What are the pros and cons of being a franchisee? What is franchising and why it might or might not be for you? Would you like to know how you can make a start towards becoming a franchisee?
So you want to be a franchisee?
What is your motivation for becoming a franchisee? Perhaps you've always wanted to be your own boss and a franchise model seems to offer a low risk business proposition compared with other business models. It's important to be clear about why you want to be a franchisee before committing your time and energy to looking for one. There are a few questions that you need to ask.
What is franchising?
Pros and Cons of Being a Franchisee
Buying a franchise has many benefits: You will be buying a proven and successful business. You will not have to spend time market test your product or service because the Franchisor has already done it for you. You will not have to build your brand up from scratch because the brand has already been established for you. You will have gained valuable experience and knowledge from you franchisor because they will have come across various problems while they were developing the business and the brand. In addition, you will receive the necessary support and training from the Franchisor. So when bringing all these together, buying a franchise is generally considered to be low risk compared with other ways of starting up a business.
There are also some drawbacks to buying a franchise: You will need to have sufficient funds right at the beginning to be able to start a franchise business. To buy the right to own a franchise business, you will be required to pay a fixed franchise fee to the franchisor. In addition to this, you will need starting capital to cover costs prior to launch and beyond (See our article on financial matters to franchisee here). You will also need to sign a legally agreement (contract) with the franchisor which means you will need to adhere to the terms as set out in the contract (for what's inside a franchisee contract, see here) - so in that sense, you will not be completely free to do whatever you like with the business.
Are you suited to be a franchisee?
There are certain character traits associated with being a franchisee. Like any entrepreneur, the franchise owner must be passionate in their business. They should have business management skills and business acumens. They are fast learners and can grasp new ideas quickly. They have a long term view of the business and strive to achieve it. They also need to have good communication and negotiation skills. They have good interpersonal skills. They must consider the franchisor as part of a team. In addition to this, they need to have the discipline to act within the confines of terms as detailed in the agreement with the franchisor. They must be able to follow procedures and adhere to the standard and policy as set ot in the Franchisee Operation Manual. If you can identity yourself with these attributes then you could well be suited to be a franchise owner.
How to find the right franchise?
You can find franchise opportunities offline or online. Let's look at offline first.
Trade Shows and Exhibitions
There are many trade shows and exhibitions taking place throughout the year. They can both be educational, informative and you will get a chance to meet and talk with franchises face to face. Some of the major upcoming shows in the next few months are:
- Franchise Show
- The British & International Franchise Exhibition
- The National Franchise Exhibition
- The British Franchise Exhibition
There are many online directories that you can use to find potential franchise opportunities. You might see the same franchises found advertised in more than one directory and it's also possible that some franchises are present on some directories while not on others. A good strategy to use is to work out what industry sector you are interested in and how much you can afford before you start searching online. So you have to do some self-analysis first. Once you know what you criteria are then it would be much easier and quicker to reach a shortlist. Here are a few that you might want to try:
It's possible that some franchises do not have a presence on any of the online directories and so to find these franchises, you will have to use a search engine such as Google or Bing. If you have a specific type of business in mind, then it'd be easy to come up with the keywords that you need to use. But more often you might have to try different keywords to get the information that you need.
Do not underestimate the time it would take to find the right franchise. Once you have a shortlist, you will need to spend time on talking with every single one of them and diligently evaluate their business propositions. It's possible to find the right franchise in a few weeks or in a couple of months, but sometimes it can be longer than that. So be realistic.
How to evaluate a Franchise Business
With the franchise information that you have found, you need to be able to evaluate the franchise business so that you know if you want to take it to the next stage or discard it straight away. A 9-Point Check List maybe the tool that you need to do this.
A Success Story
The journey of a successful entrepreneur starts with knowing what you want, have a plan and implement that plan. It takes determination and passion. We have a case study showing somebody who has gone through this journey. You can download it for free here.