Running your own business as part of a franchise can bring incredible rewards, from high levels of income to flexibility. But what makes a good franchise and how can you make sure you choose the right one for you? Here’s our guide on how to find the perfect franchise.
Although choosing to start a franchise business could be the best decision you ever make, you shouldn’t enter into a contract lightly. You’ll have to make a significant financial investment from the outset, so it’s vital the brand you select has the recipe for success.
The best way to find the right franchise for you is to do plenty of research. Until you’ve finished your due diligence, you won’t be able to tell whether a franchise represents a worthwhile investment.
What are the qualities of a good franchise?
If you were eating at a restaurant, you’d want to make sure the menu satisfied both your requirements and personal tastes - a franchise is no different. Here’s what makes a good franchise:
A budget-friendly offering
You wouldn’t eat at a restaurant with wildly overpriced food - and if you did, you probably wouldn’t go back - so check your chosen franchise opportunity has a fair investment cost. Big-name brands can command higher sums, but large franchise fees can also indicate high-quality training and support schemes.
Only you can say how much you’re willing to spend, but if you’re looking to run your franchise unit as a part-time venture, you’ll probably want to keep your initial investment fairly small. If, on the other hand, you’re ready for a complete career change, you could invest considerably more.
Just remember: if you need to take out a loan to fund your venture, make sure you’ll be able to afford the repayment fees. And never spend more than you’re comfortable with to become a franchisee.
Suitable for your tastes
A restaurant could offer Michelin-star, fine-dining meals of the highest quality - but if they’re not to your tastes, you won’t enjoy them much. The same goes for franchise opportunities. Make sure your investment will give you the chance to exercise your passion and have fun, as well as access a winning business model and expert support.
Before you start your research journey, ask yourself what you want to get from your investment. Consider your own strengths, weaknesses and interests. Think about the type of business you dream of running, and whether you have the skills and commitment it would need. The perfect franchise opportunity will require more than a pinch of determination and a dash of hard work to succeed.
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No misleading small print
Reading the small print may not be the most exciting part of buying into a franchise, but it’s vital if you’re to dodge potential problems. Review the franchise disclosure document and agreement from front to back with the help of a solicitor to check there are no questionable ‘ingredients’ or unethical working practices.
One of the most common hiccups involves clauses instructing franchisees to buy stock from specific suppliers or business partners. In some cases, franchisors have been known to inflate product costs, leading franchisees to struggle before they’ve even got their feet under the table.
Ideally, you should aim to partner with a franchisor who champions transparency. For your franchisor-franchisee relationship to work well, you must be able to trust them.
When buying into a franchise, it makes sense to want to be part of a brand with a winning reputation and loyal customer base. But while big-name businesses should help you generate an impressive return on investment, they also come with a significant initial price tag.
Rather than trying to get the most from your money, establish your budget and then choose the franchise with the best reputation within your set price bracket. Look online, attend industry events and get in touch with existing franchisees to get an accurate picture of the franchise.
No matter how much you spend, you don’t want to put your hard-earned cash towards a low-quality investment model and be left with a bad taste in your mouth.
>> Read more:
- 5 Qualities of a Successful Franchisor
- 4 Things Franchisees Never Have Time for But Are Essential for Running a Successful Business
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- 4 Elements of a Successful Franchise
- How to Start a New Business on a Shoe-String Budget
- The Ultimate Guide to Franchising Success
Industry-approved working practices
If you’re new to the franchise world, referring to long-standing regulatory bodies is a particularly useful way to sort the wheat from the chaff when it comes to franchise opportunities. If a business has been celebrated by trusted industry experts, you know it’s probably a decent organisation.
In the franchising world, investors turn to the British Franchise Association (BFA) to check employers’ credentials. If a company cannot meet the BFA’s strict approval criteria regarding ethical practices, they won’t be able to become members.
You could also look at the franchise industry’s main prize ceremonies to find credible franchisors. Events like the BFA-HSBC British Franchise Awards celebrate high-quality investment opportunities by distributing prestigious and much-coveted seals of approval.
How to find the perfect franchise
Starting a franchise business is an exciting process and many budding investors want to get going as soon as they’ve made the decision to become a franchisee. But it’s important to do thorough research if you’re going to find the perfect franchise for you.
Once you sign a franchise agreement, you’ll probably be part of the business for five years or more, so it’s vital you make the right decision. Don’t rush the process; take your time and explore every research avenue before committing to a long-term franchise agreement.
Our franchise directory is a great place to start your search for investment openings. Use the main menu to browse current opportunities by location, price or sector.
You can also find useful guidance on becoming a franchisee and running a franchise business right here at Point Franchise. We publish data-driven articles every day to help investors succeed, no matter the economic climate. Take a look at our article catalogue or read up on the latest news across the franchise industry to stay up to date.
Alice Tuffery, Point Franchise ©