Selecting a Franchise Opportunity

Selecting the right franchise opportunity is a subject I often get asked about. As a result, I have put this list of key questions together to help people who are considering franchising:

- Why do I want to run a business?
Personal ambition, getting just reward for effort, attaining greater job security, to learn new skills, building a capital asset and to work with the family are all well-documented reasons.

- What am I good at?
Sit down and evaluate your strengths and weaknesses, your likes and dislikes. You should look upon a franchise as a long-term tenure, more a vocation than a job.

- What sort of person am I?
It will help if you are positive, outgoing and energetic, if you like solving problems and see yourself both as a self starter and a team player.

- What can I afford?
Be sure you can afford both the initial financial fee and the time spent training (so not earning) as well as any shortfalls over the first months of trading.

If  you think the venture is going to cost you £100,000 and you can only raise £80,000 be very, very sure before you beg and borrow (usually from family) to go ahead.

Once you have identified a business that: 

• Interests you
• Uses your skills/experience
• You can afford
• Matches your aspirations

The next step is to find the right franchisor and to help here are 10 questions you should ask:

• Do they have a solid trading history?
• Are they financially sound?
• Do they have a history of success?
• Is there a genuine head office support structure?
• What do they actually provide by way of support?
• If the franchisor supplies product, waht are the T's and C's?
• What is their position in the market?
• Are projected cash flows realistic? Can they prove so?
• Does the company have a finance facility with banks?
• How tough is their interview process?

You should now be in a position where you have decided to become a business owner, you know the type of business and industry you want to be in and you've chosen the franchisor to get in bed with.

Next do a Business Plan (possibly with the help of a good accountant) which explains what you hope to do, how much money you need to do it and how you propose to play the money back. Finally, approach the bank!

The magic of franchising is that it combines an individual skill set, ambition, drive and energy with the tools, training, branding and support and proven business system of the Franchise.

Remember, you're in franchising for yourself but never by yourself.