The right way to identify the franchise of your dreams
Making a decision to invest in your future and build a business is a big step to take, especially as it can be fraught with risk. Investing in a franchise model can help to mitigate some of that risk, but next to buying a house it's likely to be one of the biggest investments you make. So, how do you choose the right franchise for you?
There are literally thousands of successful business models that you can buy into and narrowing it down can be a full time job in itself. To help here's our top 8 tips on the right way to identify the franchise of your dreams.
1. Identify your core values
Before you even begin to look at franchises, it is a good idea to understand what makes you tick. What brings you happiness? What keeps you motivated? What don't you enjoy? and What demotivates you?
Just because a coffee shop may look profitable, it doesn't mean that you are going to enjoy the rigid opening hours or the need to manage multiple staff. That's why it is essential to be realistic with yourself and find a franchise opportunity that will suit your lifestyle and life goals or in other words your core values.
Are you someone who enjoys helping others or someone who enjoys caring for pets? Do you have a passion for customer service or would you rather build a network of B2B clients?
All of these types of questions are good questions to ask yourself and writing the answers down will help you to narrow in on the type of franchise that work best for you.
You can also find free online tools and articles to help you narrow in on what your values actually are, such as this one from Psychology Today - https://www.psychologytoday.com/gb/blog/changepower/201811/6-ways-discover-and-choose-your-core-values
2. Research, research, research
Now you know your values, it's going to be much easier to identify a type of franchise. If caring for others is something that drives you, then look at franchises within the healthcare sector. It sounds obvious, but it can be very easy to be distracted by a business that you think could return profits quicker or their product is something that you enjoy consuming on a regular basis.
Speaking of finances this is one of the quickest ways to shorten your list of potential franchises. Have a rough idea of what would be affordable to you including cost of living and overhead costs of running the business. You should then be able to quickly discount a good number of businesses that don't match with your budget.
You should also think about whether the sector has a buoyant market with longevity, and potential for growth. Research articles about running a business in this area and what challenges it may soon be facing too.
By now you should find it easier to choose say 20 franchises to look at in more detail. You can narrow your list further by identifying whether they are affiliated to a reputable franchise association, such as the BFA. This is important as their members are required to adhere to strict ethical guidelines. These sites can also be a good place to find out more information about particular brands.
Other things to look at include:
Do they have a digital presence beyond their website?
Use Google, review portals like Trustist and social media such as LinkedIn to research companies and their business leaders. Are there any stories that may put you off working with them.
How long have they been established?
Using LinkedIn, see if their franchisees tend to stay for the full term of the license
Read through the franchise brochure in detail, many franchises will let you download or request a copy on their website.
In terms of where to look for franchises that are available here's a list of a few sources:
3. Adopt a system to question franchisors
Each franchisor will have a different process that they will take you through to discover their business, but it can mean that a one franchise may miss the information you really need to make a fully rounded comparison against another franchise.
A good idea is to adopt a systematic questioning style. Create a list of important questions that will help you to fully understand the opportunity that each franchise is offering and make sure you get the answers. If a franchisor unreasonably hides information from you, run a mile, you need to be able to trust the people you are going in to business with.
That said, don't expect them to share with you their "secret sauce" before you've signed the franchise agreement.
Questions could include:
- What does a typical business plan look like over the first few years?
- What support do you offer?
- What will I be responsible for in running the business and what will the franchisor do?
- What are all of the fees going towards?
- Can I see a draft copy of the franchise license before making a commitment?
Reputable franchises will happily share this information at some point in their process, however you may need to sign a Non Disclosure Agreement to gain insights into more sensitive information
4. Meet the support staff
This is one of the most important things to do. Entering in to a franchise license agreement, will mean that the success of your business is partly reliant on the people who provide the support.
There will be challenging times, like there is in building any start-up business. However, if you have a good working relationship with the individuals who provide you with guidance and support you can overcome them and find the path to success.
That support and guidance is likely why you're buying in to a franchise in the first place, so it's essential to know who they are and if you can work with them.
Many franchises will offer discovery days, but if you're not getting to see people who will be supporting you, ask for a one-to-one at a later date.
5. Understand the financials
The franchisor should give you all of the information you need to be able to build a detailed business plan. This should include information about revenue generation, set up and operating costs and volume of business to expect, as well as anything else relevant.
Make sure you build out your own business plan. The franchisor may help by providing a template, which is useful, however the numbers you enter in are directly related to the level of activity you expect to put into the business.
For example are you going to do any additional marketing, that perhaps the franchisor hasn't included in their plan? Do you already own relevant assets that mean your costs could be lower than suggested?
Once you've created your plan, it's a good idea to check with the franchisor that it is a realistic plan.
Creating this plan will also help you if you are planning on sourcing funding from a bank.
6. Speak with current franchisees
Who knows what it is like to be a franchisee of a brand better than the current franchisees?
Speaking with them will help you to get a good insight into what the business is like on a day to day basis and how well the franchisor supports them.
Again having a systematic approach to questioning will help you to get a fair comparison across brands.
One thing to remember though is that you might catch the franchisee on a bad day, so make sure you speak to a few from the same brand to get a true representation.
7. Trust your instincts
At this point you should only really be considering 2-3 franchise brands and they should all be good options for you. A good thing to do is to discuss these brands with your family, friends and peers to get their point of view. However, it might still be difficult to determine, which one is likely to be best for you.
You have to follow your gut instinct. If you don't you may always have that nagging doubt that you made the wrong decision. Your instincts are usually right because they are an embodiment of your experiences, feelings and knowledge. It's like guidance from your subconscious self pointing you in the right direction so don't ignore it.
8. Get the right legal advice
Finally, and before fully committing by signing a franchise agreement, get legal advice from a franchise affiliated lawyer to make sure that the contract is fair for both parties and is robust enough to have a sustainable working relationship for the entirety of the license agreement
You wouldn't ask your conveyancing lawyer to write up your will, so don't do it in this scenario either.
Again the BFA have an established list of trusted legal advisors that you can find here - https://www.thebfa.org/affiliate-directory/
So that's it! Hopefully this has given you some useful advice, but remember if you have gone through this full process and still haven't found the right franchise, you don't have to commit. You can start the process again, but this time with more knowledge of the franchising sector.
It could also be that none of these businesses in franchising are right for you. In fact it's clear that franchising is not for everyone. Those who don't enjoy following a structured plan and processes won't enjoy being part of franchised organised.
That's why it is so important to know your core values, before you decide to invest in any new business opportunity.
Good luck in your search and we hope you find the franchise opportunity that's right for you.