10 Steps for Choosing a Franchise Business
Thursday 12th July 2018
Have you decided a franchise could be a good choice for you? Then knowing what to do next can be the difference between failure and success. There are some important considerations to take into account, once you have made the decision of going the franchise or non-franchise business route. Here are 10 steps for choosing a franchise business:-
1. Research Options
Make use of online franchise directories, franchise shows and franchise publications to research the options available. There are hundreds of franchise opportunities on the market so make sure you look for something you will enjoy doing and that will suit your lifestyle and budget.
2. Make a shortlist
After research a number of franchises you might be interested in, draw up a shortlist of 2 or 3 that you could seriously see yourself doing. Request their franchise information packs either via online contact request or give them a call.
3. Research Background
It’s important to know who you are dealing with as you will be making a substantial investment. Take some time to find out the franchise companies trading history. You may also wish to research the directors of the franchise companies and find out what other ventures they have or are currently are associated with. You might find online tools such as the Companies House website useful.
4. Meet the Franchisors
Once you feel fully informed about your shortlist of franchisors, its time to contact them and arrange to meet them. Visit their head offices and get a feel for their setup. Whilst you are there, ask for contact details for a few of their franchisees as references.
5. Speak to Franchisees
Contact your list of franchisees and ask them questions about how the franchise works for them as a business. Are they trading profitably? Would they buy the franchise again given what they now know?
6. Research Funding Options
There are several routes to funding. You may have your own capital to invest from savings or a redundancy. Other options might be an external investor or major high street banks. It pays to talk to a bank manager anyway, lay out your business plan and get some valuable feedback as to what funding potential you might have.
7. Get Professional Advice
Some people decide that they want some professional assistance in the research and buying process. For this reason, there are specialist franchise consultants that have a broad knowledge of the ins and outs of franchising and can assist with matching you to a franchise that will work best for you in addition to helping the process go through smoothly.
8. Get Legal Advice
You will have to sign a franchise agreement once you have decided on the best franchise for you. It’s important to take proper legal advice from a franchise specialist lawyer who can ensure that any legal requirements are met and to help you understand the legal agreement you will be entering into.
9. Gut Feeling
How you feel about starting your franchise cannot be underestimated. It’s normal to have alot of questions, especially as you get close to making a decision. The franchisor, and any other franchise professionals you consult during the process should be able to offer answers and help you along your way. However, if you feel alarm at any point, take a step back to work out what you are worried about and resolve it before moving forward.
10. Now for some good old fashioned hard work
A franchise business, like any other business, will require hard work. Don’t be fooled into thinking that a franchise will work automatically just because its a ‘franchise’. A franchise provides a proven system… but the system must be worked hard in order to build a strong and profitable business.