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Tips on Starting a Franchise Business

January 13th, 2021

A franchising business is vastly becoming a trend in the business world today. Many are enticed with the benefit it brings rather than having to build a new business from scratch. Before engaging in a franchise, here are some tips for you to know what to do to start up a franchising business:

Research and gather information for the best business franchise there is today.

There are hundreds or thousands of different franchising businesses in the market nowadays. So you need to study and do great ample time of research on what are the trends in the market as well as what kind of franchising business suitable in your area. You can check websites about more franchising business information as well as read magazines and newspapers. Also, check the reputation of the franchising business you wish to have as well as check their pricing and other relevant information about the products and services. You need to ask questions from customers of the franchising business if they are satisfied with the products and services as well as their return rate to that business.

Look for a sturdy business plan as well as great business profit model.

You need to thoroughly inspect and understand the business plan of the franchisor so that you can implement that plan for success. Check as well if the franchisor’s profit models are effective and efficient. You can check their rankings in the market as well as their number of years in the business. If they stay afloat in the market for number of years it means that this business has a strong business profit model. Thoroughly check if the products of the franchising business can be acquired elsewhere with lesser cost. For example, it would be hard to franchise a local DVD or CD stores nowadays because of the rampant distribution online. You can download songs and movies online for free. So the profits for this type of franchise are low.

Have a great deal of knowledge about the financial aspects involved.

You need to know how long it will take to earn your investment back. Also, know the cost involved in running the franchise. One is the overhead cost. Examples of this cost are salaries of the staff, tools needed for operations, as well as rentals and many more. The other kind of cost is variable cost depending on your sales. Examples are fuels for delivery van if needed in the business as well as materials essential to the outcome of the product. For example in an ice cream parlour materials needed are cups, spoons and many more.

Know and comprehend the contents of the contract.

The franchise contract is the agreement signed by both the franchisor and franchisee in the terms of running the business. These are where you put in writing all the agreed concepts in the franchising business. So if you were a franchisee you must certainly read and understand first what are the rules stipulated in the contract. Know if it is for your benefit. When you fully understand the stipulations in the contract you can ask the franchisor some amendments if it is not in your benefit. You can also hire a legal team to check on the contract but if you have read and understand it you can make sure that your legal team will not twist your arms in legal fees.

Assess yourself and know your skills and capabilities.

Most importantly, you need to assess yourself if you are prepared to handle a franchising business. Also know the skills you have as well as the skills you need to develop in order to run the franchise business to success. You need also to know how to deal with pressures from the business as well as your capabilities in handling problems.

How To Choose A Franchise Business

December 15th, 2020

Creating a franchise business isn’t as simple as one, two, three; nor is it as cheaper as constructing a home-based enterprise. That’s why prior to embarking on this course, you need to educate yourself about its nature initially.

“Am I all set to handle franchising?” “What is my business likely to be?” “What are the total charges with this business?” “What shall be my target audience?” “What will be my campaign strategies and how am I going to implement them?”

But what is a franchise and how does this function, exactly?

A franchise business occurs when an entrepreneur or franchiser sells the rights of his or her business model and logo to third parties, also called the franchisee. The franchisee then pays initially for the rights to the franchise, such as the proper training, and also the machines concerning the franchise. Aside from upfront transaction, the franchisee will pay the franchiser a regular royalty charge, based on the income percentage of the franchise.

The rule about the franchise is you follow the business structure of the franchiser – from the products to choose from, the type of services offered, staff’s outfits, working approaches, trademarks, and signage.

One of the primary reasons for franchising is to slice the fee for constructing chain stores and preventing any legal responsibility at the same time. Examples of recognized franchises comprise McDonalds, KFC, Kenny Rogers, Starbucks, and a lot more.

Self-Evaluation

Assessing your capacity and capability to obtain a franchise is an extremely substantial move. Can you manage the stress of owning a business? Are you prepared to take on the obligation? Likewise, it’s essential that the business you choose is right for you.

