If you’re new to franchising and unsure whether it’s the right path for you, here’s some signs that prove that you’re ready to take the next step and develop your franchise.
You have the drive to run your own business
Franchisees need to be highly motivated and willing to put in the time and effort to make a new business grow. Unlike an employee obeying orders from a boss, you’ll be the one setting the orders and navigating the business through the good and bad times.
You’re a great motivator
This leads to another important point, which is the need to keep your employees motivated. As the business owner and operator, you’ll need to use your communicative and interpersonal skills to empower your team to deliver the best possible services in the interests of the franchise model.
You’re willing and ready to take on some risk
Like all the best business opportunities, franchising does expose you to some risk, as you’ll have to allocate a significant proportion of your assets to your new franchise.
You enjoy being your own boss
As a franchisee, you’ll enjoy a great deal of responsibility. That’s because you’ll oversee all your franchise’s business operations, from marketing and recruitment to sales and IT. You’ll be running your business and franchise model with minimal intervention from the franchisor, who shouldn’t be relied upon to help with day-to-day issues.
You enjoy a flexible working environment
Many franchisees can work as few or as many hours as they like, if the business succeeds. You’ll find many franchisors offer the opportunity to work part time, from home, or on a seasonal basis, so you can continue with other commitments in your spare time.
You’re happy to follow someone else’s concept
Franchising is all about carrying forward a predetermined concept with a proven business model, so you’ll need to be comfortable conforming to someone else’s brand values and ideas. Hence, a franchise might not always suit entrepreneurs that like to think on their feet and run a business in their own fashion. However, franchising is one of the best business opportunities for people that want to run a profitable business without having to spend time and money building a brand from scratch.
You have budgeting skills
As the franchise owner, you’ll have full financial responsibility for all business operations. The first challenge is to find the capital to start your new franchise, then budget accurately during the crucial start-up phase. Don’t forget the franchisor fee, which you’ll pay in exchange for ongoing training and support (if this is included in the fee) and is often calculated as a fixed percentage of your gross revenue.
You’re comfortable borrowing (if you need to)
Many new franchisees take out loans to fund part of their franchise investment, so don’t underestimate how much money you’ll need to get your new business off the ground. Fortunately, some franchisors will have preferred lenders who can offer preferential rates for loan agreements. In any case, make sure you choose a lender with specialist experience of franchising, as your local bank branch may not be very familiar with this industry.
You have a passion for a particular business type/sector
Perhaps you’ve always had a passion for food and would like to be part of a restaurant franchise. Or maybe you’re a keen gym goer and want to run your own gym franchise. Even if you don’t have formal experience in your desired industry, this isn’t always mandatory. That’s because franchisors will normally provide extensive training and support to help you learn about the brand’s business model and how to make your new franchise a success.
You’re willing to commit for several years
Franchise contracts can often last more than five years, so make sure you don’t have any doubts before you sign the agreement. Determine whether you’re a good fit for the franchise culture and its brand values so you know you’re choosing the right franchisor for your franchise investment.
You understand your rights and obligations
As the franchisee, you’ll have an obligation to run the business until the franchise agreement ends; although the franchisor will have the right to terminate the agreement if there is a serious breach of the contract. Before you sign, read the contract thoroughly so you know what all your rights and obligations are.
Don’t forget to get specialist advice before you make any commitments
It’s important to consult a solicitor with expertise in franchise law so that you understand everything relating to the contract and franchise model. The best way to do this is to visit the British Franchise Association (bfa) website, where you’ll find a list of approved franchise solicitors that work to the highest professional standards.