How to choose a franchise
With the ever-growing number of companies choosing the franchise model as a means of expanding their brand, selecting which to invest in can be a tough decision for a prospective franchise owner. However, there are some things they should all consider to make this choice clearer before taking the plunge.
If you have made the decision to invest in a franchise business: well done! Statistics show that with the support and proven business models of an established franchise business, you are more likely to succeed than if you choose to go it alone, starting a new business from scratch. However, the question of which franchise to pick can be a difficult one to answer, with thousands of franchises vying for your attention and shouting the benefits of their particular opportunity. In such a competitive market, and with such a wealth of choice, where to begin in making a decision involving a potentially significant amount of money, that will hugely impact on your future prosperity, happiness and work/life balance?
Experience and skills
A sensible starting point is to investigate franchises within a sector that you have experience in. The average first-time new franchise owner is 34 years old, meaning for most at least a decade of work experience. If the industry you worked in previously was something you enjoyed, or at least were good at, it makes logical sense to take advantage of your accumulated knowledge and choose a franchise in this sector. Thus, you will be instantly more confident and able to deal with customer enquiries more effectively from the outset. Also consider what you are good at. Do you enjoy practical or manual work? Consider a gardening or cleaning franchise. Are you somebody who has recently left the Armed Forces? Your leadership qualities could make you ideally suited to a management franchise in a number of industries.
On the other hand, if you have taken on a franchise to escape from a job that you hated, and are a newcomer to your latest industry, passion, combined with the thorough training provided by most franchises, will go a long way to gaining you the success you crave. Many franchises, although in a specialist industry, do not require that their new franchise owners already possess knowledge of the sector, and have the processes in place to get the new investors more than ready for the launch of their business. Choose a franchise that you can see yourself happily getting up to go to every day; something that you feel strongly about. Owning a business is all about making a living from something you are passionate about. Perhaps consider choosing a franchise opportunity that you have already engaged with and respected as a customer.
Let’s not lie; earnings potential and return on investment are certainly high up there on the list of priorities for anybody considering a franchise. However, profits are not the only thing that make owning your own business enjoyable. Many franchise owners cite being their own boss and gaining the ability to set their own goals and time-frames as key benefits of the franchise model. Yes, you could earn more working yourself into the ground, and with your own business, choose to work weekends if you wished to boost your income, but for a lot of the people The Franchise Magazine reaches out to, escaping from the inflexible nature of the 9-5 (or more) office routine, and gaining the ability to earn as much as they feel they need in the hours they feel comfortable doing, rather than what their boss demands of them, is hugely advantageous.
Personality is key. If you enjoy interacting with people, look for a franchise that involves customer service, or meeting clients to secure business (in sales or recruitment for example). If you prefer to be a little more hands-off, consider a management franchise where you interact with a small team that work for you, where you can build up positive relationships with a smaller group over time. Both can be rewarding, it is just a matter of preference.
This one is about judgement. You could play it safe and select a famous franchise that you are very confident will be successful, but such brands usually come at a premium in terms of investment fee. The alternative is to choose an up-and-coming brand. Many of these, in trying to establish and make a name for themselves, will offer a temptingly lower initial investment fee, but you will have to use your own smarts to decide if getting on-board early will pay large dividends in the long run, as the reputation of the company grows.
Do you know somebody that owns a franchise? Do they have a new car parked in their drive and a huge smile on their face every time you see them? Do they talk passionately about their business? If so, they and their brand are obviously doing something right, and if the kind of work they do is something you can see yourself enjoying, ask them what you need to do to join them. If you do not know someone directly involved with a franchise, there are plenty of case studies both in publications such as this and online, where franchise owners will describe in detail the benefits, and indeed challenges, involved with running their chosen franchise. Take the time to research their lifestyles, examine their profits and go from there. While all franchisors will talk up their opportunity and make it seem like the best thing in the world, hearing unbiased testimony from those who actually know first-hand is the key to making an informed decision.
Many sectors have a huge range of franchises offering similar products or services, and it is vital to choose wisely between the offerings. Food and beverage, retail and care are just three examples of sectors where the marketplace is somewhat crowded. As in the last entry, take time to examine the pros and cons of all the brands offering franchise opportunities within any given industry, and draw your own conclusions as to which shares your values and is right for you.
While last in our list, this is by no means the least important aspect, and to many will be the single factor most likely to sway their decision. Most people looking to take on their own business are doing so because they feel they will gain a better income and lifestyle. What the franchisor says you will make, and the reality, can be two distinct things, so, as before, read the small print and research the experiences of those franchise owners that have gone before you in order to get a clear perspective of the level of earnings you can expect from a franchise. Doing so is not only about profits, but profit margins and return on your initial investment for the amount of hours you put into your business. Set your own income goals and find a franchise business that can match them in the amount of hours you are prepared to put in.
If you think you have made up your mind, this is just the beginning of your journey. Before signing anything, meet with the brand’s existing franchise owners, and importantly, the franchisor, to get a feel for the place and make sure that they are somebody you can work with and that you feel is trustworthy and able to support you on the road to success. Becoming a franchise owner is an exciting time, but it is not a decision that can ever be rushed or taken lightly. After all, it is something that will affect you life and prosperity forever.