Being Aware Of What Your Business Will Be

While buying the privileges to an already-established and well-known franchise business, it’s better if you do a comprehensive research and a well-thought plan before you decide to move with the next step. Remember to check around for help or one can also render the support of an experienced franchise attorney.

Overall Costs Of The Franchise

How much will the franchise set you back? From the initial transaction, to the royalty rates, to assorted expenditure – it’s a smart idea to calculate the projected sum that the enterprise can cost you. Then there’s the return on your investment; is the total price gonna be worth it?

Establishing The Target Market

A franchise business is just like any other business. You have to perform an industry investigation and group analysis. Is your franchise going to attract a sizable industry? Then what is the kind of market you’re likely to focus on?

Franchising Businesses Offer Opportunity for Entrepreneurs

December 8th, 2020

It is the dream of many to set up and run their own business – to be their own boss and really take charge of their own life. However, for most, it remains nothing more than a dream. For some though, who have the right amount of conviction, dedication and talent, it does become reality. Even those succeeding in setting up shop can fail quickly though, which is why many look at franchising businesses to provide the vital support that they need.

It is far more than support that a franchised business provides though, which is partly the reason for increasing numbers of people venturing into the sector. From providing access to funding, through providing a near immediate turnover to offering long-term success, there is much to be argued for it.

Franchising businesses are proven to work

When a business owner decides to franchise, there are certain clear elements that need to be met. Above anything else, it is essential that the business model has been proven to work. The best franchises can prove this, allowing the investors to follow the guidance given with confidence, whilst having the ability to mold the business for local conditions.

Franchises offer increased success

When the advised business model is followed closely, a franchise can also offer greater opportunities for success when compared to regular start-ups. This is also down to the easier way in which customers can be attracted, particularly with the best franchising businesses already having a national presence, to create local interest. Such presence also allows for easier and more effective marketing, which helps maintain a level of trade.

Securing finance is easier

Such is the nature that franchises provide, many big names and local banks and other lenders are eager to finance their set-up. As well as providing the initial finance to invest in successful ventures, it is also possible that better rates can be found, with lenders understanding that franchises have a better chance of succeeding.

Franchises provide faster results

For all new businesses, it can take time to get established in the local area. Building up awareness and creating a positive opinion can also be cost consuming. However, franchised opportunities are one step ahead of regular set-ups, because of the awareness that is already present, allowing the turnover to reach higher levels more quickly.

Ongoing development and access to support

Another area which allows franchising businesses to increase that likelihood of success for their investors is in the support provided. Right from the get-go, the best companies provide centralized training in how best to maximize opportunities. Further than this though, with franchisees the country over able to provide help and advice, there is a mechanism in place to answer any challenges that can present themselves.

At every level, franchises provide a greater chance of realizing professional ambitions than any other route. Selecting the best franchising businesses to work with is essential for these achievements to be reached though, which is why selecting what to invest in needs to be done with thorough analysis.

Are You Right For The Franchise Business Model

November 25th, 2020

Before we can tackle this completely subjective question, we’ll have to cover a few basics first:

What is a franchise?
What are your strengths?
Have you ever used a behavioral assessment tool like the DISC Profile or Meyers-Briggs personality test?
Do you have clear, written goals for personal and professional achievement over the next 10 years?
Have you declared your values and know what it will look like to support them behaviorally?
Have you reached out to your local SBDC (Small Business Development Center) or SCORE (Service Corps of Retired Executives) chapters?
Let’s begin by defining what a franchise is exactly.

Did you ever watch an episode of the hit television series, “Breaking Bad?” If so, everything you need to know about a franchise, Walt described in an early episode where he argued with Jessie – “I’m manufacturing, you’re distribution.”

Yes, I’m telling you that everything you need to know about the franchise industry you can learn from a fictional drug dealer.

My colleagues will probably roll their eyes and laugh me out of the building, but let’s keep it simple okay.

