What to consider when choosing a franchise
You’ve decided that you’d like to be your own boss and you like idea of franchising. So, what are the things to consider when choosing a franchise?
There are just a shade under a thousand UK franchises in the UK, contributing £13.7bn to the UK economy. Even if the one that appeals to you most is in an industry or sector of which you’ve no previous experience, a good franchisor will provide all the training you need to operate the business. It’s in their interests to ensure you’re a success.
Choosing a franchise is a big decision. You’ve got to do the research and be 100% certain that you’ve come to the right conclusion. So here are a few key things to consider when choosing a franchise.
Are you ok being your own boss?
Buying a franchise with a proven business model is undoubtedly a safer way into self-employment – but it isn’t a guarantee of success. You need to ask yourself a few questions; when you’re the boss you lead by example, develop working relationships with clients, recruit staff, organise the office. You’re the ultimate decision-maker. And, you need to be prepared for less predictable earnings. If you’re ready for all that, you’re well set to be your own boss.
What do you want from the business?
There are two types of franchise sales: an existing business or greenfield. So, one immediate question when choosing a franchise is: do I want the challenge of starting a business from scratch, or would I prefer to pick up the reins of a well-established franchise?
You’ll also need to consider your goals. Is this a ten-year project to develop the business before selling it on? Or perhaps it’s a longer-term project to create a nest egg for your family. Try thinking about your end goal for your franchise and where you want to be in 5-10 years time.
Is it affordable?
Money is key when choosing a franchise. You may have substantial cash readily available, or you may have some savings and need to borrow the rest from a bank. Remember that the purchase price of the franchise isn’t your only consideration. You’ll need some working capital and, if it’s a greenfield site, additional set-up costs.
Is it viable?
The franchise model you’re considering may have a brilliant track record and a network of successful franchisees. You may prefer a well-established brand to one that’s new to franchising. In any case, when choosing a franchise, you must consider whether there’s a market for the product or service in your location.
Have you done the research?
Look at the sector the franchise operates in, its potential, its long-term viability. Talk to industry and franchise experts to ascertain its reputation and standing. Talk to other franchisees within the network. And of course, you need to check the level of support you’ll receive from your franchisor.
There’s the human element too. Are the people you’ve met at your target franchise friendly, open, helpful and honest? Remember many of them will be the people supporting you in your business for many years to come. Did they impress you? Will you be happy working with them?
Is it you?
According to the most recent figures from the bfa, in 2018 95% of all UK franchises were profitable. So, what’s holding you back? Success requires commitment and hard work. You’re not going to be doing a 9-5 job any longer. To fully reap the benefits you’ve got to be excited by the business and enjoy working in it on a day-to-day basis.
One more thing to consider when choosing a franchise. Don’t rush into a decision. Investing in a franchise is a big-ticket purchase. Make sure you’re sure before you buy.
Published on: 29 Apr 2020