Thinking of Purchasing a Franchise? 5 Things You Should Know
So you’re likely at the point where it’s an idea, but you’re not quite sure what to do, which sector to dip into, or how to go about it. Below CEO Today hears from Steve Witt, Co-Founder of The Travel Franchise, who has some of the answers you’ve been looking for.
More often than not, when people think of a franchise, they automatically think of hospitality chains like Starbucks, McDonalds, KFC, Pizza Hut, and Subway. However, that’s not the only industry that you are able to start your own franchise in. Believe it or not, the franchise growth rates are increasing year on year and in the past 4 years, the UK’s franchise industry has increased by more than 10 percent, bringing more than £15 billion to the UK’s economy. So whether it’s automotive, business services, personal services, real estate, or even travel, the franchise options are endless.
So what’s it all about? How does it work? Why is it different from starting your own business? Here’s everything you need to know before making that all important decision!
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What will it cost?
The first thing almost everyone will look in to before buying a franchise is assessing the dent it will make to your bank balance! Like most business ventures, a franchise comes with a price. You will need to have a full understanding of what the total purchase costs will include, plus your opening inventory, any associated training costs and the amount of working capital you are going to need before you break even. It’s also important to evaluate how much can be made from the franchise and what the franchise options are. Once you find the franchise for you, delve deeper in to the financial requirements but don’t be put off by the initial figures, there is a lot of success and revenue to be made when executed properly so when weighing up the situation be sure to look long-term.
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What help do you get?
Something that will cross many people’s minds when thinking about starting a franchise is whether you will be sufficiently supported. The simple answer is yes; most franchisors will provide training and assistance before you launch your new business. If your franchise is in a specific area like travel, for example, help will be offered to find the right kind of customers from the day you start and daily assistance should be available at all times.
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Do I get my investment back?
Franchise fees are usually non-refundable with the exception offering different ways to earn your fee back. For example, there are franchises that say if you earn over a certain amount you ‘win’ your money back. Of course, this will all depend on how hard you are willing to work. Many people believe that buying into a franchise means the business is already up and running and you can sit back and relax, that’s simply not the case. Just like starting your own business, a running your franchise requires work, you just get the added help of a mentor to guide you through the process.
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Do I need experience?
No. When you buy into a franchise it’s just crucial you choose an industry you are passionate about as this will have a direct impact on how successful you will be. For example, if the training is offered to you and you know that you are truly passionate about cars or food or traveling and exploring the world, then follow that. A business isn’t a short-term dream it should be something you have always wanted to do and will enjoy doing for the rest of your life.
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How much time will it take?
Building your business can be time-consuming initially, but the rewards follow. Putting time into the business at the beginning will enable you to build a reputable company who people begin to naturally trust. Help with marketing should be accessible for all franchisees so look into what you’re offered and spend time working with your mentors. Put simply, this is not the kind of business venture you want to be doing part-time alongside another job as you won’t see the best results.