The franchise model is simply a form of distribution; a method of expansion; a way to grow your business. Some other popular growth strategies would be:

utilizing bank loans or other external investment capital to fund additional locations and employees
partnership, merger or acquisition with strategic partners or competition
licensing

Not so scary once you level set with that info is it? Not as complicated as some tend to make it either. There are of course Federal and State definitions as well which are important to recognize:

Federal Law: Under the FTC Franchise Rule, there are 3 elements of a franchise:

Trademark. The franchisee is given the right to distribute goods and services that bear the franchisor’s trademark, service mark, trade name, logo, or other commercial symbol.

Significant Control or Assistance. The franchisor has significant control of, or provides significance to the franchisee’s method of operation. Examples of significant control or assistance include:

approval of the site
requirements for site design or appearance
designated hours of operation
specified production techniques
required accounting practices
required participation in promotional campaigns
training programs
providing an operations manual

Required Payment. The franchisee is required to pay the franchisor (or an affiliate of the franchisor) at least US$500 either before (or within 6 months after) opening for business. Required payments include any payments the franchisee makes to the franchisor for the right to be a franchisee. These include franchise fees, royalties, training fees, payments for services, and payments from the sale of products (unless reasonable amounts are sold at bona fide wholesale prices).

If all 3 elements are present, then the relationship will be a “franchise” for purposes of the FTC Franchise Rule.

State Law: State law definitions of franchises vary, but the common themes include:

Trademark.

Required Fee.

Marketing Plan. The franchisee is granted the right to engage in the business of offering, selling or distributing goods or services under a marketing plan or system substantially prescribed by the franchisor.

Community of interest. The franchisor and franchisee have a community of interest in the marketing of goods or services.

Moving on… I live in the San Francisco Bay Area and everyone loves to talk about their new Start-Up.

I’ve got news for you: stop talking about the start-up and get to work building your business. Likewise, stop talking about starting a franchise or getting into franchising; just embrace the concept of starting a small business with the rules, regulations, process, and operations already pre-determined.

Keep in mind, determining whether you’re right for the franchise business model is subjective; but past experience is a good sign of future accomplishments.

How do these following questions make you feel?

Do you enjoy being part of the team?
Do you enjoy following established systems?
Have you ever managed people?
How do you feel about having to Pay-To-Play?
Are you comfortable following an established set of rules? How about with a Draconian or militaristic sense of detail?
Do you need your own creative ideas and individual contribution to be acknowledged?
Can you afford not to pay yourself a wage for at least 12-18 months?
Are you willing to invest $25k – $45k of your hard earned cash, before bank loans, in order to earn a spot on the team?
Have you ever prepared a business plan? If not, are you prepared to reach out for advice?
Do your family and friends support your decision to buy a franchise?
Have you ever been in business for yourself?

askmebet

Overview of Malaysia Economy and Franchise Business for Asia Franchises and Franchisees

November 5th, 2020

Franchise Glance

The Malaysian economy showed good growth in 2012/2013 and is predicted to exceed 5.4% in 2014 with similar growth forecast to continue through to 2016. Demand is high in Malaysia with over 60% of Malaysia’s GDP contributed by domestic consumption.

In 2013, 480 new franchisees entered the market and as of August 2014 there were over 700 registered franchises with more than 6,000 outlets. The industry has growth capacity as it presently accounts for only 5% of total retail sales. Around 25% of franchises are overseas controlled and domestic franchisors are global looking, being in 51 countries totalling 1,494 outlets.

International expansion by domestic franchisors:

1) Indonesia – 22 franchisors

2) China – 14 franchisors

3) Singapore – 17 franchisors

4) Philippines – 10 franchisors

5) India – 10 franchisors

6) Vietnam – 10 franchisors

7) Brunei – 10 franchisors

8) Arab Saudi – 9 franchisors

9) UAE – 9 franchisors

10) Australia – 7 franchisors

Malaysia has Asia’s and probably the world’s most franchise friendly government. Malaysia views franchising as an important economic driver and as such it offers various sweeteners to encourage the expansion of the industry.

