Frequently Asked Questions
Q. Do I need previous experience in business to buy a franchise?
Answered by Karen Dyball,
NBC Bird & Pest Solutions
It can depend on the franchise and the type of business experience an individual has. Some franchisors may look upon an applicant with previous business experience as an advantage - which in some cases it is - but on the other hand it can mean people have difficulty adapting to new ways!
When a franchisor considers a prospective franchise owner, an individual's ability to be able to converse well during the early days of the process is vital, as ultimately they will be dealing with customers. Of course there are many other factors involved but remember, a franchise should come with complete training, after all that's what franchising is about.
The NBC franchise offers an initial four week comprehensive training programme and support that continues once operational, which is essential to the growth and success of the business. NBC franchise owners come from a variety of backgrounds, while we recognise that previous experience can be beneficial, the drive and the determination to succeed are more important.
Q. How can I get a realistic idea of how much it will cost to set up a franchise?
Answered by Brian Soanes, Chief Executive of The Business Club
The cost can vary enormously. Obviously you would know the Franchise Fee (what you pay up front for the franchise). What is more difficult to assess is how much working capital you will need to run the business until it becomes profitable. To calculate this you absolutely have to do a business plan. If you've never done one before get an accountant and/or business consultant to help you.
One of the biggest decisions you have to make that will impact on the cost is how aggressive you are going to be in growing the business...will there just be you or will you be employing sales and other staff? You also need to factor in whether you need a wage during the early months when the business is not profitable.
Wherever possible I would advise going for growth - to build a "proper" business, rather than just generating an income for yourself. Then you are building an asset which one day you may wish to sell. The bigger and more profitable the business the more you'll get for it! To give you a clue - the working capital required to start up one of our franchises (The Business Club) varies between £6,000 and £30,000 entirely depending on your growth strategy.
Finally, when you've done your business plan check it out with some of the operators who have been running your selected franchise for some time.
Q. What are the benefits of franchising my business?
Answered by Malcolm Porter, Regional Director of FDS South East
The main benefits of franchising a business would be summarised as follows:
1. RAPID NATIONAL GROWTH
For businesses that experience finance, human resource and property restraints to achieving expansion, franchising can offer a solution by allowing franchise owners to fund the expansion of premises, vehicles or whatever is necessary to grow the business. In return the franchise owner is granted the privilege to use the intellectual property rights, knowledge and experience of the franchisor in a truly win-win philosophy.
2. INCREASED NATIONAL MARKET SHARE
National coverage can be achieved relatively quickly via franchising if the franchisor provides the necessary support services. As well as capturing market share this will boost the company's brand recognition.
3. HIGHER SERVICE LEVELS
Franchise owners operating within their specific territories provide a personal touch to the customer or client which elevates it above company-owned and employee-managed outlets.
4. SELF-FUNDING EXPANSION
Franchising should become self-funding as the initial costs of creating and providing the franchise - including the training, launch support, site selection, intellectual property rights and software licence - are recovered through the initial investment fees paid by the franchise owners. Additionally, the investment requirement to open each operation, including lease, store fittings, vehicles and staff recruitment, is taken on directly by the franchise owners.
The quality of a franchise owner - their abilities, qualifications, skills and experience - will ultimately reflect on the success of the franchise, so taking the time initially to implement an efficient selection process is paramount.