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Could You Be a Franchisee?

By: Noel Guilford
Submitted: 2007-07-17 11:35:25
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Becoming a franchisee allows you to be your own boss, gives you the back-up of an established business, provides training and support and allows you to reap the profits. Too good to be true? Well maybe not….

Franchising is promoted as being the low-risk, high reward, route to owning your own business. If it seems too good to be true it probably is, so what are the facts?

They seem impressive and even under scrutiny they are, but that scrutiny is what is all important.

The British Franchise Association (BFA) the professionally managed trade association for franchisors report that over 90% of franchisees report profitable trading within 24 months. That is impressive compared with the proportion of independent business start-ups that fail. So how do you select the franchise that is right for you and how do you evaluate the alternatives?

The first question many potential franchisees ask me is why should I consider this? Why would a successful business want me to run a franchise for them? There are several answers but the three most important are:

1. You will risk your capital, not theirs.

2. You will be totally committed to the success of the business;

3. You will bring to the business and their expansion plans, the local knowledge that they do not have.

Armed with your knowledge of why you are an attractive franchisee, you will need to deal with the sceptics and your own caution telling you that all the franchisor will want is your up-front fee and that they may not provide a sustainable business model or ongoing support. Be armed, find out about franchising from independent sources before you speak to any franchisors. Most of the clearing banks, several solicitors and forward thinking independent consulting firms like our own can all advise you. Contact the British Franchise Association (BFA) who can provide you with competent, professional advice on how to choose and partner with a franchisor.

Before taking up a franchise and parting with your hard earned – and probably borrowed – cash you need to evaluate a number of potential franchises. Do not assume because someone calls themselves a franchisor they are one! The detailed evaluation you should undertake as a potential franchisee is beyond the scope of this article but can be obtained, much of it at no cost, from most high street banks or from consultants’ websites.

These sources will enable you to decide whether becoming a franchisee is for you and if so help you to narrow down your list of potential franchisors. It is at this point that you need a franchise consultant to advise you. The BFA has a list of accredited consultants who will help you through the process of choosing the right franchise for you.

A word about banks. Most clearing banks have dedicated franchising specialists. Banks prefer to lend to franchises because the business model is usually proven, so even if you don’t have capital to invest don’t rule out a franchise; your consultant will usually be able to secure the funds for you. It’s part of the service you are paying them for!

For further information call Noel Guilford on 01244 660866 or email noel@guilfordconsulting.co.uk. Also visit www.guilfordconsulting.co.uk

Article source: Expert Articles

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