Being made redundant doesn’t have to mean financial uncertainty and months spent applying for new roles. Some of the best and most successful franchisees decided to start a franchise business when they lost their job, and we believe you could do the same.
2020 has been a year of job losses. According to the Office for National Statistics, 156,000 Brits were made redundant in the three months to July, and 314,000 suffered the same fate between then and September. With more than a million people currently unemployed in the UK, competition for job vacancies is high.
Whether you have always dreamed of running your own business, or are just looking for a way to generate a stable income, franchising offers a viable alternative to employment.
Franchises offer security during turbulent times
Being made redundant is one of the most difficult and stressful events in a person’s life; especially for those with a family to support and a mortgage to pay. However, it can also give you the motivation to try something new and channel your skills and experience towards a different career path.
Deciding to start a franchise business in a time of hardship is not a new concept. You only need to look back to the financial crash in the late 2000s to see how the business model provided a valuable opportunity for unemployed workers. At the peak of the crisis, in 2009, the UK franchise sector grew, contributing £400 million more to the economy than in the previous year. More people were making the leap from redundancy to entrepreneurship.
Even during the financial crash, many banks were still willing to lend to franchises, and 94 percent of franchisors expressed confidence about the future of their network (BFA-NatWest survey). The franchise industry has shown incredible resilience throughout difficult periods - just read these examples if you need proof.
Why you should start a franchise if you’ve been made redundant
1. As we’ve already mentioned, many people who lose their jobs turn to franchising in search of a business opportunity with good earning potential. The prospect of a steady income with an extended franchise contract and the support of an industry expert can be far more appealing than the thought of finding another job. A franchise business opportunity can provide you with long-term stability and the chance to take control of your career by becoming your own boss.
2. Many franchises offer flexibility, so you don't necessarily have to commute to an office every day or work 9-5. Many franchises only require part-time hours, while others can be run seasonally or from home. If you choose to start a franchise with remote working opportunities, all you will need is a laptop with the relevant software packages and internet access. You’ll avoid paying expensive commercial rental costs, which may help you reach your break-even point fairly quickly.
3. You can use your redundancy payout to fund your new franchise unit. If you held your job for more than a couple of years, you will probably be entitled to a substantial sum of money. Investors usually have to pay at least several thousand pounds in order to access all the benefits a franchise has to offer, but you’ll have your redundancy payment. If the sum doesn’t cover the cost of your initial investment, it will at least reduce the amount you have to borrow.
4. You’ll have experience. During the selection stage, franchisors look out for people with an excellent work ethic and good business acumen. They’ll be searching for someone who is able to step up to the mark and power on through when times get tough. As someone who not only has years of experience but has also faced redundancy and taken the initiative to pursue business ownership, you’ll be a strong candidate.
>> Read more:
- 5 Advantages of Franchising for Young People
- 9 Things to Know Before Becoming a Franchisee
- Mythbusters: Common Misconceptions About What Makes a Successful Franchisee
- 5 Great Reasons to Become a Franchisee
- Franchising 101: Are You Ready to Become a Franchisee?
- Franchising 101: 6 Things to Know Before Becoming a Franchisee
The process of becoming a franchisee
Turning a negative into a positive and deciding to become a franchisee is a nerve-wracking process. But we’ve gathered some words of wisdom for those who would like to start a franchise business after being made redundant.
- Making the final decision - Some franchisors will be looking for candidates who have specific qualifications and at least a few years of management experience. Others will open up their opportunity to anyone who is highly motivated and has a strong work ethic. If you're not sure whether you're the right fit for the franchise, you should find out whether the business runs ‘discovery days’ and book your place on one. If you’re still unsure, you could ask to volunteer at one of the franchise’s existing branches for a couple of days to get a better feel for the culture.
- The recruitment process - Many franchisors don’t ask for particular experience, but you may stand a better chance against other candidates if you have worked in a managerial position before. During the interview process, the franchisor will be keen to learn more about your work history, your reasons for applying to become a franchisee and your financial goals. The recruitment procedure may also include assessments to measure your business skills, and you may have to achieve a certain mark if you’re to progress to the next stage.
- Committing to the brand - Because many franchise contracts last more than five years, investors must be sure they’re comfortable with the business and the franchisor. In the early stages, you’ll need to invest a considerable amount of time and money into building your unit and establishing the brand in your territory. If you decide you want to renew your franchise contract, make sure you understand the formal renewals process. For example, some franchisors impose a deadline for renewals; this should be stated in the agreement.
>> Read more:
- Franchising 101: The Official Franchise Start Up Checklist (Part 1)
- Franchising 101: The Official Franchise Start Up Checklist (Part 2)
- New Year, New Career: No Better Time Than Now to Start a Franchise Today
- Franchising 101: 8 Signs You're Ready to Start a Franchise
- Starting a New Business Doesn't Always Lead to Immediate Success: Here Are 5 Ways to Change That
- It's Never Too Late to Start a New Business
Becoming a franchisee
If you’ve been made redundant and want to find out more about joining the franchise industry, why not read our articles on becoming a franchisee? They cover every aspect of the business investment journey, from finding the perfect opportunity to making sure your business survives turbulent times.
Alice Tuffery, Point Franchise ©