How can you know if franchising is right for you?
28 August 2017
The key attribute is to be passionate about the system or the industry that you're buying into. There's no point buying into a fast food franchise if you're not a service-oriented person and you're not interested in food or the products on offer. Of course, you've got to make sure you're qualified for the franchise you're buying into. You can't buy a pharmacy if you're not a pharmacist.
In my experience there are four areas potential franchisees need to consider when considering a purchase:
1. What franchise opportunity will work for you?
You've got to get into an industry that you want to be in. Franchising is like buying any business. It comes with its risks and its rewards, but the biggest thing I find with people buying into a franchise is, is it a business that they can see themselves working in all day, every day for the next five years? It's not like getting a job where you can wake up one morning and decide you don't want to do it anymore.
2. Complete a full franchise analysis
Not all franchise systems are created equal. Different franchises run in distinct ways and provide varying levels of support, especially when it comes to marketing, HR and general operations. Decide on a franchising system that is right for you in terms of the level of training and support provided.
3. Know your costs and feasibility
Sufficient capital is essential for a successful business, as is having the understanding of how to manage it properly. Some people are a perfect fit for franchising, but they don't have enough capital. Make sure you understand what you're buying into, how much that's going to cost and the return on capital. Seek out guidance or advice so you can really know what you have got, and what you will be working with!
Potential franchisees must look at things like lifestyle - if you're a person who needs a lot of flexibility in their work-life balance, some franchises might not be right for you. Something in a shopping centre that's a seven day operation and requires you to be on-site may not be suitable if you've got a young family. However there are some good home-based, or mobile-based franchises that might suit your lifestyle better.
4. Compliance, Systems and operations – are you the right personality?
Are you willing to follow the system? Do you want to be part of a bigger network or are you an entrepreneurial person? Subway and McDonald's are known for their very large systems which have been refined down over the years. There is no room for additional products or extra services to capitalise on your local market. The reason you buy into a franchise is to be part of that group and part of a consistent system – franchisees must follow the rules and operate within their limits.