Take a Smart, Calculated Risk: Become a Franchisee

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Starting any kind of business involves an element of risk - the trick is to minimise the likelihood of failure as much as possible. The franchise model can help you, as long as you pick a reputable company. Keep reading to find out how to take a calculated risk when becoming a franchisee.


Just 10 percent of people consider themselves to be risk-takers (Shepherds Friendly). Although throwing the dice can seem scary, there are ways to mitigate failure and achieve those enviable rewards. To maximise the chances of your gamble paying off, you’ll need to evaluate the potential outcomes and make sure the benefits are worth the possible pitfalls. 

Judging the extent to which you’re willing to leave your comfort zone and the amount of vulnerability you’re comfortable to take on is all part of running a successful business. Aim to avoid putting everything you have on the line; instead, carefully consider the pros and cons of a decision before making it, and then learn from its outcome. 

Why franchising offers a low-risk entry to business ownership

Here at Point Franchise, we support budding entrepreneurs to set up lucrative and productive businesses by investing in a franchise. We’ve seen how the expertise and support of an established franchisor can help would-be business owners reach their goals. 

Before we look at how to take a calculated risk when becoming a franchisee, let’s explore why franchising is a good idea for those who want to limit their chances of failure. 

  • You can use the franchisor’s tried and tested model - The franchise’s founder will have already ironed out any kinks in the business model and made mistakes for you

  • You’ll have an established customer base - If the franchisor has already established branches across the UK, consumers are likely to be aware of the brand and all the more likely to trust and use your business

  • You can access business support - The franchisor will always be there to answer any questions you have and help you launch and develop your business

How to succeed as a franchisee and limit risk even further

Becoming a franchisee is one way to take a calculated risk when starting a business. Here are eight steps you can take to reduce your chances of failure even further when you invest in an established company: 

1. Educate yourself

You’ll only be able to discern a great franchise opportunity if you know what to look for. Aim to familiarise yourself with all aspects of the franchise model and the elements separating the wheat from the chaff. Reading testimonials from existing franchisees is just one way to find out what makes or breaks a franchise business, and which opportunities you should be prioritising. 

Engulf yourself in the industry… Learn everything there is to know, engage with the experts and do whatever it takes to further your understanding of the craft.
— Zach Hirsch, sports gambler

2. Investigate the franchise’s history

When you’re browsing franchise investment opportunities, you should take the time to look into the history of your favoured businesses, as well as their current performance levels. 

Franchisees within a business share the same reputation - and this can be a blessing and a curse. If you join a franchise with international brand awareness and a huge following of loyal customers, you’ll benefit from its popularity. But if another franchisee, miles away from your unit, exercises substandard service or treats employees poorly, for example, your business could be tarred with the same brush. 

The best way to avoid the chances of developing a negative reputation is to research the history of your chosen franchise. Investigate any previous scandals or customer issues, and make sure you’re comfortable to proceed.



3. Research the franchise’s support package

When you become a franchisee, you still need to know and abide by all the rules set out by the government. Depending on the business you run, you may need to take out certain permits or insurance policies, and adhere to regulations surrounding tax and accounting. 

Thanks to the franchise model’s ability to turn a business newbie into a seasoned employer, many new franchisees can come into the industry with little business knowledge. So, it’s vital franchisors provide high-quality training schemes and support packages to make sure their investors can operate legally and ethically. 

4. Complete market research

Market research is a key step in the journey of any prospective business owner. Your chosen franchise might be thriving in multiple regions across the UK, or even the world, but you can never be sure it’ll succeed in your local area. Put yourself in the best possible position by embarking on a comprehensive market research journey. 

You may also want to avoid franchises catering to fads and trends, and consider how well your shortlisted businesses would fare during economic crises. By gaining a thorough understanding of the franchise and how it might perform in your territory, you can highlight red flags ahead of time. 

Some businesses will actually thrive during tough times. A consumer may be more likely to repair his car during a recession, whereas in a good economy he might simply buy a new one. Be sure to ask any franchisors you are considering how the business fares under different economic conditions.
Mark Siebert, Franchise Consultant for Start-Up and Established Franchisors

5. Be prepared for setbacks

No business is able to avoid every stumbling block - even franchise units can experience misfortune and mishap from time to time. The best thing you can do is anticipate mistakes and their consequences. You might like to draft a form of risk assessment to evaluate the pitfalls you might be faced with and plan your response. 

In other words, always have a plan B. Things go wrong, but it’s important not to panic. Instead, think logically and coherently, and be ready to adapt if necessary. 

6. Perform regular reviews 

Once you’ve become a franchisee and are well on your way to running a successful business, it’s worth scheduling time to evaluate your performance every once in a while. Just like people, businesses benefit from frequent health check-ups, so regularly set aside a few hours to review your progress and look ahead to the future. 

Set short-term goals and implement measures to calculate your success numerically. If you know exactly how your business is performing, you’ll be able to take action ahead of time when you feel you’re falling behind. 



7. Consider ways to boost your success

Minimising risk isn’t just about staving off misfortune; it also involves thinking about the steps you can take to increase customer awareness surrounding your business. Allocate time to consider the markets you’d like to target and how you can maximise the appeal of your unit. 

There are many ways to enter a market, so it’s worth evaluating the weapons in your arsenal when it comes to promotional campaigns. 

Demand can come from the product’s value — such as its ability to solve a problem — or even from the person who’s selling the product... This is one of the reasons why big influencers and celebrities can land lucrative book deals. Publishers know that whatever they release will fly off the shelves.
— Aimee Tariq, A Life With Health founder and CEO 

8. Know when to take the plunge

Becoming a franchisee is a huge step, and carrying out a large amount of research can make you feel as though you’ll never be ready to give the go-ahead. But there comes a point when you have enough knowledge to make an informed decision and go into a franchise opportunity with a clear picture of your journey ahead. 

The key here is to accept you may never feel fully prepared, and to avoid everlasting indecision by jumping into a franchise investment with confidence and composure. 

Become a franchisee with one of our fantastic investment opportunities

You can view our full range of business opportunities in our franchise directory, or filter the selection by sector on our drop-down menu. 

For more information about becoming a franchisee, browse our recent business guides or use the search box for articles on a specific topic.

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