Who’s choosing who? Finding the right franchise
The thought of starting a business can be a daunting prospect. And despite the franchise business model being a less risky alternative to starting an independent venture, many budding entrepreneurs are still worried that they’ll fail.
Thankfully, you’re much more likely to succeed as a franchisee. In fact, according to the British Franchise Association / NatWest 2015 Franchise Survey, less than 1% of franchised business close due to commercial failure. Furthermore, a whopping 97% reported profitability.
While the best franchises to own will vary from one person to the next, it’s crucial for all prospective franchisees to find a franchise that fits with your ambition, skills and personality.
But who’s choosing who?
Although you’d like to believe that it’s your choice which franchise you invest in the franchisor has as big a say in your decision as you do. The franchise business model is unique, and it takes a particular type of person to become a successful franchisee. Due to the experience of the franchisor, they’re very often able to tell if someone is right for their business straight away.
If you’re deemed to be the wrong fit for a potential franchise investment you may be discouraged to proceed. This is in the best interests of both you and the franchisor. It’s better to find out sooner rather than later if an opportunity isn’t the perfect fit. If a franchisor were to recruit you anyway in the hope that you’d change once onboard, it could end in your unhappiness and ultimate failure of your franchise.
This isn’t to say that you should leave the decision down to the franchisor about whether you’re right for a franchise opportunity. You should always perform thorough due diligence to become as informed as possible before you sign on the dotted line. You must always consult franchise professionals too. It's vital that you seek advice from a solicitor and account that has experience of franchising before you invest in a franchise.
What is the secret to franchisee success?
There is no secret to franchise success, but if you love what you do, it helps. When you approach every day as an exciting opportunity, and you find a franchise in which you feel like you belong, then the tough times become much easier. However, if you feel out of place and own a franchise that you have no passion for, then every day can be an unenjoyable experience, and it will be difficult to achieve your real potential.
The best franchises to own are the ones that suit your personality and behavioural traits rather than one with the biggest brand or reputation. To find the perfect franchise for you, start by performing a self-assessment. Only by understanding what your goals are, what you’re passionate about and what makes you tick can you truly appreciate what type of franchise will suit you best.
And although one of the enormous benefits of investing in a franchise business model is the training and support that’s provided, it’s probably a good move to choose an opportunity that fits with the skills that come naturally to you. Speak to your loved ones who know you best and list your skills. When you’re sure of these you’ll be able to confidently choose a franchise system where your talents will be rewarded. With over 900 franchise brands operating in the UK, you’ll be spoilt for choice so make the effort to find a franchise that’s right for you.
The decision is yours.
Of course, in an ideal world, every franchisor would make sure that prospective franchisees were the perfect fit for their franchise. Unfortunately, this isn’t always the case. Many new franchisors may not have discovered the profile of the ideal franchisee candidate for example.
Therefore, the onus is on you to recognise when a franchise opportunity is right. Here are some fundamental questions you should ask during your due diligence:
- How long has the franchisor been franchising and what previous experience do they have?
- Is this business financially sound and are there accounts available to review?
- Is the franchisor a member of the British Franchise Association? If not, why not?
- What is the franchisee failure rate?
- What does the initial training consist of?
- How much is on-going support provided?
- How much demand is there for franchise’s goods or services?
- What is the total franchise cost including ongoing fees?
- Who are the franchise’s main competitors?
- Are any changes planned for the franchise which may affect the investment?
- Will a territory be granted? If so, will it be exclusive?
- What is the length of the franchise term and can it be renewed?
- Are there any performance targets in place and what are the consequences of not achieving these?
- Are there any restrictions on selling the franchise?
You should always ask the franchisor if you can get in contact with existing franchisees too. Good franchisors will encourage you to meet with other franchisees from within their network so that you get a good understanding of the franchise and what will be expected of you. If a franchisor isn’t willing to give you franchisee details or attempts to select who you speak to, this should be viewed as a red flag, and you should proceed with caution.
Finally, remember to trust your gut. When you meet with the franchisor and their senior team, you'll get a feel for the franchise culture, and you'll instinctively know whether it's a good fit with your vision and values. Although you shouldn't choose a franchise based on gut instinct alone, sometimes the best franchises to own are identified by our hearts rather than our heads.
The Editorial Team, Point Franchise ©
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