A Guide to Buying a Franchise – A Great Business Opportunity
Whether you are looking for a small business franchise opportunity or a large international business franchise, here is a guide to selecting the right business franchise opportunity for you as well as the type of franchises up for sale and tips of how to get the best one for you.
Business franchises are one of the safest options when looking for a way in which to start up and run a successful business. If you are on the look-out for a risk-free method to gaining a profitable business, then a franchise is certainly a good place to begin.
Of course, running a franchise will not suit everyone’s business needs which is why it is worth taking the time to explore the different options available to you and to find out precisely what running a franchise actually entails, prior to buying one.
The beauty of franchising is that the opportunities are increasing significantly all over the globe, due to the success that franchising is proving to be. We have put together some essential tips to help you to identify the best franchise opportunity for you – be it big or small.
Having passion for the franchise is the most important element to consider, there’s no use opting for a franchise business that will run you into the ground and cause you misery. As with most businesses, if the owner enjoys what he/she is doing they tend to have more chance of succeeding in their chosen sector. Which is why, as a business professional, you need to enjoy the products and services that you are selling as well as possessing a decent amount of knowledge too.
Do Your Research…
Ok, so there is thousands of varying franchise businesses out there and you are certain to find at least one or two in any market. It is important that you complete the relevant research prior to investing into your selected franchise as once bought, it is hard to back out. Consider all franchise options close to your expertise and ask them if you have any underlying queries. Read the franchise magazines and check out posts online – this all helps to help you to make up your mind. There are such things as franchise exhibitions too, so be sure to attend. What’s more, make sure you ask the opinions and advice of your closest friends and family, as they know you better than anyone and will hopefully be honest in the opinions that they give.
In order to become an expert before you sign the papers you need to put in the work, so complete the relevant market research to discover what demand there is for the products and services that your favoured franchise sell. Test the information that you are provided with too, especially in regard to pricing. Remember this is your future and your career, so it needs to be taken seriously. With information so easy to come by these days, you really have no excuse for not gaining the answers you require, so don’t be shy – allow you voice to be heard!
Believe In Yourself…
Instincts are funny things, but trusting them is essential. It is important that you take notice of them as if you feel uncomfortable at the recruitment stage this could be a cause for concern. Trust your instincts to inform you of whether the franchising business you have selected has a similar value to your own. If you feel this franchise is not in tune with your style of business philosophy it may be worth looking elsewhere.
When purchasing a business franchise, you are in fact entering into a business partnership in which your relationship with the franchisor will be critical to your success. Working and trusting your franchise company’s staff is a necessity, be them cashiers or senior managers. If you doubt the integrity of these staff members, then you will need to consider this factor incredibly carefully prior to committing to them.
Buying a Franchise
For anyone wanting to run a business, a franchise can seem like the perfect option, especially if you prefer the security and comfort provided by an already well-established concept. Rather than having to create your own business plan, you can use a proven business idea that is already selling well on the current markets. Keep reading and you too will be able to discover whether buying a franchise is the right option for you.
So, What Exactly Is Franchising?
Franchising can define a wide variety of businesses and products. Is it important to understand precisely what is being offered? As with anything, there are advantages and disadvantages of franchising. A franchise can be a prompt way in which to begin your business, yet there are a number of drawbacks too.
Advantages of Franchising
- Due to the Franchise being based upon an idea that’s already in use and working, you can complete your research and discover how successful they are prior to committing.
- Use can make use of a recognised and popular brand name
- You will receive support from the franchisor
- You should gain exclusive rights in your territory
- Financing a franchise can be easier, whilst the risk is reduced and shared by the franchisor
Disadvantages of Franchising
- Costs of running a franchise may be higher than you originally expected, as not only do you have initial costs to take into account but you also have to pay continuing royalties
- You will not have as much freedom as if it were your own business due to your franchise agreement usually including restrictions
- The franchisor may choose the way they do things or go out of business, which will have a knock-on effect on your business
- Other franchisors may not run their business as well as you do yours, which could in effect give the brand a bad reputation
- The reduced risk you gain from running a franchise may limit the profits that you make
Is Franchising the Right Opportunity For You?
When beginning any new business venture, there are a number of factors that require careful consideration – important factors such as whether you have the right attitude and the right skills are essential.
Consider these following pointers prior to pursuing a franchise; do you enjoy office work or physical labour more so? Do you enjoy working by yourself or would you rather work with and manage other employees? Do you like dealing with members of the public or would you prefer to work with business customers? Do you have a weakness in regards to business skills, such as finance or leadership skills – if so, do you think you can opt for a franchise that provides the support you require in your weaker areas.
Franchises to Consider:
McDonalds Franchise - McDonald’s has been a franchising company since 1955 and remains committed to franchising as a predominant way of doing business. Today, the McDonald’s franchise is the leading global food service retailer with more than 30,000 restaurants, located in more than 100 countries. If you are considering buying a McDonald’s franchise the cost of a restaurant typically ranges from £125,000 to £325,000. An initial down payment is required when you purchase an existing restaurant (25% of the total cost). The down payment must come from non-borrowed personal resources.
Subway Franchise - Fred DeLuca opened his first submarine sandwich store in Connecticut, USA in 1965 which has since grown into a multi-billion pound business. The franchise continued to expand in the UK and Ireland. Subway is a proven business with a low start-up cost and has been ranked Number 1 Franchise all over the world and with such a strong support network, you can be certain to gain the training you require. The initial franchise fee is in the region of £10,000 whilst Subway Franchisors pay 12.5% (gross sales minus sales tax) every week for royalties and advertising.
Domino’s Pizza Franchise - The full approximate cost of a store is £280,000 – exclusive of VAT of which £150,000 must be liquid funds. The price is based on the average cost of a new store build in 2010. Each new franchisee will be required to attend an 18 day Franchise Development Programme which is held at our Training & Development Centre, Milton Keynes. An average Domino’s store creates around 30 new jobs, both full time and part time positions. The applicant must be the holder of a valid UK or Irish Passport, be part of the EU or have indefinite leave to remain within the UK or Ireland.
Chem-Dry Franchise – Franchising since 1978 and originated in the U.S. A Chem-Dry franchise to date costs around £36,000 and this cost covers training, equipment and start-up expenses. The great benefit of Chem-Dry is that you don’t get penalised on making more money, so the more you make, the more money you can keep. No operating in over 51 countries, the company has grown substantially over the last two decades and provides you with a great franchise opportunity.
Utility Warehouse - Beginning in 1996, Utility Warehouse UK is a small franchise that requires only a minor investment, compared to that of a normal franchise business. On average, a Utility Warehouse franchise costs £100 to get started. Since Utility Warehouse began trading, (otherwise known as Telecom Plus) it has grown to be one of the largest and most successful companies on the London Stock Exchange. You can become an Independent Distributor, allowing you the chance to gain your own personal customers whilst working from the comfort of your own home. No experience is necessary and full training is provided.
Maid to Clean Franchise - For over 20 years, Maid2Clean has cleaned over 2.5 million cleans to residential homes all over the UK. With an initial investment of just under £10,000, you can gain a rapid return on your investment within this growing business sector. This business is constructed of up to 90% repeat business, which can be operated from home and has a minimal risk factor.
Shell - In order to become a franchiser of Shell, the minimum amount of investment to pay is £80,000. Selling in over 130 countries globally Shell employs over 100,000 personnel worldwide. Running a Shell service station is a major commitment, with many service stations staying open 24/7, 365 days a year so even when you are not on duty, you will need to be confident that your staff can run your business to the same high standard.