Franchise Advice


operating in competitive markets. Some investors will want to join an established franchisor with many existing franchisees but others may prefer to look at an opportunity with a business that is new to franchising but has the experience of operating company- owned outlets. These ground fl oor opportunities often have the benefi t of having more available territories and may even offer a lower entry franchise fee for their fi rst few franchisees. Typically, when deciding which franchise to investigate, a prospective franchisee may draw up a shortlist of around eight to 10 franchisors and apply for their prospectus, look at their website, and commence their due diligence. This may then lead to meetings


with anything from one to fi ve of these franchisors. During these meetings and subsequent conversations and investigations, both parties will decide if the other is right for them, and if it is, then the franchise agreement is signed, and the franchise fee paid. There is one other factor that people often consider; I call this the ‘interdependency factor’. The question here is what can the franchisor offer me for my franchise fee that I couldn’t get by spending my money setting up my own business instead? The answer to this will vary from franchise to franchise, but could include better buying power from suppliers, centralised services and bespoke operating software. In all cases, this would include being able to trade using the franchisor’s


brand, being trained in tried-and-tested methods, and having the help and support of people who have done it before and learned the lessons. Moving from employment to self- employment is a big decision, and will probably be life-changing. If your chosen business is a franchise, and if you choose wisely, then it becomes a far less risky move, and one that should prove to be a fruitful one to be satisfi ed for the sale of your franchise to proceed with the franchisor’s consent. n


ALAN WILKINSON


is senior franchise consultant at The Franchise Development Centre


October 2014 | Businessfranchise.com | 31


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