According to Franchise Direct, there are approximately 1,000 franchise systems employing over 621,000 people and contributing £15.1 billion to the economy. Franchising appears to be more resilient than independent start-ups as they have the benefit of the support system from the brand. Franchising is not a get rich quick scheme, it will involve hard work - maybe even blood, sweat and tears. So how do you know if franchising is right for you? Here are our top tips when thinking about franchising or becoming a franchisee
1. Is it working?
Before you consider franchising your business or buying a franchise, do your due diligence and check that the, ‘business is working?’. Look at the figures, is there growth, is it sustainable? Do you as a franchiser have a sound business plan for expansion? What are your growth strategies?
2. Can you sell it?
As a franchiser, ask yourself whether someone would want to have your business in another location? Are you credible? Do you have a good and consistent brand?
As a franchisee, have you done your research? Have you looked under the hood? Make sure you talk to other franchisees of that business, as them about their experience, what challenges they have faced. If they could start over again what would they do differently. Make sure you visit as many as you can to get a good sense of being a franchisee.
3. Can it be replicated?
Not all businesses are right for franchising. Ensure the one you’re thinking about is. Can the business be replicated easily? Will it work in a different location and with a different team? What will this mean for you as the franchiser? What impact will managing this have on your workload? You don’t want to set up a franchise and suddenly realise that it only worked because of where it was situated or due to a particular individual.
4. Check and double-check who you are partnering with.
Check potential franchisees before you commit to giving them a part of your business. Are they the right fit? Do they have the same beliefs and passion for your sector as you do? Are they business minded? Do you get on well with each other? This a relationship at the end of the day, which you will want to stand the test of time, ideally. Also remember that your brand’s reputation is on the line here.
5. Do you have the capital?
Some believe that franchising is a low-risk and low-cost way of being in business, but this is not true. Investing in a well-known brand can require significant up-front money. The risks of failure are there, as with any other business…the stars need to align correctly for it to work. Make sure you have enough capital for the investment and invest ahead of making the deal in expert advice, such as an independent business advisor.
If you have an idea to franchise your business and want independent advice, call our Romford-based team at RBSS Consulting on 0333 355 1696. If you are thinking of investing in a franchise and want us to evaluate if we think it will work for you, get in touch today. You can also email us at firstname.lastname@example.org
Business Advisors Romford | Business Advisors Hornchurch | Business Advisors Upminster | Business Advisors Brentwood | Business Advisors Barking | Business Advisors Dagenham | Business Advisors Ilford | Business Advisors Stratford | Business Advisors London