Should I Consider Buying A Franchise?
You are almost certainly reading this because you want to be more in charge of your own future. And then you ask yourself how you go about putting yourself in a position whereby you’re totally in control of your own destiny. Could buying a franchise be one way of having your very own business to achieve this? Let’s consider why you should buy a franchise, or not, in this short article.
What You Need To Know About A Franchise
This can be more complicated (if we let it). However, the basics are that, you, as the franchisee, are given the ‘rights granted’ to operate and trade under the brand name, or franchisor. This is once you have paid their fee and undertaken the appropriate training as requested by them.
You may even trade under a similar name as the franchisor, which by the way, does have a direct benefit to the franchisor! Although you might possibly have a legal business set-up which protects both parties from one of you purporting to be the other.
The benefit of operating under the umbrella of a much larger business does have commercial benefits. You might also have personal desires to run a business that has more people involved that you can utilise. This of often why people look into franchising as a business option: ‘to be in business for themselves, but not by themselves’
Can I Operate As I Wish Under A Franchise?
All franchisors will have a very high level of control of how the franchise can be run. After all, you are paying partly for their knowledge and expertise, and for this reason, they will have standards that they need maintained.
You might see this as a little one-sided. However, careful consideration should be taken here, because you need to be thinking more about how the brand is being protected. Rather than seeing this as a disadvantage, this should give you some increased confidence that any future potential renegade franchisee would not be able to damage the franchisor. And indeed neither you, down the line!
There should be more longer term benefits of why you should be joining a franchise entity that going alone. Areas such as future development of the business and people will also be great areas to research.
How Could A Franchise Benefit Me?
This is probably not the question to ask if you are exploring various options. But it is one you will no doubt have in your own mind of course!
If you know the type of franchise you want to buy, you will want to know that it is already successful. Part of any initial fee you pay will cover an acknowledgement that they have something that you want to buy, in order to help you build your own business faster than you might have otherwise if you have gone alone.
All credible franchisors will know what works and what does not. This includes the best marketing and other advantages by being part of a national entity (if they are a more mature franchisor). These are just some of the elements that might be covered as part of your initial enquiry. If not then, then these will be discussed within your initial training. Before you commit to any franchise, you should be asking yourself whether you can do this on your own. And determine what value you personally would put in having all these things done for you. Those elements and associated costs are just one reason why it might be worth paying for a franchise instead!
Can You Do This Yourself, What Are The Costs?
Contrary to popular belief, despite what you might read, franchising is unregulated in the UK. The why’s and wherefores are probably a topic for another day. This can both be an advantage and disadvantage for you. Most might argue that compared to other developed countries, where franchising is even more popular than in the UK, they have to operate franchising in a highly regulated way. And the UK route is more advantageous to everyone.
Be prepared to have a lengthy review of any documents that the franchisor sends you, not least the all-important franchise agreement. They are often prepared quite logically for anyone to read and interpret. But if not, there is plenty of available assistance out there who specialise within franchising.
What Could Possibly Go Wrong?
It is fair to say that franchising is not for everyone! Like any business, you must ensure that you have enough capital. Not only to buy the franchise, but to operate it with healthy cashflow, as well as having enough behind you to support the lifestyle you have become accustomed to. Failure to be well capitalised can be extremely damaging for you and the franchisor. This will be covered by a clause in any franchise agreement.
This is not intended to suggest that all franchises are expensive to start and maintain, far from it. In fact, today there is even Government support by way of Loans to help you get started. This means that you might not even need any of your own cash to start a franchise!
Get An Expert Opinion
There are franchise consultants to help you find and secure a franchise, often earmarked with ensuring the right ‘fit’ for both parties, franchise consultants will be appointed and paid by the very franchised operators you are looking into and will almost certainly cost you nothing to engage with them, above all, they are a friendly bunch, you will find this to be the case in most parts of the franchise sector too!
I hope to see you join the world of franchising very soon!
*Richard Pakey is a franchising expert and Managing Director for the award winning Lime Licensing Group. Richard can be contacted in the following ways:
Mobile/text/whatsapp: 07904 697591