How to become a successful franchise owner in 10 simple steps
Franchising offers a great way to become your own boss and own 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
Start your research by buying printed copies of The Franchise Magazine and The UK Franchise Directory, as well as visiting their sister websites www.thefranchisemagazine.net and www.theukfranchisedirectory.net By going through the printed publications, you will be able to create a short-list of some of the most important and genuine business format franchises which appeal to you.
Having short-listed 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.
Re-visit back issues of The Franchise Magazine and The UK Franchise Directory for the 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 considering pursuing further.
(c) Be wary if the Franchisor advice section pointing out any problems you should look out for.
(d) The Franchise Agreement.
Always ask to go 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. Ideally you should be given the full list.
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.
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 you do not have them, this is obviously not a franchise you should consider any further.
Always engage a BFA 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.
Keep notes about everything the Franchisor says to you and comments made by their Franchise Owners. Before you make your final commitment to proceed, request that the Franchisor helps you with your initial Market Research and business planning. Call FDS on 01603 620301 to make the final check to ensure the franchise still has a Highly Recommended or Recommended rating and does not have a Not Recommended rating. You can also call this number for FDS' free advice and guidance service.
Ensure your bank will support your application to own and operate a franchise.
When you are 100 per cent satisfied in relation to all areas, then there is no reason why you should not proceed and then have the ambition of becoming a successful Franchise Owner and operator with your chosen brand.
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. You should also be wary of those, which cost £100,000 for the same reason.
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!
Written by Roy Seaman