Are You Ready To Make A Move From Employee To Franchisee?

19/02/2018 17:00 | Start a business

Employee to franchisee

There are lots of benefits of working for someone else. Regular wages, paid holidays, set working hours, and generally less stress. But, there are some downsides too. You don't have complete control over your destiny, you may not be paid what you think you're worth, and you must answer to someone else.

If youre ready for a change, then buying a franchise could be the solution you're looking for. You get the independence of small business ownership, with the support of a significant business network that has a proven track record of success. This all sounds good, but how do you know if you're ready to make the transition from employee to franchisee?

Before you jump straight into deciding which franchise is best for you, here are a few tips to help make the transition as smooth as possible:

Research more than just the franchise industry

Before you even start considering which franchise is the best fit for you, you need to do some research on yourself. If you don't know what it is you want to achieve from franchising, it can be challenging to find the perfect franchise business.

Start by giving some thought to what you want to get out of buying a franchise? It could be one of many reasons. For example, do you plan to continue to work as an employee while you run your franchise business as a hobby? Is this going to be your primary source of income or just a way of earning a bit extra? Do you eventually want to own more than one franchise?

Only when you can honestly answer these questions will you be able to select the right type of franchise to allow you to achieve your desired outcomes.

Do you understand how much you can afford to invest? You might have your heart set on opening a particular type of business, but it may be unrealistic when you consider your budget compared to the average investment costs in that sector. Even when you do have a better idea of what franchises are in your price range, remember thats very unlikely that youll start to make a profit from day one. Even successful franchises take a while to become profitable, so plan to have enough working capital to live off while you get off the ground.

Finally, think about what youre good at. Weigh up your skills, previous experiences, and what you have a passion for. Although it can help to have the right skill set to run successful franchises, its not always a requirement. The training and support youll receive will ensure that youre fully prepared to take on the franchisee role, even if youre a complete novice.

What does matter though is what you like, or feel comfortable, doing; and what you dont. If customer service skills dont come naturally to you, then buying a franchise in the retail sector probably isn't for you. If you like the company of other people around you while you work, then a home-based franchise is perhaps out of the question.

Know what to look for; and what to look out for

Youll be able to tell a lot from a franchisors website before you even get in contact with them. If the information they provide is professional, clear and transparent, then its usually a good indication of how they run their franchise as a whole.

From online research, youll also be able to find out if the franchisor is a member of the British Franchise Association (bfa). The bfa was founded in 1977 and promotes standards of ethical franchising in the UK. If a franchisor cant meet these standards, then they cannot join. Its not merely a case of paying a membership fee.

So, if a franchisor has been granted bfa membership, you can be sure that theyve developed a robust franchise model and have a proven track record of success. This stamp of approval should give you peace of mind that you're joining a fair and ethical franchise that has passed strict criteria set by the bfa.

Develop a financial plan

When you know which franchise is right for you, establish how much the franchise fee, and set up costs will be and create a plan to achieve this amount. If youre still in paid employment, find out how much your contribution to the set-up fees will need to be, and save for this.

There are a variety of funding options, but most require a personal contribution to the fees. And, don't forget about that need for working capital to cover business-related and personal expenses until your new franchise starts to fund itself.

Prepare for the transition.

It can take months from your decision to own a franchise to the day you start trading. During this time, you need to perform due diligence on your chosen franchise, have multiple meetings with the franchisor, complete all the relevant paperwork, consult specialist franchise professionals and attend pre-launch training.

This is all very time consuming, but you may also need to continue working during this time to earn a wage. If this is the case, then consider reducing your hours with your current employer. This will enable you to dedicate the necessary hours to franchise related tasks, while still being able to cover your expenses.

Talk to your family.

Many entrepreneurs underestimate the importance of the support that their family and friends provide when starting a franchise. To become a successful franchise, its crucial that they understand what will be expected from you and be there when you need them.

Involve loved ones throughout your whole decision-making process so that they can appreciate the amount of blood, sweat and tears that may be shed while you're getting your new business up and running.

Get ready to be the boss.

When you become a franchisee, youll be required to follow the rules of the franchise model and meet financial obligations. But, remember, youre still the boss. The day to day operation of your new franchise will be your responsibility.

Make sure you keep up with the latest industry trends, recruit well, and take advantage of the support that your franchisor offers. Most of all, enjoy the flexibility and freedom that comes with being a franchisee.

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