Franchising is a great way to get into business ownership. Not only does it have a higher success rate (92%) compared to starting a business alone (79%), the business is yours – you’re just using the franchisor’s brand under license. These success figures are fairly conclusive too, with many surveys typically reporting a 92-93% success rate figure. Having access to an already established, built up brand and business model has its advantages, despite the brand itself not being yours. Having that immediate brand recognition gives you a head start compared to if you were to have started up alone. Getting the training and support in the operations side of the business gives reassurance that many people needed, people who’s scales just needed that little extra weight to fully balance to one side – becoming a business owner and regaining control.
This article covers 10 resources to help you when buying a franchise. It will be broken up in to two parts. 5 sections with helpful resources when exploring and looking into franchising opportunities. And 5 sectional resources when you’re ready to invest and become a franchisee. If you’re new to franchising, you can go over the basics of franchising here.
So let’s start with the first section of resources…
Table of Contents
Resources to Help You Choose The Right Franchise
You’ve probably already got an idea of what you would like to do. You’ve probably already thought about it since you’ve came across franchising. Were you exploring options beside starting up that business yourself? Regardless of whether or not you’ve already explored various options, it is a good idea to go through these resources. Not all franchises trading are “perfect businesses”, there are some red flags to watch out for. But utilising these helpful points below will help stop you veering off course. Let’s start.
1. The British Franchise Association
Franchising isn’t government regulated in the UK. This means business owners have full control over the direction their business takes with regards to franchising. Who joins their brand, who runs their business in their area – it’s all up to the franchisor. The franchisee makes the decision to invest at their own risk.
Established in 1977, the British Franchise Association was founded to provide support and guidance, an authoritive membership body to the UK franchising sector. Almost every country has some form of franchise association to support both investors/entrepreneurs and franchisors/businesses looking to franchise their business.
As well as having many helpful members, resources, magazines, training courses and a helpful board of advisors, the franchise businesses on their directory have passed rigorous checks. Checks to make sure that the franchise agreement, operations manual and procedural setup is as water tight as possible so that the risk of joining that franchise is minimal.
Not all franchises are members of the bfa and many fantastic franchise opportunities are not part of any membership body. So therefore its still worthwhile to consider exploring further than just the British Franchise Association.
2. Franchise Directory Website
It’s a good idea to compile a list of franchises that interest you, and then explore each one in great detail. Make a list of brands and then compare them. The best way to make a list and explore each one is by using a comprehensive franchise directory. When exploring franchises, you’ll want to request a franchise prospectus, this usually has a lot more detail than what can be found on their website or advert. Using a franchise directory like this one (Franchise Planet) enables you to quickly browse franchise opportunities with ease, add them to your cart and bulk request brochures by email.
In the prospectus you will typically find earning potential figures, details on what’s included for the investment, and background story of the business.
Franchise directories usually have a wealth of resources and information about franchising. This is in addition to a compilation of the many opportunities within the franchising sector. Conveniently you can filter by budget, franchise type and location, helping make your search easier.
3. Franchise Exhibitions
There are usually multiple franchise exhibitions every year. Well placed throughout the country, franchise exhibitions usually attract tens sometimes hundreds of franchise brands. Complementing these franchises are franchise consultants and partners and supplies within the franchise and sector who are able to lend advice and guidance about franchising.
The two main franchise exhibitions which take place in the UK typically take place in Birmingham and London. These two locations are prominent and accessible to attract the widest footfall of prospects and businesses alike. Stands at these shows are not cheap and exhibitors pay a lot of money therefore are eager to meet you and in turn parting with the large figure required to exhibit at the shows shows determination by these brands to recruit quality franchisees and grow their brand.
The two main shows are the British franchise exhibition and the franchise show. Other business networking events take place throughout the year and another prime example of a quality show that is good to attend should you wish to learn more about business opportunities in franchising is The Business Show.
Just like franchise Discovery days, exhibitions are a great resource to both find out and learn more about franchising and speak with franchisors. Stands may have in attendance existing franchisees so you can speak to them about there experience and ask questions too. It’s a good idea to compile a list of franchise brands you’re interested in meeting before attending, as well as a list of questions you like to ask.
Franchise exhibitions are free to attend and are a useful opportunity that shouldn’t be missed.
4. Research Websites Such As Companies House
Part of your due diligence should involve background checks of the franchise network including its franchisees both past and present. Research as many franchises as you can find and check out there financial history to learn more about their profits. You can use Companies House to find out about closed companies that have ceased trading. As a government website, companies house has lots of information about the companies and businesses formed within a franchise network. Most franchisees will set up as a limited company and will therefore be listed with details about their turnover and liabilities. Use websites like trustpilot to read reviews about existing franchisees and get an understanding of the reputation the franchise network has. Brand reputation forms important part within franchising and negative credibility can damage your perspective pipeline of customers in the future. Take this into account and make a list of franchisees which appear to have failed. Challenge the franchisor about these franchisees to learn why they have failed. There might be a genuine reason for their failure but it should not go unnoticed. Lack of support and operational inconsistencies are all course for concern and there are a number of red flags that you should look out for when investing in a franchise.
