How To Buy A Franchise In 7 Easy Steps
As we slowly but surely progress towards the end of 2020, despite the economy, franchising remains incredibly buoyant, with some franchisors recording record levels of enquiries from potential franchisees, so it appears that there is still good news to be had!
No doubt you will already have a keen interest in franchising and buying a franchise, and the aim of this quick report is to step the process out in very simple way, and with small steps to help you gain some traction, it is by no way exhaustive, but we hope helps you to make that next step into franchising with some helpful guidance, I hope you find this a useful resource
Which Type Of Franchise Should I Buy?
With in-excess of around 1000 franchises systems in the UK market, it is no surprise why you might be asking yourself this question, and having now placed many franchisees over many years, my initial response would be: what sectors (types of franchises) are you genuinely interested in? It just so happens that we know that someone who is keen on the subject is more likely to perform better in that type of business, for example, there is no point is being a franchisee for perhaps a pet care franchise if you do not like dogs and cats!
STEP 1: Choose A Franchise Type That You Are Genuinely Interested In
What Skills Do I Have?
You will know yourself what elements in life you are strong and weak in, and you really should be looking at a franchise that helps you use these strengths, maybe you can even use your entrepreneurial spirit to improve on your weaknesses, but this should not be to the detriment of your business, for example, you might have a real passion for numbers and data, but maybe you do not enjoy certain social settings like networking, so it is important to know where your comfort levels lie and find a franchise that best matches these
STEP 2: Find A Franchise That Closely Matches Your Ability
How Much Can I Afford To Invest In A Franchise?
This is an area too often overlooked in franchising, you might get carried away with the franchise type and make an enquiry based on the maybe the type of food that it is, to then much later discover that it is a ‘bricks and mortar’ franchise with a heavy reliant on capital to find assets, stock, fixtures and fittings and not least more staff!
So, be realistic with funds you either have, or have access to, without going all in!
You will need to not only consider the cost of buying a franchise, but then also working capital probably for the first year and then your own costs to cover your everyday personal expenses, there are so many businesses out that that are great, and often profitable, but they fail simply because they have run out of cash…
STEP 3: Make Sure You Can Fund Your Franchise Purchase
Why Are There So Many Franchise Options?
And this is a fair point, like when you a buying a new car, all of a sudden all you ever see if that type of car on the road, where you did not spot them before! Same in franchising, you are now active in this space and you will be amazed at how much choice there is, however, get tough on yourself…limit your research to purely the franchises you have interest within that type of franchise, and only ones that you know you can afford to purchase and operate, if you fail to do this, you will merely scratch the surface and get know-where, from here make a shortlist of maybe 10 franchises at most that you need to obtain further information on
STEP 4: Make A Shortlist Of 10 Franchises Only
How Do I Obtain Information About A Franchise I Am Interested In?
You might well be reading this report on a franchise directory, these are excellent places to start your franchise research because they typically have multiple franchisors you can take a quick view, on and then with a simple form fill in your details to receive further information, ensure you use an up to date email and phone number though otherwise you might get nothing!
Franchisors actually want to help you find the most suitable franchise for you and want you to buy their franchise, so information will be plentiful if you are receptive to receiving it and beginning dialogue, they will also however assume you have no genuine interest if they cannot see a willingness to have a two-way conversation, so get yourself in the mix of it and you will most likely be in a better position to have some great communications!
STEP 5: You Need To Show A Franchisor That You Are a Genuine Enquiry
How Do I Proceed With Actually Purchasing A Franchise?
Here is a Top Tip that will help you! Never suggest you want to buy without first going through the entire franchise application process…You might feel you are ready to buy from the outset, however, a franchisor needs to reassure themselves that you can follow a system, after all, a franchise is a system that you will need to operate, so if you do not follow it now, it will just reinforce to them that you will not be suitable to follow their tried-and-tested format, never skip this process, not least because the franchise might not end up being the type of business you thought it might be, ask questions, attend an open day (if there is on) ask to look at more information, speak with other franchisees and so on.
STEP 6: Follow The Franchisors Entire Recruitment Process!
Can I Get Any Support To Find A Franchise And Help Me Through The Process?
Great news for you, because there is plenty of help out there, you might not know that there will be a franchise division for the franchisor which will be internal or external, either way, they will be best placed to ensure that the franchisor themselves ensure they onboard potential franchisees who they also believe are the best fit, most franchise consultants also work and get paid by the franchisors, so in most cases this service is actually free of charge to you, the consultants will also often represent several brands and know the process inside out, also advising you what you should doing and when and can very easily be your 3rd party to ask difficult questions where you might not feel the need to ask the actual franchisor.
Sometimes, after this process, you, or the franchisor might not feel is appropriate to proceed, and that is actually OK for both parties, simply move on to your 2nd choice and so on…
STEP 7: Commit 100% Or Move On
If you are serious about buying a franchise and approach the process thoroughly, a consultant can seriously help to speed up the process for you. As long as you follow the system through the process, just as you would if and when you become a franchisee, so you had better get into the habit early! The information us franchise consultants can provide will help you save time and money. In the end, the choice belongs to the you of course. You will still be responsible for the due diligence, analysis and, of course, parting with your own money. However, understanding what franchise consultants do and utilising us as a tool in a franchise search process can be very valuable, indeed.
Richard Pakey is a franchising expert and Regional Director for the award-winning Lime Licensing Group and can be contacted in the following ways: