Tag Archives: franchise

Business Opportunities – From the Strange to the Safe

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For years, people across the UK have wanted to break out of their business mould and start something new and fresh, something where they hold the reigns and can make important decisions for themselves, something where, maybe, they could earn more.

As far as business opportunities go, there are a number of ways somebody can stake their claim. Some are bizarre and risky, some are safe and profitable. We’ve presented a number of them here from both sides.

One avenue that people go down is invention. If you can create a novel product that would be useful to people, or that people don’t need but want, then you have a big head start on making your own business and drawing in profits. Weird enterprises that have come out of this are the Ottimat, a mat made from human hair that’s used to soak up oil spills, and Smartgrow, another mat woven from human hair, but this time used to aid in plant growth.

The fact that there are two successful products based entirely on waste human hair might be surprising, but it just goes to show the variety of places innovation can come from.

Another option might be to offer a new service, either by combining two or more already existent services into one, a coffee shop, a bar and a beauty salon, for instance, or recognising an opportunity created by the emergence of a new hobby or invention, such as training for video games.

However, these all require you to recognise the gap in the market and hope that nobody else has beaten you to it. They are not safe businesses, nor do they give a guaranteed profit. Because of this, many people opt to buy in to a franchise. With a franchise, you’re offered support from people with experience in the trade, and can use an already established brand.

There are many more options to consider when looking to strike out alone. This post should have presented a few ideas, but independent research is an important part of any business plan.

Franchising- an opportunity for growth in the current climate

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A franchise opportunity can be a highly effective business model, especially with considering the current challenging economic conditions. Buying into a franchise limits your exposure to risk whilst also providing you with the framework to achieve real business growth.

Such a business opportunity should allow you to replicate the success a franchisor has already had, the same success that has enabled them to offer a franchise for sale. It should be running with a robust business model and the potential for growth in it’s own market should have been recognised before a franchise opportunity is offered. There should also be a clear structure for the new franchise and appropriate resources and support should be available to ensure the business start’s with strong foundations.

An important part of this is the relationship between the franchisor and the franchisee. This should be a close relationship. The franchisor should be approachable and willing to spend some time working with the franchisee, especially at the start of the new franchisee. Also the franchisee should have a clear understanding of the franchisor’s expectations and understand how the franchise brand & resources should be used. An example of this is the amount of freedom a franchisee has to make use of intellectual property, something which varies between companies.

Of course all of these things should be established from the outset. As a formal business opportunity a rigorous franchise agreement should be prepared. This should protect the integrity of the business and be fair to both parties. These are the foundation stones of trust that a successful franchise is built on. There should also be a strong procedure and documentation system in place. This ensures that the franchise set up runs smoothly and that all the necessary information is captured and recorded. It also means that the franchisee should be running the business in the way in which the franchisor intended.

It’s been said that franchising is like a marriage and this analogy rings true in many ways. It should be a long term commitment founded on trust, transparency and integrity. As with marriage it takes time for to build upon these qualities and both parties must adapt and learn from each other. And like a marriage the rewards continue to grow as the relationship matures.

However just like a marriage if the relationship becomes stale you can expect the franchisor’s head to be turned by a younger model who flashes a few firmer bits and promises to perform all sorts of exotic acts to make their relationship more exciting and dynamic.

Buying a Franchise in the recession

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Many people have been left wondering what to do after being made redundant, do they look for a similar job, try something different or is there another business opportunity that people are not considering. Being made redundant could be the push you need to start your own business you have always been dreaming of. But this can seem a bit risky in the current financial climate, so could buying into a franchise be the solution?

There are many benefits to buying into a franchise rather than starting your own business. Taking up a franchise agreement traditionally leads to more successful businesses during the first couple of years compared to ones that have been started from scratch. Franchises are tried and tested models that work in the targeted market. The risks are reduced as you are given the help and knowledge needed to make your business a success.

So how do you know what franchise opportunity to take up, is that business right for you? Before you start making any decisions, you need think about whether the business is something you believe in and will want to put time and effort into running. It is always best to buy into a company that you feel strongly about. You should then narrow down the available franchises in your area of business into the amount of investment they require. It seems an obvious piece of advice but before you agree to anything, you need to understand the financial situation completely. You need to know how much you will have to pay for the initial investment and if there are any other out going costs like marketing fees of percentages of profits being taken out. It is advisable to see financial records for the parent company. Are they in a strong financial position themselves? Are they going to go bust in the near future?

Once you have decided on a franchise to invest in, you should visit other franchises that have taken up the same deal as you are looking at. Meeting up with other people in the franchise network will let you find out a lot more about the day to day running of the business rather than the sales patter you will have heard already. It is good to find out if the other franchisees are happy, what type of training and support they received, what type of problems they encounter and if they have any advice for you. It is always good to ask if the figures for things like return on investment match what the franchisor has been telling you.

