FRANCHISE ADVICE
the
leap!
As we welcome in 2024, which is after all a leap year, Charlie Dickson asks: is it the right time to jump into franchising?
recommended equipment, and know their target customers. Typically, franchisors support their franchisees with national and regional marketing, possibly introducing franchisees to national account customers, and working to build brand awareness and reputation. In turn, franchisees are often responsible for local marketing activities, building their customer base in their local community.
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An established supply chain for products and services and
importantly, in larger networks, collective purchasing power and economies of scale can deliver higher gross and net margins for franchisees. Supply chain management will also result in consistency of product or service across the entire franchise network. This is often central to adding value to the franchise network.
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Financially, franchising can also offer significant advantages over going
it alone. The financial benefits include reduced risk as you’re working with a proven concept and brand. Research clearly shows that business failure rates are much lower in franchising. As franchise businesses come with a track record of success, they are often more attractive to lenders, so securing business
finance can be more straightforward. In addition, and importantly, franchises will typically achieve profitability more quickly – your franchise business can be up-and-running faster with sales growth driven by the franchisor’s expertise in marketing, promoting and operating the business. Robust supply chains, and the resulting economies of scale, can also add to the financial well-being of your business.
Are you the right fit for the franchise? Having the people and communications skills, together with determination and hard work ethic are often more important to a franchisor than previous related industry experience – so, look at the big picture and the opportunities that owning a franchise in a sector that really interests and excites you could deliver.
What are your next steps? Of course, whilst there are many advantages in franchising, it also comes with obligations such as a legal agreement and paying upfront and ongoing management fees to the franchisor. Before taking the leap into a franchise, carefully research the business, its values and ethos, the marketplace, and competitors, expected longevity, and the opportunity. Consider your
options, complete your due diligence, and carefully inspect the franchisor’s documentation, systems and processes. Talk to existing franchisees and ask questions, for example – what’s the initial training, does the franchisor support the network, is the marketing activity effective? etc. And make sure the franchise is a good fit for your skills, aspirations, and long-term goals before you jump onboard with a particular franchise. As is the case operating any
business, it takes focus, hard work, and commitment to make it a success, but undoubtedly franchising can offer a range of invaluable, tangible benefits, support structures and business opportunities.
Charlie Dickson, BA MBA is franchise consultant at Ashtons Franchise Consulting
ashtonsfranchise.com
BUSINESSFRANCHISE.COM 19
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