The Malaysian government actually has their own franchise development department which created the National Franchise Development Master Plan (PIPFN) 2012-2016. The plan sets out challenging goals and strategies:

To contribute 4.3% of GDP by 2016.
To contribute 9.4% of GDP by 2020.
To have a 16% increase in the number of registered franchise companies by 2016.
To make Malaysia the franchising hub in South East Asia.

The plan is hitting its milestones with franchising contributing around 2.7% of GDP in 2012 and the industry generated approximately US$7.5 billion.

The Perbadanan Nasional Berhad (PNS) is an agency owned by the Ministry of Finance Incorporated (MOF Inc.) with the mandate to lead the development of Malaysia’s franchise industry. Several great finance schemes and tax incentives are available to help existing businesses grow through franchising and to attract new franchises into the country.

For example, the Franchise Micro-Financing Scheme allows prospective entrepreneurs with lower incomes the opportunity to start businesses with mitigated risk. The PNS allocated RM8 million (approximately US$2.5 million) to the program and as of early April 2013, RM6 million (approximately US$1.9 million) was delivered. The Ministry has stated that it is not averse to pumping more funds into the scheme.

Another scheme-The Franchise Development Assistance Fund-encourages local businessmen to expand their existing business into a franchised business. Businesses that have already been successfully developed as franchises are eligible for reimbursements of up to 90% for the overall franchise system development costs incurred, for a maximum amount of approximately US$31,118.

In addition, low interest loans of up to 80% are available to new franchises with no guarantor or collateral required and of particular interest to overseas companies looking to enter Malaysia is the availability of assistance for master franchisees.

To take advantage of these schemes and for further Malaysian franchise information please visit:

http://www.pns.com.my/franchise/franchise-program/

Malaysian consumer

Malaysia is geographically well positioned for franchisors targeting Asia. The central location and high domestic consumption has made it a strong initial target for franchisors looking to expand throughout Asia. As franchisors increasingly tap this market the Malaysian consumers are becoming used to, and can distinguish, global brands. The modernizing and sophistication of the consumers towards global brands is particularly prevalent among the young up and coming, more affluent Malaysians. By and large, the population is young with about 70% of Malaysians in the working age bracket of 15-64 and 28% aged 15 years and below.

An impressive 97% of the population are employed and the rise in Malaysian consumer’s disposable income has created a relatively new change in purchasing habits and this change is not expected to decline in the foreseeable future.

Consumer purchase drivers

Malaysian culture and their belief system is very strong and will affect purchases made by the consumer especially in non-durable goods (including food and clothing) sectors-so please be aware.

Similar to other Asian countries, they regard freshness and quality as an important factor when purchasing groceries and when eating out. The labeling of products to display these key points can be a good USP for your business and differentiate yourselves from domestic brands.

Low prices, though still influential, are no longer regarded as the most important purchase factor: only 69% of consumers in Indonesia consider it their most influential reason when choosing a store. However they are still not going to over spend, Malaysian consumers are the most prolific sale-seekers in Asia and a brand that offers a loyalty scheme and/or runs promotional campaigns has an advantage.

With the literal rise of supermarkets and malls comes the associated driver of convenience and for the franchisor, concession opportunities. Malls offer a wider range of foreign products/services for the consumer to try. The convenience of longer opening hours and being able to buy everything under one roof works well with the growing number of hours Malaysians are now working.

Although there is a trend for healthier eating, the traditional diet of the Malaysians is not so healthy. The Ministry of Health findings estimate that Malaysian adults consume the equivalent of 10 teaspoons of added hidden sugar, more than the amount recommended by the World Health Organization. The awareness of healthier living, despite being promoted by the government, is not completely developed yet and products that contain high levels of salt or sugar continue to be popular among Malaysian consumers.

