To Buy Or Not To Buy A Franchise… That Is The Question!

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You might have already had the dream of owning your own business one day!

There are a few ways to do this. One of the most proven and successful methods for sure is to do it through the franchising option. But for complete balance, it is fair to say that this option is not for everyone, and we say this because if we all get the ‘fit’ wrong, neither party benefits!

We hope this short article gives you some insight.

Why Would I Buy A Franchise?

You will have the benefit of a tried and tested, proven business system in exchange for an upfront fee which will include training to get you up to speed within a matter of weeks.

There’s no need to start from scratch in terms of branding either, as that is also included, and you will be able to use, from day one, under a clause called ‘Rights Granted’ (which means you can use the name under certain conditions whilst you remain a franchisee). Very little time is wasted in hitting the ground running, as you should be pretty much good to go at this point.

A franchise is by far more likely to exist for the longer term than going alone. If you do some research, you will find how shocking the statistics are for failure rates on independent business start-ups compared to the same franchising statistics. We believe that this alone is an excellent reason to buy a franchise; you increase your chances significantly of business success!

If You Want To Reduce The Business Risk, Buy A Franchise!

Think about the type of franchise that you feel you can be enthusiastic about; there is little point in buying a franchise to ‘buy a job’.

It is a well-known fact that happy franchisees perform better. Performing better means you generate more revenue, and this, in turn, means that the franchisor benefits greatly from your contribution to them by way of monthly income, which will, in part, complete the full circle for a very happy future together!

If you have decided on the type of franchise that you can really cut your teeth on, make sure you follow the initial recruitment process; after all, this is the very beginning of what you will be dealing with daily. So at the very least, show the franchisor that you can do what they are asking you to do. Failing to do this at the outset will show a red flag to them. As the best franchisors again look for the right fit (not necessarily your money!), your ability to deliver this at this stage is critical to the future potential success of joining the franchise.

Follow the process, ask questions, get as much information as you can about the franchise and what the next steps are. Feel comfortable in what you are being told, leave no stone unturned, but then think about this.

buying a franchise

Compare The Costs Of Going Alone, In Comparison To The Franchise Fee

Does this seem like good value to you? We would imagine, in most cases, and the franchisor should adequately be able to demonstrate this.

It is a common misbelief that franchising is all about selling ‘units’ and generating franchise fees. Unbelievably, this should not be the main prize for a franchisor; the fee element should cover the cost to get you launched, so the franchisor ends up with a willing franchisee in a localised area. Their goal is then to make each of you successful and, in turn, generate the royalties that come back to them. This is way more lucrative for them than any upfront franchise fee, so have a careful look at what is being offered and take a view on this point.

Review The Franchise Agreement Before You Part With A Single Penny!

The franchise agreement is a critical document and will advise you on your initial and ongoing obligations, and there will be plenty of them. Look at it as one way to ensure that you also maintain the standards and the brand gets protected, in the same way, that the next franchisee comes along and similarly has to adhere to it just as much as you do. So not only does the franchisor get protected, so do you as the franchisee.

Ask questions about the agreement. This can be done ideally through a legal representative specialising in franchising. It can be via a range of franchise consultants whose sole aim is to educate you through the entire franchising process to ensure you are the best fit for you as the potential franchisee and the franchisor. This is very important to them as they will want to demonstrate their ability to find high calibre candidates that are good for the long term in the franchise network.

franchise consultant

What Should You Look Out For?

There are downsides to franchising, just as there are with any business!

Please ensure you have enough capital to buy the franchise and cashflow to enable you to run the business. There are also financial incentives in the market place to get funding. These can usually be low cost, and if this gives you a buffer until cashflow improves, it should be considered.

As with any business, a franchise is typically not a business where you start on day one and have people ready and waiting for your products and services; you will get out as much as you put in. So be prepared to get back to basics, follow the process, and the rewards will come.

You will not have total control either. Remember why you are looking to buy a franchise; you want to side-step all the effort required to start your own business from scratch and have tools ready to roll out. The ability to do that will be protected and is mostly covered, as we mentioned above in the franchise agreement. So if you are minded one day to have a ‘light-bulb’ moment and change a few things, then a franchise might not be for you (it should be said, though, that some franchisors would be receptive to new ideas!).

Ask For Help!

Great news for you, as extra assistance from a franchise consultant should come at no cost to you! The franchise brand will mandate the consultant on franchise recruitment, but this shouldn’t just come at any cost. In other words, the consultant again is looking for the best fit rather than simply trying to make a sale. Use these people; they know the process far better than you, often represent the brand independently and will even guide you through the appropriate channels until you accept or reject the proposition.

Let’s finish this short article with this final point. Franchising in 2021 has rarely been this popular. It is widely reported that franchising has consistently grown through the last few recessions, yet the UK still has a much lower percentage than other developed countries. Now could be one of the best possible times to be involved; buying a franchise can be life-changing when done right!

This article was written by Richard Pakey, a franchising expert and Regional Director for the award-winning Lime Licensing Group.

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