F


or most people being made redundant is a traumatic event. Lots of questions run through your scrambled mind: how will you pay the mortgage? Will you


find another job? Is your career at an end? Unfortunately, redundancy is a fact of life and no sector is immune from its impact. But, for many people, it is a chance to re- evaluate their life, career and goals. Some people may consider starting their own business. However, this can be daunting if you have always worked for an organisation. You need to find an idea for a product or service, find a market for it and go and sell it, not to mention having the finance in place to rent an office, buy equipment, hire a vehicle and perhaps even take on employees. Then you have to consider the high failure rate of startups, with an estimated 50 per cent failing within the first five years. For many people starting their own business is a nice idea, but the barriers are just too high to get over. But there is another option: franchising.


With business format franchising you become your own boss but with the support of an established, profitable and


successful business behind you. In any ethical franchise the franchise owner (franchisor) will need to have proven that their business model works, is profitable, and can be replicated by others. Franchising gives people the opportunity to start their own business without actually coming up with a business idea themselves. In many cases, the franchisee doesn’t actually need experience in the sector the franchise is in, as they will be trained and supported in its methods and processes. What is important is proven business knowledge and experience, plus other transferable skills that will make them an asset to the franchise. Banks see most potential franchisees at the end of their investigations when they have already chosen the franchise they want and are looking for funding. But it also encourages more franchisees to talk to their bank at the beginning of their franchise journey. Banks, who have many years of specialist experience in the franchise sector, can offer insightful and impartial advice on franchise sectors and specific companies. Most mainstream banks love the


franchise concept and are happy to lend franchise fees and working capital subject to normal lending conditions. A franchise- backed business is less likely to fail and therefore less of a risk. It is important that you contact the franchise department of your bank, as the high-street branches will not have the experts on hand to assist you. The bfa is launching a joint e-learning initiative with Lloyds Bank to ensure franchisees are better informed about their choice of franchise. The Prospective Franchisee Certificate is the first course of its kind, created to deliver an overview of what it takes to succeed in the UK’s £15billion franchise sector. This modular, video-based course


provides insights into everything from evaluating franchise opportunities to business management, financial understanding and legal considerations. Best of all, it’s completely free and can be taken on any device where there’s an internet connection. If you need more information on franchising after redundancy or information on the British Franchise Association, visit www.thebfa.org.


December/January 2017 | BusinessFranchise.com | 13


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