Put it to the test before you invest
If you’re thinking of joining a franchise, Pip Wilkins, CEO of the British Franchise Association (bfa), gives her top points you should consider
F
ranchising presents a variety of business opportunities across an eclectic mix of industries, with more than 900 brands using the model
in the UK, so there is something for everyone and every budget. If you are thinking about buying a
franchise, you should make yourself aware of exactly what is involved and how to identify the businesses that best suit your needs. Making sure that the opportunity is what it appears to be is absolutely critical. Here are some of the key areas to consider and questions to ask yourself:
Research Your research into a brand and its people is absolutely crucial to finding the right franchise for you – and avoiding the wrong one. Be thorough, and include the following: Speak to existing franchisees Understand the business Training Ongoing fees The people Success rates Recruitment
Membership of the bfa The bfa accredits franchisors using a stringent set of criteria based on operational procedures, franchisor/
franchisee practices and the European Code of Ethics for Franchising. All members are listed on the bfa’s website to allow potential franchisees to determine which ethical franchisors have passed these checks.
"A good fra nchisor won’t pressure you into a decision"
Financial commitment Franchise businesses come with a wide range of investment levels. Assess and understand, from the beginning of your process, what you can afford to invest and how much you are prepared to borrow – and remember to consider working capital requirements while your business is establishing itself and may not be turning a profit. There are major banking groups that the bfa recognises as specialists in franchising: HSBC, Lloyds, NatWest, Barclays and Metro Bank. Make sure that you ask for their franchise departments from the outset.
Lifestyle You need to be happy with the necessary commitments that come with making your new business a success. Franchising allows you to develop your existing skillset, or become your own boss doing
something you are passionate about but inexperienced in, with full support and training, so think about what you are good at and can take on wholeheartedly. You also need to consider the support and understanding of friends and family, which some franchisors like to gauge as part of their recruitment process.
Professional advice There are a host of professional advisers accredited by the bfa that specialise in franchising. These can be invaluable in making sure that you’re taking the right steps; for example, when it comes to reviewing the franchise agreement, make sure you go to a specialist franchise solicitor – it can save you a lot of money in the long run. Finally, take your time! Make sure
you assess and reassess everything as part of your research before you fall in love with a concept and a dream; you’re parting with your hard-earned money and making a commitment for several years, so it’s essential to be certain rather than making an expensive mistake. A good franchisor won’t pressure you into a decision; they understand the level of undertaking required and want serious people to join their network. Visit the bfa’s website (
thebfa.org) for
objective advice, tips and information, as well as a list of all accredited member franchisors and advisers.
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