Are you ready to become a franchisee? Check out our checklist
If you’re thinking of becoming a franchisee, there are a few things you'll need to consider before you sign up. The decision to start a new franchise will commit you to an extended period of hard work and long hours. It requires that you be absolutely sure of your choice and that you understand exactly what your decision entails. With our franchisee checklist, you can check whether you’re ready to make the jump and run your own business.
Are you looking at accredited franchises?
Though not all excellent franchise opportunities will be associated with a national franchise association, the vast majority will. In Britain, the British Franchise Association (bfa) is the national body that ensure ethical franchising practices are followed and that maintains standards across the industry. If a franchise isn’t associated with the bfa, you may want to consider why that’s the case. Though there may be a perfectly good reason, it’s a sensible idea to dig a little deeper and ask questions of the franchisor.
Have you tested your suitability?
Becoming a franchisee requires particular characteristics and a unique approach to business. Not everyone’s suited to the franchise model and many business-orientated individuals who have achieved success elsewhere, will not feel comfortable in the role of franchisee. One of the best tools for testing your suitability is the bfa’s online Prospect Franchisee Certificate (PFC). This free piece of software runs you through the various skills you’ll require as a franchisee and tests whether you’re likely to flourish or flounder in the position.
Have you done your research?
Extensive research is essential if you're to make an informed choice between franchises. Not all the relevant franchise information is immediately available, and it's usually necessary to request additional details from the franchisor. Try and look at other sources, too. The bfa retains incredibly useful information relating to their affiliated franchises, while numerous other online resources will offer insights into franchise financial performance, franchisee satisfaction, and closure rates.
Can you afford it?
One of the most important questions you can ask yourself is whether you can actually afford to make a proper go of it with your chosen franchise. While you may have the funds to cover the franchise fee and initial investment, this doesn’t necessarily mean you’re able to afford the franchise. More often than not, the initial franchise investment is used to pay for training, equipment, and start-up costs, but doesn’t provide you with working capital or the breathing room required to handle the first few (potentially profit-less) months of business.
Have you spoken to existing franchisees?
If you’re concerned that youe only hear one side of the story when you talk to the franchisor, make sure you contact existing franchisees, too. A franchise that has nothing to hide will happily put you in touch with any of their existing franchisees. Be aware that some franchisees will try and offer you the contact details for a few franchisees they know will only say good things. To combat this, ask for a full list of all existing franchisees and their contact information.
Does your chosen franchise offer the required training and support?
If you’re to become a franchisee with any chance of success, you’re going to require the guidance, assistance, and support of the franchise. One of the key benefits of the franchise system is that you’re backed by an organisation that knows how to implement their proven business model and has a great deal of experience under their belt. This experience and expertise are next to useless if they don't have effective training and support programmes to pass the information on to new franchisees.
Are the royalty fees sustainable in the long term?
It’s not only the initial investment that you’ve got toworry about. While royalty fees are a necessary part of the franchise model, they can be the death of a business if they’re set unrealistically high. Some franchises waive the royalty fees for an initial period, but this doesn’t mean you shouldn’t factor them into your financial calculations. Remember, you need to be able to turn a profit, pay the royalty fees, and give yourself a decent wage, if the franchise is to succeed.
Have you looked for legal advice?
Though you may not think you need any legal advice to start a franchise, it’s highly recommended that you employ the services of a solicitor to at least look over the franchise agreement. This document defines the franchisor/franchisee relationship and will have an enormous impact on how your business develops. Consequently, you need to ensure that there are no discrepancies and that the arrangement doesn't favour the franchisor's interests over yours too drastically.
Have you met with franchise management staff?
In the early days of your new franchise, you'll regularly be interacting with the franchisor's management staff. To a significant degree, they'll be the ones that guide you through the setup process and offer advice and guidance. If you find that management is particularly unhelpful, uninterested, or unwilling to work closely with you, expanding the business beyond its early stages is likely to be difficult. With this in mind, you should attempt to meet the franchise management staff beforehand to get a feel for your future relationship.
Are you sure the franchisor is excited about you?
As a franchisee, you’re just as important part of the equation as the franchisor. If a franchise doesn’t choose the right franchisees, it’s either doomed to failure, or it doesn't care about the success of its franchise units and only wants to collect the fees. To ensure this isn't the case, you want to know whether the franchisor is excited about the prospect of working with you and that they're selective in who they choose as franchisees.
There’s a lot of things to think about when it comes to becoming a franchisee. Our 10 point checklist should provide you with a few questions to ask yourself and ensure that you’re ready to take on your own business. If you answered “yes” to all 10 questions, you’re well on your way to becoming a successful franchise owner.
The Editorial Team, Point Franchise ©
Are You More Suited to a Product or Service Franchise?Article published on 20/08/2018 18:00
Make a Name for Yourself with a Marketing FranchiseArticle published on 20/08/2018 08:00
Impress Prospective Franchisees with a Discovery Day to RememberArticle published on 19/08/2018 17:00
Five Ways That Franchisees Can Get Over the Fear of FailureArticle published on 19/08/2018 08:00
Discover the Recipe for Success with a Cook Stars FranchiseArticle published on 18/08/2018 17:00