Make no mistake, joining a franchise is a big decision – but if you get it right then you can set yourself up with a profitable business that you enjoy running. So how do you choose the right one?
A person’s character, expertise and lifestyle makes them better suited to some franchises more than others. What is right for someone else is not necessarily the right road for you. There are close to 1,000 franchise brands in the UK, according to 2012 stats from the British Franchise Association (bfa), which means there are plenty to choose from. The first step is to narrow these options down.
In many ways, the key to finding the right franchise is to consider what is possible, whether an opportunity is viable and – finally – whether it will be enjoyable for you.
The possibilities in business are pretty much endless, but within franchising you are choosing from a definite list of options, so see what is out there to begin with. Knowing what is available may open your eyes to an opportunity that interests you, even if you had never thought about it before.
Another aspect of a franchise being ‘possible’ relates to the financial and contractual side of the opportunity; do you have the savings or borrowing power to set up the franchise? Put aside for a second whether you can make it a success – start by asking yourself whether money – or some other area of the initial contract – will put a franchise out of reach.
In terms of finances, you may be best off visiting a bank with a specialist franchise lending team, as they will generally have more experience in dealing with such ventures. One point to note about affordability, however, is that you should be slightly wary of franchises with an overly cheap initial price – be sure that you understand why it is so cheap.
Just because something is possible does not necessarily mean the opportunity is actually viable. This can be interpreted in a number of different ways.
Even if the franchisor appears to be a good one, the overall model makes sense and there is availability, this does not imply it is definitely the right choice – you must also look at the specifics of the opportunity. For a start, is the location somewhere you would consider moving to? What is the local competition like in that territory? Does the location restrict or aid its chances of success?
The other side to viability is your own ability to deliver success. Do you have the skills to do the work to a sufficiently high standard? Does your lifestyle mean you are able to work long hours at times? If you are looking for a franchise in which you are able to work 9am to 5pm then you are likely to be restricted in your choices. Also, if you are not hugely experienced in the sector, does the franchisor offer enough support and training to allow you to learn the ropes?
Finally, you may want to get the professional opinion of a number of experts before assuming the business plan is viable. For instance, getting a lawyer to look over contracts, or speaking to an existing franchisee or industry body about the opportunity you are thinking of going for.
Your research of prospective franchises should give you a fairly accurate idea of what your normal working day will involve, so even if you have never worked in that sector before, you should understand what you are getting in to. From here, it is a question of being honest with yourself if this is something you can see yourself doing for at least five or ten years.
There are differing opinions regarding what it means to have an ‘emotional fit’ with a franchise – of course it helps enormously if you are hugely passionate about your product, as this enthusiasm tends to translate to expertise over time. However, it can be just as important for you to simply enjoy your day-to-day tasks (perhaps talking with a range of people) or having the right motivation (aiming for a particular sell-on value).
According to the bfa, nine out of ten franchise units in the UK in 2012 were profitable, so franchisees are in a good position to be commercially successful, but it is vital to consider your own happiness in your evaluation of an opportunity. If you can spot a franchise that is possible, viable and potentially enjoyable, then you may be well on your way to the right choice…