When exploring franchise opportunities, make a list of plans that interest you. Spend time looking across the web and researching these franchise brands. This can help you effectively choose which franchise is right for you.
5. Facebook and Google Search Franchise My Business
Before going any further, join some local gossip groups on Facebook, community groups and the like. And then search within those groups the service you plan to offer. For example oven cleaning, window cleaning, dog walking, the like. Another thing to do is search on Google – why? You need to find out if the market already has been served. Ie, is the service you’re offering saturated – fully in supply to meet the demand? There’s nothing wrong with investing in a franchise in a competitive field, but you should be aware of the potential shortcomings. Those are, the fact that individual businesses won’t have royalty / monthly fees to pay a franchisor – therefore they may have better flexibility within their pricing structure. What are their prices, do some competitor analysis as part of your due diligence exploring franchises. If customers can go somewhere cheaper, why wouldn’t they? But having said that, the franchisor won’t set your prices. You have control over that.
Resources to Help You When Investing in a Franchise
So you’ve found a franchise, or franchises, that you’re interested in. Great! There are many resources that can help you on your franchising journey. One of the biggest benefits of becoming a franchise owner is that you have support behind you should you need it while still being a business owner and being in a generous amount of control that your career takes. Franchising lets you be in business for yourself but not by yourself and there are many resources out there to help you along the way. Let’s take a look at some of these.
6. The Franchisor
The franchisor will be with you all of the way during your franchising journey and will be your main point of contact for any queries or support you require both before and after investing in the franchise. They are an essential resource. The franchisor will be eager to answer any questions you might have before you meet them and they will be eager to meet you face to face to explain more about the business model and the franchise opportunity. The franchisor Will want to make sure that you are the right fit for the franchise network and in the same manner. You’ll want to make sure that the franchise is right for you. By meeting the franchisor face to face before investing you will have the opportunity to ask any questions you might have.
After investing the franchisor will provide you with the training and support you need to run the business effectively. In most cases, they will be your main point of contact for any ongoing queries, operational support or concerns that you might have. An important resource, the franchise or will be your contact throughout the entirety of the franchise agreement, right up until you decide to sell the territory and pursue alternative careers.
To speak with the franchiser about their franchise opportunity, simply request a perspectus through their profile page on Franchise Planet. They will usually send you a PDF franchise prospectus with basic information about the business opportunity before sending you an email with an opportunity to book a call or book a discovery day to learn more. They will not try to sell you a franchise but will be eager to learn more about your ambitions and the sort of career path you wish to take within franchising. It is not unusual for your first communication with a franchise brand to be with a franchise consultancy firm. Many franchisors work with consultancy firms who take the time to comprehensively understand the franchise brand. Franchise consultants have strong experience with franchising and it is usually better to work with a franchise consultant rather than for them to employ someone to handle franchise enquiries with little to no experience with either the brand, nor franchising. Therefore, in most cases when you contact a franchise, the franchise consultant may have just as much knowledge about the brand and it’s ambitions as the franchisor.
7. Franchise Consultants and Legal Advisors
A franchise consultant works with franchise brands to help them grow and help them choose the best way forward when franchising their business. Business owners aren’t expected to know everything about franchising their business, which is why they use the help of a franchise consultant. The Franchise Consultant will help business owners prepare the necessary documentation and format the business in a way that is scalable and franchisable.
It is a good idea to work with a franchise consultant when choosing franchise. You should also consider working with a legal advisor when reviewing any documents such as the franchise agreement or the franchise operations manual. Both of these documents are essential for the effective running of the franchise business. The franchise agreement defines your rights and responsibilities and explains how you legally tie in to the contract of the franchise agreement. Making sure you fully understand franchise agreement is essential because you are required to abide by it for the duration of the agreement. The Franchise agreement usually last 5 years but it can last longer. Another document you should get checked out by either a consultant or legal advisor is the deposit agreement. While the deposit agreement will be fairly straightforward it will explain the requirements of you in the setup of the business. This might include the time to go live and information about your deposit and when the full investment amount should be paid by.
