Are you looking for a way to manage your own business with the safety of a tried and tested formula? Buying into a franchise might be the perfect option for you. In fact, franchises inject £17 billion into the UK economy every year, highlighting what a lucrative business opportunity it can be. With start-up finance, buying into a franchise is simple, but first, you need to make a business plan and decide which franchise will work best for you.
With so many franchise options available, it can be a tough decision to make. To help you, here are five tips to consider when choosing which franchise is right for you.
1. Is buying into a franchise the right choice for you?
The first step in buying into a franchise is determining whether it’s right for you. It is a great business model, allowing you to open a business under well-established branding. This removes the fear of your new venture opening to poor reception, but it’s not a career path suited to everyone.
You must prepare yourself for the reality that buying into a franchise does not mean you own the right to do whatever you want with that business. You must adhere to the rules set out to you by the franchise founder. In some cases, you may not agree with the decisions being made. However, it is still true that you will have some autonomy in how your business operates; it is a good choice to meticulously go through contracts before signing and buying-in. What decisions are yours and what will be dictated to you?
2. What type of business do you want to operate?
Many people assume franchising is only about fast-food chains and coffee shops. But this couldn’t be further from the truth. The structure of a franchise exists in every product, service or offering, so you may not notice that some of your favourite businesses are part of a larger franchise.
Consider how you want to work and what type of activity you enjoy. Ask yourself what level of interaction you like with your customer or client base. Will you do the work yourself, or do you plan on employing others? Your desire to buy into a franchise may be entirely for monetary gain, to take on an entrepreneurial career or even the freedom to spend more time at home with your family. Each of these is possible, depending on which franchise type you decide on.
Examples of possible franchise businesses include; gyms, spas, cleaning services, health and wellness, and other leisure businesses, among many more. Once you think outside the box for franchise opportunities, you can choose a product or service that best aligns with your lifestyle or preferences.
For more guidance on finding a franchise that suits you, keep up to date with upcoming franchise exhibition events. These expo events bring together entrepreneurs from the franchising industry to network, learn new skills and discover new franchise opportunities. It’s a fantastic way to learn more about the diverse range of franchise opportunities available. You might want to check out the International Franchise Show London in particular, which is Britain’s largest international franchise show.
3. Does the franchise suit your long-term goals?
Choosing a franchise that works for you must align with your long-term goals. This means taking the time to evaluate what these are. To do this, create a business plan which includes where you want to be in five or ten years. Although everyone’s goals are unique, choose a time frame reflecting your own goals.
Once you know where you want to be in the future, whether growing your franchise business further with multiple locations or buying into other businesses, you can look for a franchise option that suits your vision. You might opt for a self-sustaining franchise if you plan to open multiple franchises quickly. Alternatively, opt for a franchise with plenty of room for scale-up and growth that you can pour your attention into and look forward to the results.
As part of your business plan, work out the projected revenue and associated costs using the advice and guidance from your preferred franchise organisation. Are you happy with the profit margin? When buying into a franchise, your income and personal finance situations may be affected at any point after purchase, so have a clear idea of your potential earnings before signing contracts.
When researching possible franchises, look at current locations and case studies. What have others been able to achieve with the business? Learn more about creating a business plan and scaling your small business using our helpful article.
4. Does the franchise play to your personal strengths?
A significant aspect of buying into a franchise for many people is a genuine passion or interest in a particular field. In fact, many franchisees don’t set out with this goal in mind and use their knowledge and experience in an area to begin an entrepreneurial career. This means beauty technicians, bakers, and other skilled workers who are talented in their profession can take those next steps in working for themselves.
This is a much more organic way to find a franchise that works best for you and your business vision, as it comes from a place of belief in a product or service. Choosing the franchise route, provides the branding and trusted atmosphere for potential customers to come to appreciate and fall in love with your services or product. It cuts out the process of building up a new brand and customer following for those who may not be well-versed in the industry.
5. Do you get adequate support from the parent brand?
Once you have narrowed your franchise to what type is best for you, it’s time to look deeper into the parent brand’s ethics, structure and support. This means speaking with the franchise’s original owners to discuss the finer details of what you can expect when buying into their brand. The relationship between the brand owner and franchisee is important as you need to work together to maintain the integrity and success of the business. The original owner wants someone who will keep up the high standards that customers expect from the brand. For the franchisee, you want to work with a business that offers sufficient support and development.
This also includes working with a franchise owner whose business goals and ethics align with yours. Take time to question whether you like what they do, how they promote the business and brand as a whole. Typically, as part of the business agreement, you must follow their lead and practices for your franchise.
You will also want to consider the financial support they will provide and what you have to bring to the table. How much will the franchise owners help you get off the ground, and what do you need to start? Ask about buy-in fees, required investment and expected ongoing costs. Who will be promoting your new franchise, are there ongoing marketing costs and are they compulsory? Once you have the details regarding costs, you can look into finance options for franchisees.
Finance options for franchisees
By implementing these tips, you can find a franchise that will unlock your potential as an entrepreneur. When you’re ready to take the next step, find out more about how we can help you with finance for franchises. You can also contact us for more information and advice on hire purchases, business loans and more.