Franchising 101: Are You Ready to Become a Franchisee?
One important question you should ask yourself if you’re wondering how to become a franchisee is ‘Am I Ready?’. Today we’re going to explore exactly what ‘ready’ means and how you can prepare yourself to start a franchise.
It can be tricky to know when, or if, you ever feel ready to start a franchise, as life’s big decisions can feel pretty daunting. But readiness means something different to everyone. To one person, it could mean ‘am I financially prepared and ready to invest?’, while another person might be asking themselves ‘am I confident enough to run my own business?’. Of course, only you can know if you’re truly ready to take the plunge and become a franchisee, but here are five of the best ways to know you’re ready.
Becoming a franchisee sounds exciting rather than scary
It’s expected you’ll be a bit apprehensive when making a big life change, but the prospect of becoming a franchisee should fill you with nervous excitement rather than flat-out dread. If you genuinely feel frightened, you might not be ready to take the plunge just yet.
Ask yourself why, exactly, leaving employment or study to start a franchise frightens you so much. Maybe you feel like you’re too young and would benefit from a few more years’ experience in your chosen sector. Or perhaps you feel like you wouldn’t be able to manage everything alone, so could you team up with a partner, family member or friend instead?
It’s totally normal to feel this way, but it’s important to confront your fear head on if you stand any chance of succeeding. Sometimes, your fear is trying to tell you something. While nagging doubt can just be a side effect of low self-esteem, it could also be intuition telling you a certain franchise isn’t right for you. Keep looking until you find the ideal opportunity that makes you feel inspired and excited, rather than terrified.
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You’re happy to follow the rules
Franchisees have a lot more freedom than employees, as well as endless other benefits like keeping most of their profits for themselves and virtually unlimited career progression opportunities. However, the difference between starting an independent business and a franchise is that you will have to follow some rules about how you run things day-to-day as set out by your franchisor. These guidelines ensure consistency across the franchise network and make sure you can replicate the success your franchisor enjoyed with its first location.
If you’d prefer total control over every aspect of your business, you might get frustrated having to listen to someone else’s vision and fall out with your franchisor. That’s not a good idea if you’ve invested a six-figure sum in a franchise you’re tied to for half a decade. There’s nothing wrong with being headstrong and particular, and some franchises offer greater flexibility as part of their business model. But be honest with yourself – if you’re leaving employment because you like to march to the beat of your own drum, will you be happy taking any direction from your franchisor, however minimal?
You want more flexibility
Sick of the 9-5 or shift work? Wish you had more time to spend with your kids, partner and friends? A franchise could be the ideal solution. One of the most appealing prospects of a franchise is that you’ll be your own boss, so you can set your hours however you see fit. You’ll enjoy the most flexibility with a home-based franchise, as you have no premises with set opening hours or staff to rush in to greet. However, most franchises are more flexible than employment by their very nature.
Let’s say your franchisor asks you to take client calls between the hours of 9am and 5pm. There’s nothing to say you can’t take those calls on the golf course, over coffee with friends or from the comfort of your bed. Similarly, if the franchise you’re interested in requires you to put in the equivalent of full-time hours of client work per week, there’s nothing stopping you squeezing that work into three or four days, or spreading it out over seven days, to fit your lifestyle and commitments.
You’re financially ready to invest
Being financially ready doesn’t just mean you’ve scraped together the franchisee fees. It’s about making sure you’ve got a solid chunk of savings or liquid capital in assets that you can easily access to see you through the transition period. Experts recommend saving the equivalent of six months’ salary, if you can. Of course, you don’t need to have five- or six- figure savings before starting a franchise, but make sure there’s another good source of income in your household that can comfortably cover the bills. Even the best franchises won’t see you turning a profit straight away.
Many franchises offer funding help so you can get started quickly and pay back the initial franchise fee over the course of the next few years. This option can make franchising much more feasible, as it reduces the need to have a huge chunk of cash ready for investment. If you go for this option, you’ll need to be sure you can afford the repayment terms. Chat through them with your franchisor and get a clear idea of when your franchise is likely to be generating a decent turnover, as well as how quickly you’ll be expected to start paying back any loan.
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You’ve given it time
It’s so easy to get wrapped up in the excitement of becoming a franchisee that you rush in and sign within hours or days of hearing about an opportunity – but it’s definitely not a good idea. You need time to think logically about whether a franchise is right for you, as well as time to go through all of the information you’ve been given. It’s also foolish to jump in before you’ve gotten a professional opinion from both a lawyer and accountant (or just a lawyer if you’re not willing to pay for both).
Letting an idea sit for a few days or weeks can also help you think more logically about it and decide if it’s really for you. You might have been drawn in by a franchisor’s sales prowess or exciting promotional materials. But when you’ve had a few days to cool off, it could become apparent that a key part of a franchise just isn’t ideal for you. Make sure you also speak to trusted friends and family about the decision and get their opinion on if it’s a good fit for you. A legitimate franchisor won’t rush or hassle you to make a decision before you’re ready, so take all the time you need to properly think things through.
Take the plunge
Hopefully, this article has given you a better idea about whether you’re ready to become a franchisee. Ready to start your search? Our UK Franchise Directory has hundreds of exciting opportunities. Or, continue your research by checking out our other franchise articles.
Sophie Cole, Point Franchise ©
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