Reading Time: 3 minutesWhen it comes to working for yourself, many of us consider getting involved with a franchise. However, to be able to succeed in this area, it is important that you understand precisely what a franchise business is and what one does.
Franchises in the UK
A franchise is an opportunity that offers people the chance to trade under an established business’ name, with the aim of offering a product or service from a brand that is already trusted by the consumer. To purchase a franchise, you are expected to pay a franchise fee to the established business as well as a percentage of the revenue you make. In return, you can trade using their name and often get support to ensure your new franchise is a success.
Types of Franchise
There are three main types of franchise available in the UK, meaning that you can select the one the best reflects your interests and experience:
This is the most common franchise available in the UK and involved a business becomes a franchisor and gives a franchisee a licence to trade under their name. With this type of franchise, you will get to use the franchisor’s business model, business tools and receive a support package that has been created to ensure that the new franchise is successful and follows the brand rules.
Product Distribution Franchise
A product distribution franchise is created when the franchisor gives the franchisee the ability to see their branded goods and supplies a licenced logo that the franchisee can use to drum up business. Unlike the business franchise model, you will not get any support from the franchisor on a day to day basis and will be expected to find your own revenue streams from the outset.
A manufacturing franchise is when a franchisee is licenced to sell products and services using the brand owned by the franchisor. This type of franchise is especially common in the food industry when franchises buy a franchisor’s product and then sell it on.
Is Starting a Franchise a Good Choice?
Many people find themselves interested in starting their own franchise but get put off by horror stories or misinformation that can be found online. In reality, a franchise is a great choice if you are willing to put the time, effort and cash that is needed to make a business work.
Starting your own business is not easy and will require long hours and lots of work in the first stages, but this can be mediated when you decide to franchise as you are essentially buying into a business that is already successful. Whilst you will still need to work hard, most of those initial steps will come with support and guidance so that you can learn all about your new business, knowing there is someone at the end of the phone if you stumble.
One of the most attractive parts of owning a franchise is the fact that you will be able to tap into a customer base that knows your product and wants to purchase it. In addition to customers, you will typically get all necessary training and support as part of your franchise fee, making it as fail-safe as is possible.
What Are the Pitfalls of Franchising?
As with anything good, there are always points that need to be considered, and franchising is no different. Going in with the idea that you will hit the ground running is unrealistic and whilst a franchise has the potential to be a success, you will need to plough a lot into it to make it work.
Firstly, you need to consider the time commitment that you will need to put into owning a franchise. The initial stages will require you to get to know the product, undergo training, put a team together and map out how your business is going to run. On top of all of this, you will also need to be making money, selling your product, and this can be seriously time-consuming in the early days.
You will also need to have enough working capital to get hold of a franchise in the first place. Franchise fees can be expensive, and it will be some time before you make a return on your investment. Franchising is not about making a quick turnover, but more a valid business enterprise.
It’s also important to remember that franchises tend to come with strict corporate rules, meaning you will need to follow the brand story rather than coming up with your own sales initiatives. If you want a business that offers an individual point of sale, then a franchise is not for you!
Where Is the Best Place To Start a Franchise?
Lots of people worry that they will need to relocate in order to start a franchise, but this is not the case. There are many franchise opportunities all over the UK; all you need to do is research what is out there and then decide which opportunity suits you the best.
If the franchise you want isn’t in your local area, then don’t give up; contact the franchisor and suggest a franchise in your location along with your commitment to making it work. The only reason they would refuse would be if they held a genuine belief that it would not be a viable location.
Thriving UK Franchises
If, after reading this, you are still interested in opening your own franchise but aren’t sure where to start, then it is worth checking out some of the thriving franchises that are out there. The franchise market in the UK is booming, with new franchises popping up every day. Here are some of the most famous:
Where Do I Begin?
Are you convinced about opening your own franchise in the UK?
If so, your first step is to do your homework and find a range of franchises available in your area. When you have done this, you can start looking into them and find your perfect franchising opportunity.