You might be reading this article because you have fallen into the ’employment trap’ and now need to remove yourself from it. You have decided that a guaranteed regular income, and the perks that come with a job, are no longer sufficient for you. After all, sometimes it is not just about a great salary; post-pandemic behaviour has taught us that, hasn’t it?
However, what are the steps from moving where you are right now to purchasing a franchise? This short article is just for you!
There Are Three Ways To Owning A Business
For completeness, these are: starting your own business, literally from scratch, you could even buy an established business, or you can buy a franchise. Everything seems simpler, don’t you think when you see it like this?
Each of these options will get you the outcome you need to be able to morph out of employment, and each one will have its very own set of challenges. For now, we shall focus on franchising, which can be a brand new franchise or an established franchise, often referred to as a ‘franchise resale‘.
Why Look To Buy A Franchise?
The fact is, the whole point of a franchise is that it is a proven model, and you might well want something that you know has a much higher chance of success than going out there on your own. Check the facts for yourself; very little else has a higher chance of success than franchising can bring you.
It is fair to say that there still needs to be some further checks on the modelling to ensure it will be appropriate for where you want to operate. However, this can often be done with mutual market research, which will satisfy both yourself and the franchisor.
How Will You Fund Your Franchise Purchase?
Look at the initial cost to purchase, should you be ‘awarded’ with the franchise opportunity.
There will be initial and ongoing costs to consider. This is just part of what financial outlay you can expect, but what about behind the scenes? How much cash do you personally need to carry on with everyday life; you must factor this in now. Failure to do so might mean you will put undue pressure on not only yourself but your family and then, of course, on the business itself, and under-funding any business entity will never end well!
Weigh-Up The Pros and Cons Now
A new franchise will be lower cost. Quite simply, the franchisor will be looking to recoup the cost of getting you started at your expense, as well as covering their own costs to provide ongoing assistance; they do incur costs, which are often initially recouped by way of a ‘franchise fee’.
On the other hand, a franchise resale will be a much higher cost. This is because the current franchisee has started this usually from scratch, spent some time developing the franchise in their given territory, and you can simply pick this up from where they are leaving it.
Think of this as your way to leap-frog all those early years of learning and the costs that come with it! In exchange, you will have to expect to pay the previous owner for the benefit of that learning curve’s goodwill. By the way, this article does not discuss any form of business in distress; that is an article for another day!
How much does the new or existing franchise need to be able to grow? Now you will have to think about advertising and marketing costs. The franchisor will assist you so you can have ideas on where this is best spent to achieve some returns to ensure it is all repeatable and scalable.
Can You Do This On Your Own?
Only you know the answer to this question! The things to consider should include the following:
Do I have the personality trait to follow a system? Some people do not, this is not all bad, by the way, but you might not be best suited to having a franchise.
Can I commit for the longer term? Many franchises could well be a five- or ten-year renewable term. Does that suit your circumstances? You do not want to enter into a franchise agreement if you think this will simply be something to do while finding a job.
Do I have the initial and ongoing funds? There are many businesses out there that are great businesses; they are even profitable but fail. Often they fail because they run out of cash. This is not good news for you in business life in any event, certainly not with a franchise.
How To Find The Right Franchise For You
You might well be in the right place just by reading this article. Many franchise directories, such as where you found this article, list many franchise options, so why not see what matches your investment level or business type?
Whether you see yourself wanting a part-time or lifestyle franchise or full-time, of course, quite often, you can select these fields as a starting point for these portals to choose what they think might be a match for you.
From this, you should make your enquiry, and just like when you are in a franchise, the process from here is pretty well systemised by the people you are making your enquiry with. Follow the process, and you will be in good hands.
The franchise community is also very friendly, ask anyone for an opinion, and I’m sure they will be only too happy to assist!
This article was written by Richard Pakey, who is a franchising expert and Regional Director for the award-winning Lime Licensing Group.