Become a successful franchise owner in 10 simple steps
Franchising offers a great way to become your own boss and run a business, while still retaining an association with a head office organisation that can provide the training, support and national presence solo start-ups have to cope without. Professor Roy Seaman CFE provides 10 tips to make your business a success.
Some franchise opportunities are offered for less than £10,000. You should be very careful with all low cost franchises, since they have the highest failure rate.
Every element of the franchise package needs to be broken down and there will be up to 21 areas. The franchisor then needs to justify the amount of money that they are charging for each of these elements.
Remember, should you have any doubts, do not proceed!
2/ Having shortlisted between 10-20 opportunities, visit their websites and register your interest in owning and operating their franchise, as well as requesting copies of their printed prospectus. This will often help you identify the more serious players.
3/ Every issue of The Franchise Magazine and The UK Franchise Directory contains the FDS Checklist, which will assist you in due diligence with the franchisors.
There are four basic areas and these cover:
(a) What the franchise prospectus should contain.
(b) What you need to find out from each franchisor you are considering pursuing further.
(c) Warning signs and potential problem areas you should be looking out for.
(d) The Franchise Agreement.
4/ Always ask to meet a number of your chosen brand's existing franchise owners. Ideally, you need to find out from the franchisor how many franchise owners they have. If the answer is 50 but they only provide you with a shortlist of five, ask why - you should ideally be given the full list.
5/ You should always seek advice and guidance, not just from your bank, your lawyer and accountant but also from experienced Franchise Consultants, since they are probably more alert than most professional advisors as to the status and standing of the brand you have under consideration.
6/ It is important that you carry out a strengths and weaknesses assessment about yourself. You should always ask the franchisor: "What are the essential skills that your successful franchise owners have?" If your answer is "no" this is obviously not a franchise you should consider any further.
7/ Always engage a bfa affiliated Franchise Lawyer to check your Franchise Agreement. Never go to a lawyer and ask them to provide you with advice and guidance and suggestions for any alterations. A good Franchise Agreement is the same for each and every franchise owner that comes on board. The franchisor should provide you with an introduction letter for your lawyer.
8/ Keep notes about everything the franchisor says to you and comments made by their franchise owners. Call FDS on 01603 620301 for their free advice and guidance service.
9/ Ensure your bank will support your application to own and operate a franchise.
10/ When you are 100 per cent satisfied in relation to all areas, there is no reason why you should not proceed and realise your ambition of becoming a successful franchise owner and operator with your chosen brand.
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Please note that we do not recommend or endorse any opportunity featured on this site and suggest that you seek independent financial advice before investing in any franchise or business opportunity.