Top 5 Franchising Tips

1 Do your research

Read the franchise press and check out internet sites such as The British Franchise Association and Franchise Info. Visit a franchise exhibition to compare and contrast the different businesses on offer. Consider carefully the likely demand for your chosen franchise in your chosen area.

2. Meet existing franchisees

Speak to people already running a franchise business. What do they think the pros and cons are? If you have your eye on a particular franchise, ask the franchisor to put you in touch with their existing franchisees.

3. Make a business plan

You must have a clear idea, from the outset, how much investment is required, as well as how much you are likely to make.

The franchisor will usually receive an initial fee from the franchisee together with ongoing management service fees. Factor in legal costs, working capital, rent deposits, and your need for an income before you have built the business. Be realistic about your earning potential. Check the projected income against your research of the local market. Do the figures stack up?

Bear in mind that the Franchise Agreement will generally provide for the business only to be operated in a limited geographical area. Is there sufficient trade in that area to make a success of the business?

Often the franchise is for a minimum of five years – a substantial investment of time and money. You must have a clear idea, from the outset, how much investment is required, as well as how much you are likely to make. The franchisor will usually receive an initial fee from the franchisee together with ongoing management service fees. Factor in legal costs, working capital, rent deposits, equipment and staff. Be realistic about your earning potential. Check the projected income against your research of the local market. Do the figures stack up?  

4. Don’t underestimate the hard work and commitment

You’ll need the right abilities and personal attributes and a willingness to work hard. Not everyone is cut out to be a franchisee. It’s important to think about your suitability. It’s not an easy option. Ask existing franchisees about their experiences and the level of dedication required. The franchise package often includes advertising and administrative support as well as general guidance from Head Office, but you cannot rely on the franchisor to make a success of your business.

5. Take legal advice

Franchise agreements are usually lengthy, with many obligations which frequently extend beyond the period of the franchise agreement, restricting your business activities afterwards. While the terms may be non-negotiable it’s still vital that before entering an agreement you are fully aware of your financial and personal obligations – as well as the benefits.

For more information please contact us on 02380 639311 or contact Geoffrey Sturgess direct on 02380 717424 or geoffreysturgess@warnergoodman.co.uk