140
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HOTtopic
nigel toplis
Nigel is the managing director of
Recognition Express. His Bardon
Group of companies also includes
ComputerXplorers and PopStarParties.
He was the chairman of the British
Franchise Association in 2006 and 2007.
E
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Do your homework
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In his second instalment of a series of articles on nding the right franchise
for you, Nigel Toplis reveals the questions and research that prospective
franchisees should be conducting…
S
O YOU’VE decided that you’d like to run
“When you buy a franchise,
Finally – speak to franchisees
your own business, you have some cash
you are investing in the proven
Most franchisees are more than willing to
to invest and you have a good idea which talk about their business, why they joined
sector(s) you are considering. The next stage is
business model more than
the franchise and what their experience has
to investigate your chosen industry. This is a very
anything else. If the franchisees
been. Bear in mind that a person’s experience
important part of the process as you begin to assess
are following it, enjoying it,
can depend on their attitude and, as with all
potential franchisors. Here are some tips to help you businesses, a positive ‘can do’ attitude generates
evaluate and compare different companies.
making a good pro t from it,
better results, so talk to a few franchisees from
Firstly, you need to do some homework about
you can do the same”
the same company if possible.
each franchisor, checking their records at Companies Here are 10 key questions to ask franchisees:
House, seeing what is written about them in the franchise press and checking
with the British Franchise Association. If they are the only franchisor in their 1. Are you making money?
sector, ask yourself why. Where do they sit in their market place? Are they a 2. Are you working long hours regularly?
key player or an innovative newcomer going places? If you were a customer, 3. Do you talk to the other franchisees often – do you support each other?
who would you choose for your business? 4. Has the business affected your family life in a positive or negative way?
Repeat business is more cost effective than nding new customers and you 5. Does the franchisor offer good support?
should satisfy yourself that the business offers the opportunity to build a solid 6. Are you lonely?
base of regular customers. Also, nd out what the average value of a sale is 7. Do you enjoy the business?
(and the typical pro t) and how much business you will need to meet your 8. Is the business delivering what you expected when you came on board?
minimum nancial projections. 9. Is your family still supportive?
Above all, is the franchisor pro table and do they offer the best potential 10. Would you do it again?
for growth? Arrange to meet up face to face – if possible speak directly with
the managing director or chief executive – and nd out what they know about When you buy a franchise, you are investing in the proven business
their market place and what trends they foresee. Ask to see three years of model more than anything else. If the franchisees are following it,
their Report and Accounts and question them about their performance. How enjoying it, making a good pro t from it, you can do the same. If the
long have they been in business, how much have they grown and what is franchisee is doing badly it could be that he or she is not using the
planned for the future? system properly or that the model itself is not good enough.
Next, you need to nd out what kind of support If you have any doubts about the success of the business model or
you can expect as a franchisee. This is don’t think it would work for you – walk away. The key to succeeding
crucial as your success can depend as a franchisee is your ability to maximise the bene ts provided by
on the level of expertise, the proven system. Change the formula at your peril!
knowledge and support
provided by your Next month: Nigel writes about getting good advice and
franchisor. In particular making the big decision…
look at:
About the author
●
Detailed Nigel Toplis is a highly respected champion of
support plans, franchising. A former chairman of the British
such as the annual Franchise Association, he heads Recognition Express
marketing plan and is the author of The 60 Minute Guide to
●
The company Franchising. ■
organisation chart
– is there manpower
in each key business
area?
●
Support systems/
software to help franchisees
●
The degree to which you
are tied in to promotional initiatives
●
A copy of the franchise agreement
April 2009
www.businessfranchise.com
BF140_HotTopic Toplis-_APR09.indd 1 25/2/09 18:17:50
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