Investing in a franchise can be a great decision for entrepreneurs. Rather than building a business from scratch, you benefit from the brand recognition and marketing power of a more established business, as well as a model to follow to run the franchise profitably.
But it’s also no guarantee of success and buying a franchise without fully understanding what’s involved can result in your new business failing. Researching franchising and considering whether the franchise model is right for you is the only way to confidently make an informed decision about whether to invest or not.
Increase your understanding
This is where the Prospect Franchisee Certificate (PFC) comes into play. It was launched in October 2016 by the British Franchise Association (BFA) and Lloyds Bank to give potential franchisees an overview of the franchise industry. It includes tips on how to assess different franchise opportunities, as well as advice on business management and the financial and legal considerations of franchising.
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What is the Prospect Franchise Certificate?
The PFC is a free course made up of 13 online video modules. Each module has a test at the end, which must be completed with a 100 percent pass rate before the certificate can be achieved. The PFC covers a range of topics, including:
- What is franchising?
- Franchising opportunities and how to evaluate them
- Legalities – confidentiality, deposits and the franchise agreement
- Business planning, financials and banking relations
If you’re considering buying a franchise, this eLearning course should form an essential part of your research. It’s doesn’t cost a penny, it’s jargon-free and could help you stand out from other prospective franchisees.
You can register to complete the course at www.bfa.trainme.tv.
How will you benefit from the PFC?
Understanding of the world of franchising
Having more awareness of what’s involved in all areas of franchising is a huge advantage for anyone considering joining the franchise sector. Being a franchisee is very different from being an employee in a company or even being an independent business owner. Knowledge is power, and you’ll have a comprehensive appreciation of whether being a franchisee is right for you once you’ve used the PFC.
Standing out from the crowd
With social media and third-party franchisee recruitment websites now playing a much bigger role in promoting the benefits of franchising, awareness of the industry has increased. But anyone can express an interest in a franchise without having performed any research into whether the company, or even the sector, is right for them. The completion of the PFC demonstrates to prospective franchisors that an applicant is serious about wanting to become a franchisee and, therefore, makes them a more attractive candidate.
The more informed potential franchisees are, the more detailed the questions they will ask their prospective franchisors. This will ensure that there will be no surprises when it comes to signing the franchise agreement, which is better for both franchisors and franchisees alike.
What other resources can the BFA offer prospective franchisees?
The British Franchise Association website is full of useful information about all aspects of franchising. There, you’ll find an array of guides and directories to help you make a decision about your future as a franchise owner.
When you’re researching franchises invest in, the BFA has a comprehensive directory of franchisors who are looking to recruit, with an overview of the company provided. Membership of the BFA is an indicator of a quality franchisor who has volunteered to be assessed against the BFA’s codes of business practice and successfully achieved the required standards. If a franchise is included on the BFA directory, you can be confident that it has a proven business model with a track record of success.
There are also four BFA-approved exhibitions each year. These events are one of the most effective and efficient ways to conduct your research into investing in a franchise. When you attend one of the exhibitions, you can be safe in the knowledge that only members of the BFA can promote their franchise there. So, you'll be able to speak confidently to franchisors from a wide range of ethical brands, business types and investment levels.
As well as the Prospect Franchisee Certificate, the BFA also runs seminars specifically designed for franchisees. These seminars are educational sessions that give you the chance to find out what a day in the life of a franchisee looks like, and they’re an excellent source of information about all things franchising. Unlike franchise exhibitions, where tickets tend to be free, delegates that attend seminars will pay a fee, but it’s money well spent. Find out more about the advantages of these events in our What are the benefits of attending a BFA seminar? article.
How can you help yourself?
As well as attending exhibitions, completing the PFC and performing thorough research into franchising, you can also help yourself by working out whether you have the right personality, skills and attributes to be a franchisee. Ask yourself the following questions before you start your franchising journey:
1. Can I conform to someone else’s rules?
If you’re good at following rules and you like order and structure, it’s likely that you’ll make a great franchisee. Franchising relies on entrepreneurs being able to take an established business model and replicate it.
Of course, there will be variations from unit to unit, as the conditions differ depending on the location and local market but, on the whole, franchisees need to be able to stick to strict rules and uphold high standards. Not only will this give the franchisor confidence that their business units are all providing quality products or services, but it will also ensure that consistency is maintained across the network.
If customers or clients can trust that the business provides the same products and experience in all its branches, it should have a much better reputation than it would if the quality was hit and miss. If you can understand this, and follow the franchisor’s rules without becoming frustrated, franchising could be for you.
If you’re more of an innovator, you’re probably more suited to running your own business. In franchising, it’s all about the greater good, and sometimes this may mean sacrificing something that’s in your own interest in order to benefit the company as a whole.
2. Are you a people-person?
As a franchisee, it’s very likely that you’ll be dealing with employees and customers or clients on a daily basis. Because the business model is provided and many of the strategic decisions are made by the franchisor, your focus should be on running the franchise to the best of your abilities. Your success will largely be determined by how well you can manage your staff and how you treat your customer base.
Therefore, not only will you need to have leadership skills, but a sociable nature too. Your employees will look to you for inspiration, and you’ll be responsible for making sure they are working efficiently. You should be able to boost your team’s morale when they need it and provide one-to-one guidance if you deem it necessary.
As a result, you’ll need to be able to talk clearly and frankly, with compassion and understanding. This can sometimes be a difficult balance to strike, so it’s vital you are capable of it if you’re to maintain a happy, healthy workforce that doesn’t feel alienated or neglected.
You should also have the people skills and willingness to interact with customers or clients. Often, providing a personalised service goes a long way, as customers will feel valued. To do this, you’ll not only need to be sociable, but willing to carve time out of your day to talk to others. This aspect of the business is often overlooked, as franchisees focus on expanding their business, but basic interactions are vital if you’re to cultivate high customer satisfaction levels.
3. Am I experienced?
If you’re very experienced either in the industry you’re looking to join or in business ownership, going it alone may make more sense. You’ll have more control over your business, and will be able to introduce your own ideas and keep all the profits.
However, if you’re less experienced, the additional support provided by a franchisor could really help. Instead of starting from scratch, you can take advantage of the franchisor’s expertise, as well as their proven business model and recognisable brand.
This makes some franchises a fantastic opportunity for those looking to jump into a new sector. They don’t need to spend time getting years of experience under their belt or waste money enrolling onto vocational courses, as the franchise provides all of this as part of the induction package.
4. Do I have the time to commit?
Like any business, a franchise is a big commitment. Ask yourself whether your personal circumstances will allow you to dedicate the time and effort that’s needed to make a franchise a success. Even if you buy a part-time franchise, you’ll probably need to put in a lot of hard work in the initial stages. This could mean working evenings and weekends until your unit is off the ground, so make sure you’re able to dedicate this time if you want your business to be a success.
Alice Tuffery, Point Franchise ©