How to find the RIGHT franchise
With over 1,000 companies offering franchise opportunities in the UK, it is important to ensure that you have a full understanding of the investment you are making
Investing in a franchised business is a route into becoming your own boss, owning a business and building a real asset for yourself. In return for your initial capital investment and ongoing Management Service Fee (usually a percentage of your turnover), you will receive the right to trade under the franchisor's brand, benefit from initial and ongoing training and utilise well proven guidelines for the operation of your business from day one. Provided that you are willing to follow the advice of the franchisor and have the right attitude in relation to their brand, products and services, then you are likely to succeed.
The most important requirements for becoming a successful franchisee are genuine enthusiasm and a desire to succeed with your chosen brand. It is important that you explore all the different franchise opportunities available for your particular geographical region. Draw up a shortlist of around 10 brands to check out in detail. You should visit a least four franchisors before making a decision to proceed, and take into account that members of the British Franchise Association (bfa) and franchisors that take professional advice from bfa-affiliated Consultants and Lawyers have an astonishing 95 per cent success track record.
You can begin to determine whether the franchise offering has been well thought-out by looking at its due diligence procedure in dealing with you as a prospective franchisee investor - monitoring this can help to evaluate the franchisor's credibility. Everything that the franchisor says to you, including sales projections and profitability, must be confirmed in writing.
Also, ensure that the franchise that you are considering has a solid set of accounts confirming that it is financially sound. You must ensure that the financial projections outlined in the prospectus can be confirmed by not one or two franchisees, but ideally, the majority of the network. Franchises that have a number of years of successful trading are obviously the safest to invest in - this is not to say that those just starting are not going to succeed, but the chances of your business surviving are obviously much greater with a well-proven business concept.
In return for your investment of time, money and effort you should be rewarded with owning a franchise business that you will be proud of for many years to come, especially if you have chosen a business that you are genuinely enthusiastic about.
Text: Roy Seaman CFE