FRANCHISING. Is it the right challenge for you?
Franchising in the UK is thriving. An incredible 621,000 people are currently employed in a franchise – that’s an astonishing 70% increase in size just over the last 10 years – and it’s showing no sign of slowing.
Franchises report high profitability and significantly lower failure rates than start-ups; the upshot of operating a business with the brand, systems and proven business model of the franchisor.
This is all incredibly positive, of course. However, taking on a franchise is a decision that must be taken with great care. Franchising is a big investment, a big commitment, and for many, a very different way of working. A readymade “business in a box” with an operations manual – sounds straightforward enough, doesn’t it?
Don’t be fooled. It’s a very successful format, don’t get me wrong, but it’s not for everyone. Some like the security and support of a network with experience, tried-and-tested systems and a ready reputation. Others find they are far happier taking a risk and striking out on their own.
Of course, not every franchise is the same, so before you take the leap, do some investigation.
Complete your due diligence - research into the franchise network itself thoroughly, as well as into the franchising world. Talk to current franchisees, clients, those in the industry. That way, you avoid any hidden surprises once the ball starts rolling.
Is a franchise really what you are looking for? If doing things completely your own way is the only option you’ll consider, then setting up your own business might be a better option for you. Otherwise, you’re simply setting yourself up to conflict with your franchisor and other franchisees.
It’s important to have an aligned sense of purpose and vision with your franchisor to ensure consistency and make sure you are on the same page. Remember that a franchise agreement is a long-term commitment that demands significant amounts of faith, expectation and confidence from both sides. Look at it like a marriage – don’t sign a franchise agreement lightly. You’re entering a business relationship with the franchisor, usually for at least 5 years. That’s a big deal. As with any relationship, there will be highs and lows across this time, so make sure you choose your new partner carefully.
Find out what support and resources are offered from the franchise head office. Ask how they work with franchisees, and check this fits with the way you work. If you have any doubts, you should ask questions or do your research to dispel any concerns at the earliest opportunity, as not doing so could lead to problems down the line when disagreements or differing expectations might occur.
By making sure that you do your research thoroughly before signing the franchise agreement, it reduces the risk of things going wrong down the line, and in turn both parties having to seek legal remedies to get any issues resolved, which can be a difficult and costly process.
On the franchisor’s part, they will be doing the same, of course. Building their brand and network will have taken a huge amount of investment in terms of time, money and effort, so a franchisor will want to take a lot of care choosing the right franchisee. The franchisee recruitment process can be time-consuming and costly for them too.
If both parties are open with their intentions and expectations, both can ensure they get the answers needed to be able to make an informed decision. Ensure that you’re comfortable with each other and the way things will be done, and you’re on the right path to a successful franchise relationship.