This is good for franchisors as there is the best of both worlds. There is a healthy market-(excuse the pun) for higher calorie or salty products and there is a growing niche market for healthier products. To target the latter market make sure the whole marketing campaign goes 100% to specifically target the health benefits and quality ingredients used. Some brands are cleverly tying in health checks or product comparisons to extenuate the healthier properties of their products.

The bottom line

Malaysia is similar to Indonesia. There has been good growth over the past few years and this is forecast to continue. As a result of the improving economy, consumers are more optimistic and there is new consumer confidence in the market. Domestic consumer demand is high and the rising Malaysian middle-class has led to greater discretionary spending. It is still some steps behind more advanced countries in Asia but with such a franchise friendly government, the environment looks healthy.

Building Your Dream Franchise Business

October 26th, 2020

Everybody dreams of becoming his or her own boss, but is it so easy to kiss your job goodbye? Yes, it is possible if you open a franchise business. Owning a franchise business opens limitless opportunities; you can become your own boss and lead a great lifestyle.

With all the resources available on franchise opportunities nowadays, locating your ideal franchise business has become much easier. There are plenty of websites that provide detailed information on owning a franchise business. These websites help potential franchise owners find the best possible franchise information on business opportunities and franchises for sale. These franchise directories are essential tools to help entrepreneurs find new business ideas for any new enterprises. Most of the more established franchise directories extensively cover the franchise industry sectors such as retail, business services, home improvement, food services, and senior care etc.

As there are a huge number of franchise opportunities available, how do you pick the right franchise opportunity for you? It is important that your interests match your choice of franchise business. To start with, carefully take stock of what you really enjoy doing, what you want out of your business and what you want to achieve out of life. Write down a list of your interests, desires and passions. What kind of jobs have you held before or what past opportunities have you explored? After you have reflected on these questions, give some thought on the type of franchise business opportunities that appeal to you and that can help you realize your ambitions and goals.

Once you are committed to buying a franchise business, your next step will be to decide which service or product you want to invest in specifically. You should also investigate the scope and the details of the franchise business you want to get into in terms of profitability, investment opportunity, market viability etc.

Before starting a franchise business it is a good idea to consult with experienced entrepreneurs in the same field of business. Owning and operating a business is a large commitment as it involves a lot of money, time and energy, so you do not want to be stuck running a business that you do not enjoy nor is the right fit for you.

Many franchise businesses opportunities in the United States are a perfect fit for small business owners starting down the road to entrepreneurship. Starting with a small business franchise makes sense if you are looking for an opportunity that is a safer investment than traditional business.

Explore the possibility of franchise business ownership if you want to lower the risk of owning a traditional business. Before investing in any franchise business, be sure to get a copy of the franchiser’s disclosure document. Established enterprises such as coffee franchises or restaurant franchises depend on their franchises to penetrate untapped market segments at a lower risk of failure. For any franchise business, the brand recognition and the high quality standard already established by previous chains provide a huge advantage to new franchisees.

Five Advantages and Disadvantages to Franchise Businesses

October 15th, 2020

Many Americans dream of owning their own business and being in control of their destiny. The only issue is that very few folks will actually dive in and take the risk to become their own boss. The reason for this holdback: it’s the fear of failing.

The rate of failures on startup businesses varies from person to person. However, Scott Shane of Case Western Reserve University often has his data cited. He states that failure rates in one year are about 25 percent and 10-year failure is about 71 percent. What do these numbers mean? If four businesses begin in one year, one business is bound to fail in that first year. 71 percent of businesses currently open will be shut down in 10 years.

Understanding Entrepreneurship In Franchising

Since failure rates are high, it’s of no surprise that very few people will try their hand at it. Many people don’t know that a way to become a business owner is to start a franchise. Franchises have less of a chance of failing and are actually do well monetarily. Using the same 10-year study from above, nearly 62 percent of franchises are still in business, an extremely high figure.

