Have you ever thought of running your own business but are not sure where to start? Franchising is a great way to work with an established brand, so here are my top tips on buying a franchise …
There are lots of franchise companies out there to choose from, each with their own products, services, branding and support. Some are national brands and others are spreading out throughout the country. But which one is right for you?
“How do you make the right choice?”
My advice would be to choose something which excites you as you’re going to be working on this business for the foreseeable future. You want something you’re excited and passionate about.
It’s also about support because you don’t want to buy a franchise from a company who take your money then leave you to get on with it. When looking at franchise businesses, carefully analyse the whole package to see if it’s right for you.
Here are my 8 top tips on buying a franchise:
What will you be getting for your investment? Do you pay your money and that’s it or is there ongoing help?
What is the initial cost of the franchise? Does it seem to be in line with other franchises of its type? Cheaper isn’t always better!
What support does the franchisor offer after the initial training and investment?
How much are the monthly management fees? Is it a flat fee or a percentage? Is it in line with other franchise businesses of the same type? What are you getting for your monthly management fee?
How long will it take you to build your franchise? How much capital will you need to live on until you are making a good wage?
How successful are the other franchisees? Ask to talk with other franchisees as a good franchisor will encourage this at the right time.
Look at the demographics of your area, if it’s a shop or restaurant think about the location and parking.
Franchise agreements are often in favour of the franchisor. That’s normal, but do check the renewal requirements and discover if there’ll be another investment required at this time? If in doubt get a franchise lawyer to look at it for you.
These are just a few things to think about before investing.
If you are thinking of buying a franchise and are maybe a little confused with all the choice, check which franchises are members of organisations like The Approved Franchise Association or The British Franchise Association.
Membership of these associations is no guarantee you’re buying the right franchise for you, but both organisations are there to help as each has standards the franchisors must maintain if they wish to keep their accreditation.
“Don’t forget The European Code of Ethics for Franchising!”
And finally, ensure the franchisors you are considering working with abide by the European Code of Ethics for Franchising. At the AFA, we ensure they do before we allow them to join.
If you’d like some independent advice about buying a franchise, please call on 0208 088 2400 or click here to send us an email enquiry and we’ll get back to you. You can also visit our website for further information.
Until next time …
P.S: Why not visit www.theafa.org.uk and find out more?