Considering starting your own franchise? Look no further than our definitive franchise start-up check list. Follow this to be sure you don’t miss any important stages out.
The franchising industry is booming. There are almost 50,000 franchise businesses in the UK that together contribute more than £17 billion and 710,000 jobs to our economy (both up 14 percent since 2015) (The British Franchise Association/ NatWest Franchise Survey 2018). If you too want to reap the benefits that running a successful franchise has to offer, it’s important to consider each decision in the set-up process very carefully - research should become your best friend. To make sure that you’ve got all your bases covered before jumping into your franchise adventure, we’ve created the definitive franchise start-up checklist.
Setting up a franchise can be a stressful process and one where it feels like there are a million and one things to do. Using this resource should make the process as simple and straightforward as possible. These 12 steps are based on advice from the British Franchise Association.
The official franchise start-up checklist
1. Use information provided by the British Franchise Association
The British Franchise Association (BFA) is the ‘voice of ethical franchising in the UK’. You can visit its website for lots of helpful tips about the franchising process and the latest industry news. We recommend always choosing a franchise that is a BFA member; this way you can be confident that it is sustainable, ethical and free of misleading statements.
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. You can read more about why choosing a BFA-approved franchise is a great idea here.
2. Complete the BFA’s free Prospect Franchisee Certificate
The video-based course helps provide an overview of what it takes to succeed in the franchise industry and helps prepare you for the franchise journey.The 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.
>> Read more:
3. Establish what you can afford
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 profitless) months of business.
For franchising newbies, understanding franchise investments can be confusing. If you’re in need of some clarity, we have a handy article unpicking the real cost of a franchise.
4. Self-reflect on your own skills and what you want to achieve
Ask yourself what you’re good at, what you enjoy and whether you have any personal circumstances that will prevent you from doing something. If you love interacting with the public, then a customer-facing business could be perfect. But if you are more introverted and prefer working on your own, this type of franchise might not work.
The beauty of franchising is that you can making a living from something you’re passionate about while being your own boss. And with full support and training, you can try a completely new career path.
Franchisors will often evaluate the support you will have from friends and family as part of their recruitment process, so it’s important to bear this in mind when choosing a franchise.
5. Perform thorough research into the market
It’s not uncommon for aspiring franchise owners to hit the ground running without having a full understanding of the business and the market it operates in. Speak to the different trade associations that are appropriate for the franchises you are considering. For instance, if you are considering starting a jewellery franchise, you could get in touch with the National Association of Jewellers.
6. Attend a discovery day
After you’ve chosen the franchise you want to go for, you can attend a Discovery Day. It’s a great way to find out more about the opportunity and who’s involved. Take time to prepare questions, as the more prepared you are, the more you’ll get from it – and the more you’ll stand out as a serious candidate to the franchisor.
7. Know the franchise opportunity inside out
You need to undertake due diligence on the franchise opportunity you choose. Only once you have assessed and re-assessed the opportunity can you continue the steps to making your dream a reality. Investing in a franchise is a long-term commitment that shouldn’t be taken lightly.
- Speak to franchisees. We recommend speaking to current and previous franchisees to get a real sense of what owning your own business with the brand will be like. Don’t just accept a few names that the franchisor gives you, as the franchisor might have cherrypicked the most successful.
- Meet with the franchisor or franchise management team. Be wary of anything they avoid answering or if anything seems too good to be true. 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 set-up 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.
- Understand what training and support is on offer. 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 its proven business model and has a great deal of experience under its belt. This experience and expertise is next to useless if it doesn’t have effective training and support programmes to pass the information on to new franchisees.
- Consider whether the royalty fees are sustainable in the long term. It’s not only the initial investment that you’ve got to worry 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.
Read our 50 questions to ask before you buy a franchise – these involve what you should ask yourself, the franchisor and the franchisees. You can also check out the Quality Franchise Association’s (QFA) franchise guide that will point you in the right direction.
8. Seek professional advice
It’s a good idea to use the services of BFA-accredited professional advisors who are experts in franchising. This way, you can be sure you are on the right track and won’t have any nasty surprises further down the line. This is essential when you have chosen which franchise to join and go to sign the franchise agreement.
>> Read more:
9. Get funding
If you’re eager to own your own franchise but don’t have the set-up capital, there are plenty of funding options to support you. Learn more here. This article answers the question: ‘How can you start a franchise with no money?’
10. Choose the right location
You need to find a premises that will have enough foot traffic for your business to remain profitable and has parking spaces nearby. Remember that saving money on rent by setting up outside of a city might have negative consequences when no customers want to visit. See our guide to choosing the perfect location for your franchise here.
11. Complete the franchise training
Depending on the franchisor, this might be before you sign the lease for the premises or while you’re looking for one.
12. Familiarise yourself with the franchise operations manual
Finally, there are lots of important rules and regulations in the franchise manual that you need to keep in mind. Hopefully, you should have already spent time reviewing it but, if you’ve only had a quick scan, now is the time to get up to scratch. This way, you can ensure you comply with policies when you launch.
If you use this franchise start-up check list, you should be on the right track to franchise success. Don’t forget to make the most of free resources from reputable franchising associations like the BFA and QFA. Seeking professional advice is a good idea throughout the process, but particularly when it comes to signing the franchise agreement. We have a section of our website dedicated to the steps involved in setting up a franchise with the corresponding articles. You can view it here.
Becky Martin, Point Franchise ©
0 Comments