How to choose the perfect franchise in 2017
Published March 2, 2017
The average person spends 90,000 hours at work over their lifetime
. That’s over a decade of one’s life spent in the workplace.
And though spending a decade of your life at work sounds grim, it’s not. Here’s the bright side: we can all choose how we spend our working life, and there are many rewarding career paths to choose from.
Entrepreneurship is one of them. There are many benefits to becoming an entrepreneur: you can be your own boss, you can be independent, and you can enjoy the direct financial and lifestyle rewards of your own hard work.
How to be an entrepreneur without taking big risks
For some people, starting a business and developing a viable plan for success seems impossible. Financial stress, fear of the unknown and risk aversion are enough to put some people off.
This is where a franchise business
comes into its own. A franchise business is ideal for people who have an entrepreneurial spirit, but who also want to minimise risk and stress. It’s also a good option for people who want to start a business with an already established and proven business model.
As with anything, franchises are not created equal. If you’re wondering how to choose the perfect franchise, here are some things to look out for.
1. Affordable start-up costs
Reputable franchise businesses usually require an initial upfront fee upon purchase of a franchise. This can range from £500 to £300,000
, and goes towards setting up your business.
When considering a franchise, be aware of the money required to start-up and maintain the business. A good franchise business, like First Class Learning
, will be transparent about things like start-up costs. You need to consider how much you’re able to afford up front, and factor in working capital for day-to-day expenses.
Potential franchisees should also be aware of what they receive in return for the initial fee – more on this below.
2. Franchisee support
Remember: a franchise agreement is a legal contract. Expectations go both ways, and it is not just the franchisee who has obligations to fulfil.
A franchising contract should detail the support and services provided to the franchisee by the franchisor. As standard, franchisees should expect the following support from a franchisor
- Initial training – In the context of learning centre franchises, training can involve both classroom and on-the-job training. The terms, duration and requirements of this training should be in the franchise agreement. This is important as, eventually, franchisees may have to train their own staff.
- Site selection and development – Franchisors will usually give information on appropriate locations to set up your business. Once approved, franchisees must then develop the location in line with franchise standards.
- Marketing assistance – Many franchises require a minimum spend on marketing. Franchisees should expect guidance on how to market their business, particularly since most franchisees are generally not free to develop and use marketing materials without approval from the franchisor.
- Continuing support – Franchisors usually assign a representative to help business improvement and ensure franchisees are adhering to brand standards. Franchise headquarters should provide support in areas like marketing, resources, management training and product/service development.
If you’re considering a franchise business, do your due diligence and make sure you’re clear on what support you’re going to receive from your franchisor.
3. Demand in the local area
A successful franchise gives people a product or service that they want. If there is no demand within a local area for the product or service that a franchise is providing, then it’s best to avoid it.
You should carry out market research
to see if a business that you’re interested in has a future. You can find information through meeting other franchisees
, conducting surveys or reading the franchise company’s blog.
You can also look up National Statistics
on a particular industry or area, to see whether joining a franchise is viable.
4. Viable and well-constructed business model
This is the most important consideration when deciding on a franchise. The business model of a franchise should be well-established and proven, thus reducing risk.
When evaluating a potential franchise business, examine its track record to get an idea of the likelihood of your franchise succeeding. ‘Some franchise chains have failure rates as high as 80 percent to 90 percent,
while others have almost no failures’ says Sean Kelly, publisher of UnhappyFranchisee.com
‘Don’t be seduced by vague statistics or common wisdom; do careful research on the specific franchise you are considering to determine how many franchise owners are still in business through the full terms of their franchise agreements.’
5. Do something you are passionate about
It’s no secret that business can be both challenging and exciting. However, you’ll find all the motivation needed if you are passionate about the subject and believe in the product. Choose a product that matches your interests and passion. If you like baking, consider a party cake franchise. If you are passionate about working with children by improving their educational outcomes, then perhaps a franchise like FCL is for you.
Follow the franchising path to success
There are no guarantees in life or business, even as a franchisee. But, nothing worthwhile comes of passing up a chance.
Finding an affordable franchise with a well-constructed business model and a product that’s in demand (and which offers continuing support) is possible, and it’s a great way to make a change and start doing something you enjoy.
So get out there and start searching! You can even begin your search with us.