The reasons people make mistakes and end up losing money is when they are not prepared and do not do the right amount of research. So if you are thinking about buying a franchise, especially during this recession make sure you go in prepared.

To buy a franchise or not buy a franchise, that is the question

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Taking up a franchise opportunity is an extremely big decision, so there are several factors you need to take into account so that you don’t end up losing money and wasting your time.

The first step is to make sure you are looking at a proven franchise business that will offer you a high chance of success. There will be plenty of bad franchises out there trying to lure you in with good deals, but no real potential. Franchises require you to pay a fee to buy into the company and usually a percentage of your sales. But for this money you will get an effective business strategy you can follow and make a success from and secondly you get brand value from advertising the company will already carry out.

Plenty of research should be taken with potential franchisors; find out if there is training available and whether it costs and the quality of it, what support they will provide to you, whether you will need to perform marketing yourself or will they cover that. How much control you have over the business in regards to company policies will differ with each franchise, some businesses will be very protective of their brand and will give you no creative control on how thing are run.

As well as research into the franchisor and their company, you should conduct local business research. See if the proposed franchise will work in your area. There are plenty of local organisations and council departments you can contact to find out how many similar businesses are in the area and how they are performing. These organisations can provide information on how well they area is doing economically as a whole so you can judge whether it is a good market to enter.

Don’t just take the franchisors word for it, go and visit other franchisees for advice and how they feel about the franchise opportunity that you are looking at.

Getting legal advice from someone who has experience with buying franchises is advisable as they can tell you what legal areas you should be covering before making any decisions.

But this advice we have covered in this blog post is just the start of things, so make sure you cover all aspects as at the end of the day, this is your money you are investing.

How to make a franchise work for you

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Many people make the mistake that a franchise is a way to earn money quickly. But just like any business you need to put a lot of time and effort in to make one work. The obvious main advantage you have is you have the backing of a brand and the benefits they bring. This can be design, marketing, advertising, advice and training.

There is an organising body called the British Franchise Association, the makes sure franchisors follow certain guidelines.

So what things do you need to think about before purchasing a franchise, Here is our 8 part guide.

1. Does the franchise opportunity have potential and is it viable. Many new franchisors may come over from other countries to find that their product/service is not needed in the UK. You also need to bear in mind competing business and whether you will be able to compete with them.

2. Is the business legitimate? It seems obvious, but there are a lot of unethical and illegal businesses going around trying to con you into parting with your money. You should do plenty of research before you part with your money.

3. Have other people made a success out of a particular franchise? Talk to them and find out whether they consider it a good idea to invest out and find out how successful they have been.

4. Any legitimate franchisor should show you financial records so you can see how well their franchisees are doing. This will allow you to make further decisions on whether it seems like a good investment. Are the franchisors as successful as they claim? The proof will be in the financial records.

5. There are plenty of franchise exhibitions where you can see lots of potential franchisors and can compare your options.

6. Another obvious one but compare you options. If there are rival franchise opportunities in similar areas, compare them and see which one does better business, offers a better package, who has a larger customer base.

7. Look at the fracnhise financial projections as you will need to make stage payments to the franchisor whether you are doing well or not. So if you are not performing well you will be losing a fair bit of money. Have an accountant check out your figures to help see if they are viable.

8. Don’t worry if you don’t have experience in the business area before starting your franchise. Training will be provided and as long as you have a good business sense they you will be fine.

Have you ever wanted to run your own business?

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property franchiseHow about an estate agents or a property lettings company? Well you could start from scratch, but that would take a lot of research, time and resources. The easier way to start a business is to find a company with franchises for sale. There are many famous ones that people immediately think of such as Mc Donald’s or Subway. But there are also plenty of other franchise opportunities in other business sectors.

How do you choose which company to go with when buying a franchise? Well obviously you would narrow the selection down by the sector you would like to work in. You should do plenty of homework and make sure any business model a franchise company provides is right for you. The benefits of using a franchise system is that you essentially run your own business, but you get the benefit of buying into the brand and getting support and resources from the existing network of people and information.

Experience is not always required when purchasing a franchise as a lot of companies will provide relevant training to give you the knowledge needed to run your business. Obviously having some experience in the field will give you an upper hand, but with plenty of hard work and the drive to succeed, anyone can make it running a franchise business.

When you decide on a franchise opportunity to purchase, you will probably be checked out by the company to ensure they believe you will be able to run the business successfully as you will be running a business under their branding. You will also pay for a franchise fee, which can range wildly between companies. How you get this money is up to each individual person. Some people will have the cash saved up from previous businesses, but if you are starting out you may need to take the money from savings or re-mortgage your house.

Banks generally will not lend you the whole franchise fee amount for your franchise opportunity, but if you pay the franchise fee and have a good business model you maybe able to secure additional funding from banks for things such as working capital.

Once you have bought a franchise, sorted out your business plan and acquired a property to run your business from then you will be set on your path. The main thing to bear in mind is you should take advice from your franchisor, they have had plenty of experience and want to see you be successful.