Why Franchises Stay In Business

Why is it that franchises stay in businesses longer than a startup company? Franchises have a large quantity of advantages that novice entrepreneurs don’t have, which means the venture is less risky.

Five Advantages of Franchises

Advantage 1 – Training and Support

Franchise businesses will give new franchise owners plenty of training and support in the beginning. Franchisers get a fraction of the profits so it’s in the best interest to ensure that the spin-off franchises do well. Smaller franchises offer people consequential support.

Advantage 2 – Purchase Company Model, Not Just Name

The big reason franchises tend to last and thrive is that the business model is already working. It’s not just about the name or the brand; it’s the model itself that helps to make this franchise successful.

Advantage 3 – Bargaining Power

When you have a franchise, you have some bargaining power with your suppliers. Independent, new business owners don’t have this kind of power or luxury and must earn it, unlike a franchise.

Advantage 4 – Expert Support

When you get involved with a franchise, your business is not alone. If you ever have problems or questions then you seek out some advice. Whatever business franchise you go into, you’re bound to have hundreds of people you can turn to that would love to give you advice so that you succeed. Many larger franchises will also give individual training and support.

Advantage 5 – Well Capitalized

Most franchises are well capitalized, which makes them have a high survival rate. Most startup businesses don’t have this luxury. People who want to get involved with franchises usually have just enough requirements to buy into the business.

Five Disadvantages of Franchises

The disadvantages of franchises are pretty clear-cut. Make sure to understand them before you decide to that the franchise business is right for you.

Disadvantage 1- Loss/Lack Of Control

Independent franchises often have to follow the guidelines set forth by the franchise including what kinds of tables to use, wallpapers and more. If you don’t want to give up that control, this won’t be the business for you.

Disadvantage 2 – Less Long-Term Profits

Franchises are a big business but making it rich isn’t always there. You’ll earn a decent income but nothing like Microsoft or any other Fortune 500 company.

Disadvantage 3 – Hard To Sell

When you have a franchise, it’s harder to get out from underneath it especially if it seems the parent company is having problems.

Disadvantage 4 – Possibility Of Parent Company Going Out Of Business

It doesn’t matter if your business is doing good or not; if the parent company goes under, so will you. Make sure you choose a company that’s been doing well, both in good times and in bad.

Running a Successful Franchise Business

September 25th, 2020

It is a lifelong dream for many to be their own boss and own a business. However, running a business can be very challenging and financially risky. Finding the right franchise that fits your personality and lifestyle can reduce the risk and make the dream of owning a business come true.

To understand how a running a franchise business can work, you must first understand what it is. A franchise is a business agreement where an individual purchases the right to use a company’s name and sell the company’s products or services. The company, or franchiser, retains the right to set guidelines and standards that you, the franchisee, must meet. Failure to comply with the company standards will result in the individual losing their rights to the franchise.
There are many successful franchise businesses available to potential proprietors. A major advantage of franchising a successful company is that they have already established their brand, advertising campaigns and have tested products and services. They know how to succeed, and have already eliminated any mistakes. A person entering into a business on their own must go through all of these pitfalls before any success can be measured, but a franchiser has already done the startup work for you and found a business plan that is profitable.

You ask yourself some very important questions before you enter into a franchise agreement with a company. Do you enjoy the freedom of testing new ideas and business models or would you rather stick to a proven track record or success? Remember that owning a franchise business means you must stick to the business plan of the franchiser. How much money can you afford to spend? It costs a lot of money to get a franchise running, and there is never any guarantee for success. Often times, you – the franchise owner – may have to dip into a reserve savings in order to pay your bills and maintain payroll.

Are you willing to work long hours? Owning a business requires you to be ready to tackle any problems that arise at any time of the day or night. Owning a franchise business is no different. It is not uncommon for a franchise owner to put in 12 or even 16-hour days, especially in the beginning. A franchise owner must take on multiple responsibilities, including human resources, marketing and accounting. Make sure the dedication a franchise requires is something you – and your family – can handle.

