If you are looking to become a franchisee, you will no doubt be searching high and low for the best franchise opportunities out there! It might seem like there are endless options and your initial search probably asks more questions than gives answers, however, you are eventually going to make a ‘considered’ purchase rather than an impulse buy, so, take your time, get all the facts and figures and be ready to make an informed decision when the time is right for you.
Look at getting the right franchise for you, at the cost that is sustainable to you, in the sector that interests you the most, and only at a time that suits you, never feel like you are being pushed into a certain franchise because it suits other people than you!
Buying A Franchise Is A Considered Purchase
It is fair to say that a franchise has a much higher chance of success than any other business format, proven to be the case from an independent study a few years ago, which reported that in excess of 90% of franchised businesses perform compared to the industry wide reported figure of 40% of independent business not surviving beyond two years, this short report though does not suggest that everyone should be looking to buy a franchise, indeed, franchising is not for everyone! I bet you did not expect to read this from someone who is heavily involved within franchising, but it is a fair point, if anyone does get this element incorrect then it can be short term gain for long term pain, ask anyone who is already in franchising and they will tell you that nobody wins in these scanarios!
A Franchise Increases Your Chance Of Business Success
When looking at your potential franchise options, start by looking for ones that you have a genuine interest in the service or product that they are offering, this way, your chances of putting maximum effort into working the brand or system is much greater, this will go part way to having a successful business!
Do you also believe yourself that you will be able to operate the franchise and follow the systems? After all, this is precisely what a franchise is, the hard work has already been done and you need to follow the proven way to do it yourself…
It might come as a surprise to you, but franchisors rarely look for anyone’s ability to buy said franchise, instead they look for ‘best fit’ so please do not get into the mindset that you can just rock up and buy any franchise, you might end up being very disappointed!
Franchisors Are Searching For Best Fit Franchisees
Buying a franchise is also a long term commitment, often a 5 or 10 year renewable term, whilst there are options mid-term during your franchise to exit if you needed to, careful consideration needs to taken into account, some questions to ask yourself might include: do you plan to stay in your current home, what does your survival budget look like, can you expand, does your family support you? There will be lots of others for sure!
Ask What Is Included For Your Franchise Fee
You might be wondering why you should pay an initial fee for the benefit of buying a franchise, and then especially for brick and mortar franchises having to then also commit significant funds to assets such as stock and equipment!
Every franchisor will be looking to recoup the costs to onboard you as a franchisee, but this is only the very start, another cost to the franchisor is the ongoing support obligation that they make to you which will often come from a head office structure that needs to be paid for of course! There are many more areas to include here that are too extensive for this short report, however, ask the question of what you get for you fee, and you will be staggered with the response, in a good way, imagine what costs you would incur by trying to get all of this by yourself!
Consider The Total Cost Of A Franchise
Just like any business, a franchise will require working capital and cashflow to keep it going, is it well known in business circles that there are so many profitable businesses out there can do not survive, not because they are not profitable, but because they run out of available cash, and this is very true of some franchisees thought process when buying a franchise, a franchised business is rarely one that you can buy, open the door and then expect a flood of new business, instead there are marketing programmes to roll-out, which come at a cost, staff development, again which are cost based, the cost of the goods or services you need on hand to be able to sell on and make a margin, and then there are other fixed and variable costs to think about before you even think about taking your salary or profits!
There Is Free Assistance To Help You Buy A Franchise
There are specific franchise consultants to help you find and secure a franchise, there is a huge benefit to you as often the franchise consultants will be appointed and paid by the very franchised operators you are looking into and will almost certainly cost you nothing to engage with them, above all, it is quite likely that the directory you are reading this article from will list some of those experts, if not, send a message and they will point you in the right direction!
I hope to see you join the world of franchising very soon!
This post was written by Richard Pakey, Managing Director at Lime Licensing Group. They are an exhibitor on the FranchiseShow247 Business & Professional Services floor and you can visit their FranchiseShow247 exhibition stand here
