If you’re a budding entrepreneur with a passion to start a business but you’re not sure where to begin, a franchise could be the right opportunity for you. A franchise gives you the benefits of support, training and a recognisable and trusted brand but allows you to take control and be a business owner. The British Franchise Association’s most recent data indicates an increase in those under 30, as well as women, buying franchises.
But with a variety of franchises on offer in a huge range of industries, picking the right one can be difficult. Here are some of the most important questions to ask before buying a franchise to help steer your decision.
What are the costs of starting a franchise?
Finance is at the forefront of every business venture. The costs involved in buying a franchise differ greatly. This means even those with a small starting budget can find opportunities. However, there is more involved than simply the initial startup fee. You will see the term “working capital” appear in relation to all franchises. Working capital, put simply, is the day-to-day costs of the business and your own earnings.
It’s important to be completely certain of all the costs involved with the franchise you choose to buy. Always check for any hidden costs and, where possible, talk to others who have gone through the process, who will be able to advise you of the financial implications.
Is this franchise right for you?
Buying a franchise is a big investment, so you want to make sure that the one you choose is right for you. Although finance is an important factor, there are other decisions to take on board. It’s essential to work in an industry you enjoy and to know your key strengths and weaknesses. If you fail to consider how they fit into a particular franchise, you’ll find yourself struggling.
Is the brand strong and are you happy to represent it?
One of the benefits of starting a franchise is that you will be part of an existing brand. This could confer a number of advantages, but it is important that it is the right fit for you. If you are uncomfortable representing the brand, or it doesn’t have a particularly strong reputation, you may not thrive in this business environment. Make sure you have considered a franchise’s brand identity and how it aligns with your own ideals.
Will the franchise work in your local area?
Location is key to any successful business. For example, it may not be the most savvy business decision to open a franchise of a global coffee chain in a quiet, historic village. Similarly, opening a childcare franchise in an area with a large older or unemployed population may prove disastrous. When considering whether a franchise will work in your local area, business opportunity and character are important. It’s crucial that your business has the potential for a reliable customer base and will be in keeping with the local area. Conducting market research and identifying demand are crucial — if your chosen franchise can’t tick these boxes, it’s time to think again.