Nigel Toplis, Managing Director leading UK franchise businesses Recognition Express, ComputerXplorers and Kall Kwik and past chair of the British Franchise Association (bfa) advises how to assess the myriad franchise opportunities available in the UK.
What is Franchising?
Franchising is a crazy mixture of conformity and individuality that combines the best elements of big business and small operations.
To be successful, a franchisee must comply with the franchise system and yet such compliance will enable the franchisee to achieve a greater level of fulfilment.
There is no template for being a successful franchisee – except perhaps the following
- Willingness and propensity to work hard
- Acknowledgement to follow and adopt the franchisor’s system
- A desire to succeed
A franchisor will always be on hand to provide knowledge and expertise on all the key areas of business which franchisees can take as much or as little advantage of this as they require. Some have referred to the relationship of franchisor and franchisee as a ‘marriage’. It is the ideal option for both entrepreneurs and those less keen to take a big leap into the unknown.
When selecting a business franchise opportunity there are some questions you need to ask
- Why do I want to run a business?
Personal ambition, getting just reward for effort, attaining greater job security, to learn new skills, building a capital asset and to work with the family are all well documented reasons.
- What am I good at?
Sit down and evaluate your strengths and weaknesses, your likes and dislikes. You should look upon a franchise as a long term tenure, more a vocation than a job.
- What sort of person am I?
It will help if you are positive, outgoing and energetic, if you like solving problems and see yourself both as a self-starter and a team player.
- What can I afford?
Be sure you can afford both the initial fee and time spending training and thus not working as well as any shortfalls over the first months or trading. If you think the venture is going to cost you £100,000 and you only raise £80,000 be very, very sure before you beg and borrow (usually from family) to go ahead.
Once you’ve identified a business that:
- interests you
- uses your skills/experience
- you can afford
- matches your aspirations
The next step is to find the right franchisor and to help here are:
10 questions to ask a franchisor
- Do they have a solid trading history?
- Are they financially sound?
- Do they have a history of success?
- Is there a genuine Head Office support structure?
- What do they actually provide by way of support?
- If the franchisor supplies product, what are the Ts and Cs?
- What is their position in the market?
- Are projected cash flows realistic? Can they prove so?
- Does the company have a finance facility with the banks?
- How tough is their interview process?
Assessing the franchise business opportunities
You should now be in a position where you have decided to become a business owner, you know the type of business and industry you want to be in and you’ve chosen the franchisor to get into bed with.
Next do a business plan (possibly with the help of a good accountant) which explains what you hope to do, how much money you need to do it and how you propose to pay the money back. Finally approach the bank!
The magic of franchising is that it combines an individual skill set, ambition, drive and energy with the tools, training, branding, support and proven business system of the Franchise.
Remember, you’re in franchising for yourself but never by yourself.