Franchise for sale
Franchises are big business in the UK. They’re a great way for entrepreneurs to make a move into the business world, but with the additional benefits of a little help from an established brand and an excellent support service. It’s business with a boost, and it’s a model that’s already made thousands of UK tycoons wealthy.
How to find the right franchise for sale in the UK
Don’t think for a moment that buying a franchise is an easy ride. It takes hard work, commitment, and a substantial amount of start-up capital to get going. The hours are long, but the rewards, if you make a success of your franchise, are well worth the effort. If you’re looking for a franchise for sale in the UK, what should you bear in mind, and how easy is it to get your foot on the first rung of the franchise ladder?
Where do you go to find a franchise for sale in the UK?
Your first stop should be the internet. You’ll find a wealth of information on franchises for sale across the UK, whether you’re looking for a high-street food outlet with the punch of a big name behind it, a courier franchise that’ll get you into one of the most rapidly expanding markets in the industry, or a gym franchise where you can turn your passion for fitness into a profitable business.
There are literally hundreds if not thousands of franchise opportunities in the UK. Find one that interests you, and then research it thoroughly. Every franchise is different (even within the same organisation), so you’ll need to ensure it suits you as much as you suit the franchise. Remember that when you sign the contract you’ll be committing to a long-term relationship with the parent organisation, so it’s essential you get it right from the outset.
The best place to start is the British Franchise Association. This not-for-profit organisation acts as an accreditation benchmark for franchisors, using a strict set of criteria. They operate using the European Code of Ethics for Franchising, and provide impartial advice to anyone looking for a franchise for sale.
How much will it cost?
Your initial investment will depend entirely on the franchise being offered. The more attractive the franchise, the higher the initial investment. You’ll also need to allocate funds for fees, as well as working capital to get the franchise running. In fact, the list of expenses can quickly grow when you buy a franchise. You’ll need to include:
- The initial franchise fees
- Running costs
- Licencing fees
- Premises costs - including rent, business rates and running overheads
- Communications - including phone systems, email addresses, hardware such as phones, broadband, landlines, etc
- Vehicle costs – including lease or rental costs, fuel, maintenance and signwriting
- Marketing – absolutely vital if you are going to make your franchise a success. Without a strong marketing campaign, you will fail, so be prepared to spend more than you first anticipate on advertising, website development and the business launch
- Professional fees – including solicitors, accountants, estate agents, architects and surveyors
- Membership fees to trade organisations
- Insurance – including public liability, employer’s liability, stock and premises cover, vehicle insurance
- Staff – including wages, PAYE and National Insurance contributions, compulsory pension payments
- And don’t forget - a wage for yourself.
When you start to consider everything you need to pay out to buy a franchise business, it’s clear that you will need a reasonable amount of start-up capital. But where do you get that money from?
I’ve seen a franchise business for sale I like. Can I borrow money to buy it?
Don’t, whatever you do, max out your credit cards if you see a business franchise you like. Remember that you’ll be under contract, so you’ll need to have a stable financial foothold before you take on a franchise. If you can raise some of the initial funds, then banks specialising in franchise purchases can be willing to lend up to 70% of the costs, including working capital. That, though, is for well-established franchise brands that have plenty of clout.
Smaller, less well-known brands may be less attractive to financial lenders, but by the same token the start-up costs may be much lower. If you do get a loan from the bank then it will probably only be for the duration of the licence (usually around 5 years), after which you will have to have paid back the loan in full.
The more capital you can raise yourself before you go to a lender, the better.
Learn how to be a franchisee
Before you swoop in on a tempting franchise business for sale, you can learn how to be a franchisee first. Not only will this give you a grounding in how to run a franchise, but it will make you a more attractive proposition to the franchise parent company.
The Prospect Franchisee Certificate (PFC) is a modular course that takes you through each stage of the franchise business. It provides information on every aspect of buying a franchise, from evaluating the potential of a franchise to business management, financial and legal aspects, and how to grow your franchise. The best bit? It’s free and you can do it online. Check out www.thebfa.org/PFC for more information.
Getting through the selection process – the tougher it is to buy your franchise, the better
Franchises are incredibly popular, but in some instances, they’re simply a way for a parent company to pass on the costs of running an outlet to a third party. The more stringent and demanding the selection process, the better the franchise, as the supplier obviously values not only their business and their reputation, but wants the best representatives as franchisees, too.
The right kind of franchise for you
Buying a franchise is attractive for several reasons. You’re effectively your own boss, it’s up to you how successful the business is, but you still have the reassurance and support of the parent company to give you a little morale boost when you need it. Once you’ve made up your mind that becoming a franchisee is the right career path for you, the next thing to do is to pick your franchise. The two most popular franchise opportunities on offer are courier business and food outlets.
Courier franchises for sale – getting your business on the road
The massive increase in online shopping means that there are hundreds of thousands more parcels being delivered across the UK every year. If you look for a courier franchise then be aware that the market already has some very big players, and competing with them can be difficult.
Instead of looking for general courier franchises for sale in the UK, why not go for something a little more specialised, such as a courier service that only delivers liquids or specialist products, or sensitive documents? With a much smaller field and fewer competitors, you have the chance to establish a solid business that makes money very quickly. Before you do, though, research your market and make sure there’s a growing demand for your specialist courier service.
Food franchises for sale – turning a tasty profit
Food franchises are the single most popular franchise – and they’re also the toughest to get right. The food market is huge, but with so many competitors all vying for a limited customer base, your franchise really must deliver something very special indeed to rise above the general high-street melee.
Resale franchise opportunities are most prolific in the food industry, and can offer cash-strapped entrepreneurs a cheaper route into the franchise market.
However, do your homework first before you choose a food franchise, especially if it’s a resale. Look at the local market and be honest with yourself – if your high street is already jammed with food outlets, is there room for another? If your franchise is a resale then find out why it failed the first time around – perhaps there was simply not enough demand to make the franchise profitable.
There are thousands of franchises for sale in the UK. With so many to choose from, it’s vital that you do your homework first before you start to look for your perfect business opportunity. Understand what it takes to become a franchisee, and if possible, make yourself even more attractive to the parent company by taking a course in franchise operation first.
Demonstrate an acute business sense, the ambition to succeed, and a good understanding of the franchise you want to operate and you’ll be a welcome addition to any high-profile franchise chain.
Make sure you have a solid grip on the finances, too. From the initial outlay to ongoing running cost, operating a franchise is expensive. Talk to banks that specialise in lending to franchise operators, and remember never to max out your credit card to try and make your dreams come true.
Pick the right franchise, whether that’s a courier operation or a food outlet. Use online searches to find the best franchises for sale, and never be afraid to ask plenty of questions before you sign the contract.