What is franchising? And is it right for you?
Two heads are better than one… Four heads are better than two… Eight heads are… you get the idea, but what is franchising?
When it comes to franchising, this concept is put into practice.
Franchising? What’s that?
Put simply, a franchise is a business opportunity that allows the franchisee (you) to start a business by using the ideas, expertise and processes of an already-established company.
In some instances, this means paying a fee to use the company’s – or franchisor’s – name and branding, as well as their tried-and-tested business model.
In other cases, it means the right to resell a franchisor’s product.
Investing in a franchise is less daunting than going into business on your own.
With a franchise, you don’t need to build things up from scratch – the initial work has already been done for you.
These brands are already established, meaning the franchisee can cross ‘marketing’, ‘advertising’ and ‘find burger recipes/coffee blends’ off their to-do list.
The franchise model relies on a good brand and, with it, consistency.
Do Your Research
If being part of a franchise appeals to you, before you sign a franchise agreement, make sure you do your due diligence.
It’s not a commitment to rush into or take lightly.
Talk to people who have been there and done it – what’s their advice? Ask lots of questions.
You want to be sure that the company you are getting into bed with will treat you well, train you, work with you, and offer help and support every step of the way.
You’ll likely need to go through an interview process with the franchisor, so be sure that you are an attractive business proposition for them, just as they are to you.
Questions you may want to ask, include:
- How much is the initial fee?
- What are the ongoing fees?
- What’s your company’s culture?
- How many other franchisees do you have? Have they been successful?
- How much money am I likely to make?
- What support do you provide beyond the initial training?
- What do you expect from me?
- What is a typical day like for a franchisee?
- Do you have contact details of current franchisees so I can ask them about their experience?
Although people often typically think of fast-food chains when you say the word ‘franchise’, burgers, pizza and sandwiches are just the tip of the iceberg (lettuce).
Many, many sectors now adopt the franchise model.
Everything from hotels to car-rental companies, cleaning services to property.
Property franchising has become a popular way to get, stay and thrive on the property ladder.
In fact, Platinum Property Partners (PPP) stated that 2018 was ‘the year of the property investment franchise’.
Investing in property via a franchise takes much of the financial – and emotional – risk out of the experience.