How to find your ideal franchise
Nigel Toplis, Managing Director of Recognition Express, ComputerXplorers, The Zip Yard and past Chairman of the British Franchise Association, advises on how to assess a prospective franchise opportunity.
Franchising is a crazy mixture of conformity and individuality that combines the best elements of big business and small operations. To be successful, a franchise owner must comply with the franchise system and yet such compliance will enable the franchise owner to achieve a greater level of fulfilment.
There is no template for being a successful franchise owner – except perhaps the following:
- Willingness and propensity to work hard
- Acknowledgement to follow and adopt the franchisor’s system
- A desire to succeed
A franchisor will always be on hand to provide knowledge and expertise on all the key areas of the business, which franchise owners can take as much or as little advantage of this as they require. Some have referred to the relationship of franchisor and franchise owner as a ‘marriage’. It is the ideal option for both entrepreneurs and those less keen to take a big leap into the unknown.
When selecting a franchise opportunity there are some questions you need to ask:
Why do I want to run a business?
Personal ambition, getting just reward for effort, attaining greater job security, to learn new skills, building a capital asset and to work with the family are all well documented reasons.
What am I good at?
Sit down and evaluate your strengths and weaknesses, your likes and dislikes. You should look upon a franchise as a long-term venture, more a vocation than a job.
What sort of person am I?
It will help if you are positive, outgoing and energetic, if you like solving problems and see yourself both as a self-starter and a team player.
What can I afford?
Be sure you can afford both the initial fee and time spending training and thus not working as well as any shortfalls over the first months of trading. If you think the venture is going to cost £100,000 and you only raise £80,000 be very, very sure before you beg and borrow (usually from family) to go ahead.
Once you’ve identified a business that:
- Interests you
- Uses your skills/experience
- You can afford
- Matches your aspirations
The next step is to find the right franchisor.
10 questions you should ask a prospective franchisor
- Does it have a solid trading history?
- Is it financially sound?
- Does it have a history of success?
- Is there a genuine head office support structure?
- What do they actually provide by way of support?
- If the franchisor supplies product, what are the Terms and Conditions?
- What is its position in the market?
- Are projected cash flows realistic? Can they be proven?
- Does the company have a finance facility with the banks?
- How tough is their interview process?
You should now be in a position where you have decided to become a business owner, you know the type of business and industry you want to be in and you’ve chosen the franchisor to get into bed with.
Next create a Business Plan (possibly with the help of a good accountant), which explains what you hope to do, how much money you need to do it and how you propose to pay the money back. Finally, approach the bank!
The magic of franchising is that it combines an individual skill set, ambition, drive and energy with the tools, training, branding, support and proven business system of the franchise. Remember, you’re in franchising for yourself but never by yourself.
Written by Nigel Toplis, Managing Director of Recognition Express, ComputerXplorers, The Zip Yard