Have you ever had the desire to be your own boss or to take control over your destiny? If the answer to either of these questions is yes, then owning a franchise might be for you.
Written by Damian Humphrey
Franchising is a growing industry sector in New Zealand, Australia and the UK with recent surveys showing that already there are over 100,000 employed from franchise brands in New Zealand, approximately 460,000 people employed directly in franchising in Australia and over 650,000 employed from franchise outlets operating in the UK.
What is it then that makes the franchise model so attractive to many? Here are just a few reasons.
Proven business system
You are buying into a business that has a track record of success. In most cases the franchisor will have been operating for a number of years before expanding into franchising and can demonstrate that it is a profitable model. Furthermore, a franchisor in a developed network will have honed its procedures and business methodology. It will have already made mistakes and learned from them, so you don’t have to.
Branding
You are able to trade under a banner that already has some traction in the marketplace. We live in a world where branding is key: social media enables businesses to push their corporate image out instantly, but this creates a crowded marketplace and can require a lot of investment if you are a start-up business. By operating as a franchise, you start ahead of the curve and can benefit from a collective marketing power.
Training and support
One of the cornerstones of franchising is that the franchisor will provide you with training and ongoing support. Often you do not need to be an expert or be involved in a particular sector before becoming a franchisee. A franchisor, through its initial and ongoing training programme, will be able to provide you with the relevant know-how to run your business.
All great entrepreneurs attest to the fact that the key to their success is the team that they put in place around them. For some, the prospect of operating a business on your own can be daunting. Owning a franchise for many can be a rewarding compromise, as you benefit from the support and guidance of an established head office, which can provide you with additional expertise and knowledge – as and when you need it.
Autonomy
For many franchisees owning their own business takes them away from the routine of employment and gives them the ability to directly benefit from their hard work and perseverance.
If you are considering buying into a particular network, there are some basic due diligence steps that you can take:
Social media
What are people saying about a particular business online? You will be trading under the business banner and with its reputation.
“Pilot testing”
A good franchisor will “pilot test” the franchise to ensure the business model can be replicated as a franchise.
Network members
Ask the franchisor if you can talk to other franchisees in the network to get their views on being part of the network – they will be your fellow advocates of the business.
Franchise agreement
Make sure you ask a franchise lawyer (I strongly suggest you use a solicitor affiliated with a franchise association, as they will understand your aims and issues) to:
- Review your agreement and prepare a report for you on it. The report will explain the key terms and point out any unusual provisions and suggest questions or issues you may want to raise with the franchisor.
- Ensure the trade mark that the franchisor is licensing to you has been registered – you are paying money to trade under a particular brand, therefore you want to be certain you have the right to do so.
- Confirm whether the network you are joining is reputable. The most common question that I am asked by “would-be” franchisees is “What franchise should I buy?” There are many strong networks covering a wide range of business sectors to choose from, but for me the key is to choose a sector that you have a keen interest in. Owning a franchise requires hard work and dedication. Passion for your business sector will give you the drive you need to succeed.
Meet Damian Humphrey
Damian Humphrey leads Ashtons Legal’s nationally recognised franchise team. He helps franchisors to set up and grow their networks, with a particular emphasis on assisting franchisors to expand their brands internationally. Damian regularly speaks at franchise industry events and has been awarded the Qualified Franchise Professional qualification by the British Franchise Association.