Frequently Asked Questions
Established individuals from the franchise industry share their knowledge and experience to answer some of the most common franchising questions.
Question: What are the advantages of investing in a franchise over starting a business for yourself?
One of the key advantages to buying a franchise is that you will be buying into a proven business model, the name and brand will be already established. Statistics show that so many people fail in business when they try to go it alone. One of the other advantages to buying a franchise is that you will be able to start your business very quickly after completing your training. As well as full training you will also receive ongoing support thereafter.
Sandra Venables, Managing Director of Well Polished
Question: How soon can I expect to make money back from a franchise?
How long is a piece of string? There is no set or defined timescale for getting a return on your investment (ROI) in a franchise. Different franchises will have different payback times.
Even within a franchise, it is difficult to be accurate about repayment timescales – much depends on the activity levels, competence, ambition and drive of the franchise owner.
That said, ROI is an important factor (often the most important) when considering a franchise and my advice to prospective franchise owners is as follows:
Firstly, do your own financial modelling with your own assumptions based on the size of your marketplace, your view of ‘customer purchase’ etc.
Then, ask the franchisor for their ‘ballpark’ turnover profit predictions.
Then, speak to a selection of franchise owners and ask them their turnover/profit figures.
Somewhere between the three, you will have a fairly accurate answer, and can then finally speak to a good accountant and ask them to ‘take a view’.
Nigel Toplis, Managing Director of Recognition Express, The Zip Yard and ComputerXplorers
Question: How would you describe the long-term relationship between a franchisor and a franchise owner?
The relationship between franchisor and franchise owner is essentially a partnership. A good franchisor understands that the success of the business depends upon the success of the network – and that means the success of individual franchise owners.
While franchise owners must ultimately take responsibility for their own businesses, you should expect your franchisor to take the long-term development of your business seriously. This means investing in building brand awareness in the marketplace and providing maximum support and encouragement for those franchise owners looking to expand.
Lloyd Evans Chief Executive of ChipsAway