Find a reputable franchise consultant to help you narrow your focus and find the business that is right for you. A franchise consultant will be there to answer any questions you may have and help you navigate through the uncertain waters of franchise ownership. It can be overwhelming when trying to decide what franchise would be the right fit for you and your family. A franchise consultant will provide you with the research and support to help you make an informed decision and offer guidance in quest to become a successful franchise owner.

5 Ways to Find Out If a Franchise Business May Be Right for You

September 6th, 2020

Are you the right kind of person to start up a franchise opportunity? Look at our 5 hints below to see how you measure up:

1. Do you like the idea of operating a proven business?

If the answer is positive then a franchise opportunity is simply that… a business idea which has been proven and found to be effective. Quite simply, you benefit from somebody else’s time and effort in trying and testing out a viable business structure. Should the reply be that you simply enjoy the challenge of taking a commercial idea of your own design and testing it for yourself, then a franchise may not be what you’re seeking.

2. Are you a Leader or perhaps a Follower?

If you tend to be a follower and you are happy to go along with other peoples ideas, then a franchise opportunity could well be suitable for you. One of the most crucial aspects of a franchise business is that the franchise system is ‘followed’ as meticulously as possible so that it can be successful. If, however, you prefer to adopt the lead position, invent some of your own concepts and others have a tendency to follow your lead, you may find a franchise opportunity cramps your entrepreneurial spirit.

3. Are you willing to learn?

A central part of adhering to a successful formula will likely be to learn how it really works in and out; getting educated on the processes and business procedures which will help you operate the enterprise effectively. Fortunately, the majority of franchisors provide training as an integral part of the franchise package. If you’re keen to master new methods and business processes, even though they might go against how you might have done comparable duties before, then you could potentially find a franchise business suitable.

4. Do you think you’re willing to work hard?

This is certainly an issue that could apply to any business endeavor regardless of whether its it is a franchise or a traditional business model. Do not be fooled into thinking that a tried and tested system guarantees that it’ll be successful regardless of whether you work hard or not. Like an engine, the tested approach needs to be driven for it to accomplish anything; the harder you propel it forward, the greater progress you could make. The important thing here is not really the work itself, but understanding that operating your own venture could involve a good deal more time and effort than simply doing a regular job where you arrive at 9.00am and leave at 5.00pm. Not surprisingly you will discover different types of franchise which will control the kind of work you’ll do. A white collar business opportunity, for example might involve longer hours working from your desk, where as a van based business could indicate you are out visiting clients a lot or working more using your hands. Particularly in the early stages, you might find yourself needing to work more time and putting in one hundred and fifty percent energy to be successful. But you will have the satisfaction and pay back of building up your own business.

5. Do you have access to spare capital to invest in starting up a business?

Every business enterprise needs a quantity of capital in order to get off the ground. Depending on the franchise business decided on, you will find a varying startup fee paid to the franchisor which could be as small as a few thousand pounds or it may run into tens of thousands. You will also need working finance to start the business; getting hold of business premises if needed, initial supplies, etc. Even if you don’t hold much yourself, it may be you have a family member that might wish to make an investment or you can just ask the franchise department of one of the major high street banks that specialise in financing franchise startups.

Naturally the five tips above aren’t designed to be inflexible and fixed rules; everybody is different! It’s made to be a general guide or rule of thumb which may offer an indicator to whether a franchise business may be suitable for you. If the answers were overridingly negative it might indicate that you would discover that operating a franchise business challenging or conflicting. If you feel that you can get over those challenges, running a franchise can still be a possible choice, and something you might look at. If your responses were generally positive then its highly probable that you might well take pleasure in running a franchise business and it might be time to start a search for your franchise match.

