Franchise Advice
A safe bet
Richard Holden advises that by doing your homework you can make a safe investment with the right franchise
it is not guaranteed and there will always be people who start up in business without doing their homework. Thorough research into the franchise opportunity, local market, competitors and the financial projections is an essential element to anyone building a successful franchised business. Setting up your own business under the umbrella of an established brand and a proven business format should give you a better chance of succeeding. Not all franchise opportunities, however, offer the same level of training and support to their network of franchisees and surprisingly
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Businessfranchise.com | March 2012
s many as two-thirds of small businesses do not survive during their first three years. The success rate for franchises is significantly better – but
some franchises have a significantly higher failure rate than the sector average of around five per cent per annum. So how can you back a thoroughbred franchise investment rather than losing your money betting on a nag? Having decided that you are suited to franchising you need to narrow down the hundreds of franchise options available to you. Many are easy to eliminate if they do not meet your criteria on investment level, the income you require, business type and franchisee selection requirements. You should have a clear idea of whether you wish to be an owner-operator or manage a team of staff. Be honest with yourself when assessing your own skills and matching them to the particular franchise you are interested in. Investigate any other franchises operating in the same sector
before making an approach to the franchisor for further information. The internet is invaluable when
researching information on franchises. Trade magazines and exhibitions are also excellent resources available to you. Fountains of knowledge that are often overlooked are the franchise departments of banks who can offer impartial guidance on the franchise opportunities you are considering. Franchise experts in the bank will often have a very good understanding of how existing franchisees are trading and whether there have been recent failures within a franchise system.
It is essential that you speak to as many existing franchisees as possible to establish the level of support they have received from the franchisor and whether they were able to achieve their start-up financial
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