Your franchising questions answered

Q: What previous qualifications and experience do I need to become a franchisee?

A: The most important requirements are genuine enthusiasm and a desire to succeed with your chosen brand. It is important that you explore all the different franchise opportunities available for your particular geographical region. Draw up a shortlist of around 10 brands to check out in detail. You should visit a least four franchisors before making a decision to proceed. You should be able to make your own judgements in relation to the required qualifications and experience so that it matches what you have to offer. When the two dovetail, you can start to proceed with a reasonable amount of confidence.

Q: How do I research the franchise market for opportunities?

A: Subscribe to The Franchise Magazine and then visit the top franchise websites in the Google rankings such as www.theukfd.net. Having carried out your initial research remember that only about 40 per cent of franchisors in the UK take professional advice and guidance from Franchise Consultants, and it is those that do not follow this pathway that have the highest chance of failure. Something in the region of 60 per cent of all of these brands fail within the first three years of trading. Those that take professional advice and guidance and become members of the British Franchise Association have an astonishing 95 per cent track record.

Q: What documents will I be required to sign if I become a franchisee?

A: This varies considerably between one franchisor and another. Those that have not taken professional advice and guidance from a British Franchise Association affiliated Franchise Consultant and Franchise Lawyer will often have little or no documents to be signed before they offer you the Franchise Agreement. You can begin to determine whether the franchise offering has been well thought-out and is following a mutual due diligence procedure as your way of helping to evaluate the franchisor's credibility and strengths. Those that do have a well documented and professional approach to evaluating and awarding a franchise, rather than selling it, will become obvious after you have met with a few franchisors.

Q: What regulations do I need to be aware of?

A: The most important is misrepresentation. Everything that the franchisor says to you must be confirmed in writing. Whatever sales projections and profitability is indicated must relate to what is written down. You then need to be absolutely certain that they own the intellectual property rights of the brand being offered. You can ask to see a copy of their Trademark Registration for the UK. While there are no specific franchise laws in this country, there are many laws that relate to franchising and you need to fully understand them all. A professional Franchise Agreement will cover these in detail.

Q How do I check a franchise opportunity is sound?

A: First of all ensure that the franchise that you are considering has a solid set of accounts confirming that they are financially sound. You must ensure that the financial projections outlined in the prospectus can be confirmed by not one or two franchisees, but ideally, the majority of the network. Those that have a number of years of successful trading are obviously the safest franchising to invest in - this is not to say that those just starting are not going to succeed, but the chances of them surviving are obviously much greater.

Q: What financial help is available for investing in a franchise?

A: All the high street banks, except Barclays, have a dedicated Franchise Unit. These have been specifically created to help prospective franchisees organise their funding. All other sources of funding are interested in helping to fund franchise acquisition, provided that they are genuine business format franchises, and ideally members of the bfa.

Q: What do I receive in return for my investment?

A: You will receive the right to trade under the franchisor's brand, benefit from initial and ongoing training and utilise well proven guidelines for the operation of your business from day one. Provided that you are willing to follow the advice of the franchisor and have the right attitude in relation to their brand, products and services, then you are likely to succeed. In return for your investment of time, money and effort you should be rewarded with owning a franchise business that you will be proud of for many years to come, especially if you have chosen a business that you are genuinely enthusiastic about.

Q: How do the ongoing fees work?

A: These vary with every franchise but most look to receive a Management Service Fee on a regular monthly basis. This could either be a percentage of the total turnover or a fixed fee. Remember that the franchisor needs these ongoing fees to help fund your future support and to help you grow the business to its full potential.