get you thinking:
Are you buying a franchise to sell on?
The franchise industry is a lucrative one. According to the NatWest/bfa (British Franchise Association) 2013 Franchise Survey, franchising turns over £13.7 billion annually and 92 per cent of units are profitable. Little wonder that so many people are eager for a slice of the action.
Building up a franchise business, increasing its value, and selling it on is a fairly common motivation for buying a franchise. If this is yours, then profitable business growth will be a major part of your goal. Luckily for you, franchises operate on tried and tested business models, plus there is a lot of support on hand. If you follow the guidance offered, you should be able to build up significant capital value on your initial investment in the franchise.
Selling should not damage the public perception of a business. The franchise itself won’t generally change and so customers probably won’t notice any difference, apart from the personal relationship they may have with you. Do read the fine print in your franchise agreement with regard to transfer fees and rules – it’s likely that the franchisor will need to approve who you sell on to.
Are you wanting to start your own business?
Franchising is one of the safest ways to start a business, far more so than starting a new business from scratch, and is a great way for new entrepreneurs who perhaps don’t have experience of running a business to do so. While running a franchise, you can develop skills and learn vital lessons that could theoretically equip you to start your very own business one day. From managing staff and ordering stock, to balancing books and attracting custom, operating a franchise can stand you in good stead for launching your own initiative in the future.
Be very aware, however, that your franchisor needs to protect its intellectual property so there would probably be non-compete clauses in your franchise agreement. Whilst you could use the business acumen you have gained to start a new business, you would probably not be allowed to operate in the same business sector as your former franchisor.
Are you buying a franchise to pass on to your family?
Few people might think about buying a franchise and passing it along to a family member. The idea of a five, ten, even a twenty year franchise agreement might inspire reassurance and security, but in that time, you may wish to stand down and rather than see a stranger enjoy the fruits of your labour, want to transfer the business to the next generation. It’s a nice idea, keeping the business in the family.
If you have this goal in mind, and your franchise agreement will allow, you can involve your family in the running of the franchise throughout your tenure at the helm; show them how it’s done. When the time comes to pass over the baton, it’s likely that the same rules will apply as if you were selling on the franchise to someone else – the franchisors will want to have a say. Equally, they can assist the transition and may even provide advice and training to your family.
To be your own boss?
This is arguably the biggest attraction of franchising: the chance to be your own boss. Buying a franchise gives you the opportunity to run a business pretty much as you see fit, so long as you adhere to the instructions set out in your franchise agreement and the operations manual. The amount of control you have will vary from franchise to franchise, so check the fine print and perhaps speak to some existing franchisees about what sorts of things need to be referred back to the franchisors. Nevertheless, owning a franchise will mean that you manage the business; that you are the boss!
To enjoy a better work-life balance?
Whether you want to semi-retire, devote more time to caring commitments or simply want to work less, it’s possible to enjoy a better work-life balance with franchising. If this is the case for you, choose your franchise carefully. Don’t be under the misapprehension that buying a franchise will offer you an easy life; it’ll be hard work to begin with and there will be times when you put in far more hours than you would like. However, once that business is off the ground, you may be able to better manage your time, perhaps by hiring some staff. If you are serious about enjoying an improved work-life balance, for whatever reason, there are plenty of part-time franchise opportunities available, so maybe look at these ahead of any other businesses.
To fulfil a life-long ambition?
Perhaps you always wanted to branch out on your own? Maybe you have dreamed of selling cupcakes, leading a team or opening a restaurant for years? Possibly you wanted to run a profitable business with the intention of retiring early? For many people, buying a franchise is the fulfilment of a long-held ambition, allowing them to finally achieve that professional or personal goal. It might be that fulfilling that ambition comes a few years into your adventure, it might be something you need to work towards. Most of us have ambitions that can’t be met while we’re employed by someone else; the wonderful thing about franchising is that you’re in control, it’s your destiny.
To use your skills?
A common reason cited at exit interviews for leaving a job is the under-utilisation of skills. Fortunately, one of the first things that any franchise guide will tell you is that a skills match is the most important factor to the success of a new business. It doesn’t matter what the industry is – if you have the required skills, you can work in any sector. To that end, if you really want to use your skills, you might need to think a little more openly about the type of franchise you buy. There might not be any suitable opportunities within the industries that you’re familiar with, so expand your options and consider an area which is new to you.
To turn a hobby into a business?
For many people this is the dream; to turn their hobby into a successful, money-making business. Do think this through before rushing in. You hear stories of how a much-loved hobby can become something an individual grows to resent, when all the fun is replaced with very real financial and legal obligations. Again, franchising can be a great route to go down to avoid many of these issues. The business model already exists, support is on hand, you can talk to existing franchisees, and you could quickly hit the ground running. As always it’s a good idea to do some research into the types of franchise opportunities that are available in your chosen area.
To achieve job satisfaction?
Job satisfaction, it would appear, is one of the most elusive benefits associated with working life. Yet it’s a natural desire. Some people will even leave well-paid careers or professions that they’ve attained tough qualifications for because their job simply doesn’t satisfy this basic need. Job satisfaction isn’t simply about choosing the right business; it’s also about getting the right training, feeling like you have support and being in control of the situation. This is something franchising can offer.
Top tips when considering buying a franchise
To recap, when you think about buying a franchise, it’s important to have an end goal in mind. You might not know what that goal is just yet, so here are a few tips:
1) Define your goal: before you start looking at opportunities, you should sit down and identify what your main end goal is. You may come up with two or three at first, but keep at it until you have established that one main objective. If it helps, write lists of pros and cons or consult your nearest and dearest, who may, believe it or not, have a clearer idea of what you want than you do.
2) Keep it in mind: once you have settled on that goal, then make sure you keep it in mind at all stages of the buying process. If you only want to work for a few more years, then enter into a shorter agreement, etc. Keep sight of that goal whenever you make a decision – it should be a contributing factor in every choice you make. Perhaps even think about creating a long-term plan for the achievement of your goal. This should keep it fresh in your mind at all times.
3) Don’t forget your short-term goals: while your end goal is important, don’t concentrate on it to the exclusion of your short term goals. These are equally important to your business and the satisfaction of them probably contributes towards the achievement of your end goal.
There you have it – franchising’s end goals. What’s yours?