Franchise consultants have strong experience working in the franchise sector and are able to identify anomalies within franchising documentation or the business model. They’ll be able to advise you on any questions that you might have prior to signing any sort of agreement. Franchise consultants work with many different franchise brands and usually take the time to work with the franchisor, taking time to fully understand their brand. While that franchise consultants generally work with a number of brands, they will likely be a good to help you even if they’re not working with a brand you’re interested in. A franchise consultant can help you when making the right decision. Similarly to the British franchise association, franchise consultants exist to help and support the sector. Therefore, working with a franchise consultant is a good idea because they will have strong experience of and knowledge of franchising that will help you determine the best way forward.
Even if you don’t need a legal advisor immediately, it’s good to have access to a good legal council should problems arise during the running of the franchise. Legal issues can arise for a number of reasons and there may be times where issues arise and there aren’t effective handling procedures within the franchise agreement.
8. Existing Franchisees
A good franchise opportunity will be transparent and there will be opportunities to speak with existing franchisees. Existing franchisees are useful resource both before and after investing in a franchise. Many franchises have networks where you can speak to other franchisees share. Best practise and tips about the trade. When you become a franchisee depending on the business model, your training may involve on the job training with a neighbouring franchisee. Franchisees are no stranger and you should be utilising their support and advice just like you would with the franchisor. A good solid network of franchisees is what makes a franchise model successful.
There are many questions that you can ask. Many franchisees are eager talk openly about their experiences with the franchise. There are a lot of questions that you can ask a franchisee, to get there advice about the franchise both before and after investing. You could ask them about their experience, whether they are happy with their business and whether the business met or exceeded expectations in terms of profitability, training and support.
Existing franchisees are a useful resource when it comes to thinking about investing in a franchise. Don’t miss out on the opportunity to speak to existing franchisees as part of your due diligence when reviewing opportunities for entrepreneurship. We list some case studies and success stories on Franchise Planet for a number of franchise brands which you can read about to learn more about the experiences of franchisees.
9. Business Association Membership
Franchisees can usually become members of the British franchise association, but there are many organisations out there that help new business owners. For example, the federation of small businesses.
The British Franchise Association
The bfa often run events to help both franchisors and franchisees, such as their “franchisor power hour”. From our experience at Franchise Planet, there are often between 30 and 50 franchising experts in attendance. This includes franchisors, bfa members and partners within franchising. As a franchisee or prospective franchisee, you’re welcome to join this event which usually happens on the first week of each month. Whether you’re eager to ask questions or stand by in the background taking everything in, the power hour is very useful.
The bfa also have training courses, a series of magazines and accreditations that you can achieve to help grow your understanding of franchising. Take a moment to explore the BFA partner directory for more businesses eager to help franchises.
Federation of Small Businesses
When researching franchise opportunities in the UK, you might find that some franchises will include FSB membership within the investment. But even if it doesn’t, the benefits are vast and the costs are surprisingly affordable. “Surprisingly” because the amount of resources, advice and guidance you get for the membership fee is invaluable. The 24/7 legal and tax advice helpline will come in very useful for those that are new to business and haven’t got a clue how to manage their taxes. With over 1,400 legal documents and templates, over 1,000 training courses, funding applications, business banking, pensions and so much more, the membership cost really is a no brainer – self employed franchisees are looking at less than £200 for the year.
Learn more about FSB membership and how it can help your franchise.
10. You!
One of the biggest resources when it comes to investing in a franchise is you. Take time to understand and review your own suitability for becoming a franchisee. Financially can you afford to become a business owner? Whilst franchising generally has a high success rate compared to starting up a business alone, a small percentage do fail and you need to be aware that similarly to business ownership, if you were to start it up alone, the success of a franchise very much depends on your own input and the efforts you put in.
You need to ask yourself some questions. Firstly, can you afford the investment – the franchise fee? Although some franchises have the ability to generate cash flow from day one, most brands require you to have at least some working capital. Depending on the brand model, working capital is used to help market the business on going and pay staff wages. Home based and van based franchises don’t usually require much working capital as they have low overheads but management franchises usually require at least a similar figure in working capital as the franchise investment figure.
Determine your own suitability financially. Will you need to utilise support for the franchise investment? Many financial institutions such as high street banks favour franchising as a more safer route to business ownership and are able to lend a significant figure of the franchise investment. The government also have startup loans repayable over a number of years to help you get started.
Can you justify the input of time required to get the business off the ground? There are many franchises suited for parents thanks to their flexibility. A lots of franchises can be run on a part-time basis. This means that franchisees can work the hours that suit them, balancing time around picking up kids from school or other personal commitments. Home based and van based franchises are usually the best franchises in terms of flexibility and affordability. Many home and van based franchises can be invested from less than £20,000.
Conclusion
Hopefully these resources will be of help to you on your franchising journey. There are many other resources out there, from banks and lenders to family and friends to help you along the way. If you have any queries at all, there are plenty of support contacts out there such as consultants and legal advisors who will be happy to help. Good luck with your franchising journey!