21 Secrets to Franchise Business Success

March 13th, 2020

1) Evaluate your tolerance for risk

Opening a new business is a scary prospect. There’s a lot of personal, professional and financial risk to consider. It’s natural when contemplating such a profound step in your career to look at ways to manage your risk and increase your chance of success.

The Small Business Administration conducted a survey that found 62% of non-franchised businesses failed within 6 years. A separate study by the United States Chamber of Commerce found that 97% of franchises were still open after 5 years.

The research conducted by these independent third party organizations clearly demonstrates that choosing a franchise business carries significantly less risk than starting a business on your own.

2) Work with what you’ve got

Making a list of your strengths is easy. But when launching a business, it’s also important to make an honest assessment of your weaknesses.

Before you get to work selecting a franchise, take the time to develop a list that honestly depicts your strengths and weaknesses as a potential business owner. Then use this profile as a tool to help with the decision making process.

Ask franchise owners questions about the duties they perform, and compare the job requirements to your profile. If the business has the potential to be a good fit, the skill sets required to run the business will either be skills you already have or skills you can learn quickly. If this is not the case, it’s best to keep looking.

If a certain aspect of a franchise has a steep learning curve but the business is otherwise a great fit, you may want to consider hiring someone experienced with that position. If this is the choice you make, be sure to include their salary and benefits in the financial business plan.

3) Remember to run the business

Many potential franchisees make the mistake of thinking they’re limited to buying a franchise in their current field. In fact, this might be the worst way to go.

Some franchises will not allow someone skilled in a particular industry to buy a franchise in that industry. For example, a mechanic may not be allowed to purchase an auto repair franchise. Skilled technicians sometimes find the transition from hands-on work to management work difficult to make, and are tempted back onto the floor to do the job they’re familiar with.

The problem with this is that you grow the business by running the business, and what a franchisor wants to see on the bottom line is growth. A business owner needs to be out networking, marketing and interacting with customers. If there’s too much work on the floor of an auto repair franchise, then the owner – even if he’s a highly skilled mechanic – needs to hire more mechanics.

Basic business skills are transferable to any franchise. If your current position involves universal roles like sales, marketing or accounting then your franchise options are practically unlimited.

4) No business is recession-proof

There’s no such thing as a business that can’t be impacted by a faltering economy.

There are, however, certain industries that are considered recession “resistant.” These are generally products and services people can’t do without no matter how much they’re cutting the budget.

The good news is there are hundreds of great franchise opportunities in recession resistant industries. The following are just a few examples:

Top recession resistant industries: Food · Automotive · Healthcare · Medical·Clothing · Education

Recession resistant franchise industries: Fast food restaurants· Automotive maintenance, parts and repair · Weight loss and fitness · Resale shops and discount (dollar) stores · Education (tutoring) and child care

5) Objectively evaluate professional advice from personal sources

Friends and family have your best interests at heart, and their advice comes from a place of love and concern for your well-being. No one would suggest making the personal, professional and financial commitment to launching a business without consulting your loved ones.

But friends and family are not subject matter experts and their advice can – intentionally or not – discourage a new business venture. The people who love you worry about what could happen if you fail, and their instinct will be to protect you from the risk.

When it comes to the final decision whether or not to proceed with purchasing a franchise, of course you will carefully weigh all the advice you’ve received. The key is to rely most heavily on the advice offered by industry professionals.

6) There’s no such thing as a free lunch

There are countless “free” franchise brokers and consultants out there claiming to offer unbiased information on franchise opportunities. They will work with you to assess your needs, and use your professional profile to help make recommendations on franchise opportunities that may suit you.

The problem with these services is that they get paid by the franchises for selling franchises. That means they are naturally only going to show you options they’ll get paid for. And in the case of high profile franchises that may offer them 2 to 4 times the average commission, there’s a real risk they may steer clients to those businesses whether they’re a good match or not.

These broker services may have access to detailed data on several hundred franchises and they can be a great source of information. Just be cautious about their recommendations, and get a second opinion before investing your money.

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