A
brand has caught your interest and you’ve started your due diligence. You may have received a prospectus and started researching them
online to see if it all adds up. If they have passed the test so far and you have met their criteria, you may be invited to attend a meeting at head office to discuss the franchise opportunity in more detail. Now remember, this is a two-way
process in which the franchisor has to be sure that you are right for their network, so they will carry out checks and plan these meetings to ensure the fit is right for both of you before you sign on the dotted line. If a franchisor is not selective about who they invite into their network, you may want to think again! Do you want to be part of a network that lets anyone join? You will want to prepare for what is perhaps your first face-to-face meeting with your potential franchisor. It is important that you show how serious you are about starting a business under their brand and working hard to make it a success. Before you go, you may wish to complete the Prospect Franchisee Certificate, in association with Lloyds Bank. This free online course provides insight into what franchising is, what franchising opportunities are available and how to evaluate them, the legalities of franchising, and business planning and financials. Participating in this course will not only provide you with a solid foundation of knowledge that you can utilise in your research and preparations, but also shows the franchisor you are doing your bit and ensuring that you understand franchising and what it entails. Be ready to answer questions; it is crucial to understand key details of your own plan. The franchisor will want to know how you intend to finance starting your own business. Do you have savings or a redundancy package that you will use to pay your franchise fee and use for working capital, or will you utilise a loan from the bank? Starting your own business is an investment of both time and money; understanding how the finances will work and how you intend to fund the business is fundamental.
The franchisor may also ask for your spouse or significant other to attend the meeting with you. This may seem like an
odd request, especially if they will not be involved in the business; however, the franchisor will want to ensure that you have the support of your family behind you while you embark on self-employment and business ownership. Depending on the type of franchise that you are looking to join, the business often requires more than just a nine-to-five commitment at the start and this can cause strain in an individual’s personal life when their family do not understand or agree with their choice of career. Having your significant other at the meeting will not only provide them with insight into the time commitment that is required to start a business, it will also show the franchisor that you have a strong support network at home to help. Now what should you ask the franchisor? There are numerous resources available online to suggest questions to ask before committing to a franchise opportunity, such as the bfa’s 50 questions to ask a franchisor (
www.thebfa.org). There are some key areas that you will want to find out more about during the course of your meeting. Firstly, find out more about the franchisor’s business itself, how long they have been franchising, how many franchisees they have, and whether they have had any business failures. Secondly, dig into the financials. Find out what the franchise fee includes, what other expenses you might incur, how much working capital you will need, and what the company’s financial projections are. Ask for evidence that these have been achieved. It is also crucial to ask questions that provide insight into how the franchise businesses works, what training is available to you, what your responsibilities are as a franchisee, and what resources are in place for the franchisor to communicate with you and provide you with ongoing support. A good franchisor will welcome your questions and answer them with transparency. They understand that the time and money you will be committing to starting your own business under their brand entitles you to ask the detailed questions that you need to in order to ensure that the franchise proposition is the correct next step for you. For more information on franchising and for other resources to help you in your journey into franchising, visit www.
thebfa.org.
October 2017 |
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