How Franchisees Are Selected
Despite the UK economy’s continued fragility, which has seen many people facing the spectre of redundancy, the franchise industry has continued to provide the opportunities to those brave enough to take control of their own destiny.
Finding the right franchise, however, can still be an overwhelming, if not confusing, exercise to undertake without the right preparation, approach and perhaps most of all an open mind.With many franchisors actively recruiting in the UK, how do you decide which is right for you? It’s great to have choice and with such a wealth of sectors and types of opportunity available, the choice for today’s franchise investor has never been better.The following guidelines may help:
Set Out Your Initial Criteria
- Can I work within the framework of a franchise?
- What commitment (financial & time) can I make?
- How much money do I need to be earning?
- What are my key skills?
- Am I suited to managing a team of employees?
Start Your Research
Sources for initial information gathering include:
- Franchise publications
- Franchise information websites
- Franchise matchmaking services
- The British Franchise Association (bfa)
- Franchise exhibitions
From these you will start to get an overview of the business models and insights into the role of the franchisee. While researching the franchises identify those that appear to meet your criteria and create your shortlist.
Request Further Information
Contact those franchisors that are of real interest to you. Often this can be accomplished by registering on their website. When you receive the franchise prospectus and marketing materials make note of the quality of the materials and how quickly the franchisor has responded to your request. This will give you a first impression as to their professionalism.
Carry Out Market Research – Local, Regional and National
Having reviewed the materials sent, you will need to do some research on the business concept (how is the brand perceived, whether it is a proven business format franchise) and establish if the products/services offered are right for you and your area. Look around to see if the concept already has competitors operating in your area and, if so, how successful they are. Consider if there is sufficient demand for another brand or if you can improve on it. You should also research the company’s background such as how long it has been a franchisor and how many franchisees it has.
Meet With The Franchisor
It is now time to meet with the brands that are of most interest. Arrange to meet them at their own offices, by doing this you will get to see their operations and meet with more that just the person responsible for franchisee recruitment. It also sends a message to the franchisor that you are willing to make the personal commitment to travel to meet with them and that you are a serious investor. Prepare for the meeting by setting out your agenda and what you want to get out of the meeting. Take with you a list of questions and don’t be afraid to ask them or to make notes. You want to walk away from the meeting with a solid understanding of the business model, the franchise offering and the franchisee's role. The meeting is also the opportunity for both parties to get to know each other and to get a feel as to whether you would like to work together. To this end you will want to create a good first impression by demonstrating that you have researched their business and show a knowledge of their sector competitors.
Speak to Franchisees
This is a crucial part of your research. Having met with the franchisor you will need to speak with as many of their existing franchisees as possible. Obtain an up-to-date list when you meet with the franchisor and arrange a convenient time to contact them. Questions that you should consider asking them include:
- What attracted them to the franchise?
- How long have they been trading?
- How supportive has the franchisor been?
- Has the franchisor fulfilled their obligations?
- Have they achieved their business plan targets?
- How easy was the system to learn?
- What do you enjoy most about the business?
Check Out The Franchise Agreement
The Franchise Agreement is the legal document that essentially sets out the terms and conditions of the franchise. It will detail the obligations of and limitations to both parties and define the terms of the Agreement. While it is unlikely that a franchisor would change the terms of their Agreement, it is important that you do review the legal documents with a lawyer who is affiliated with the bfa. They will be able to ensure that the Agreement is fair and advise on the implications to you should you sign the Agreement.
Other Professional Advisors
As with lawyers, when seeking professional advisors always ensure that they have knowledge of franchising. If possible they should be Affiliated Members of the bfa thus ensuring that they are best placed to give you the best advice and guidance. Thanks to a change in bfa regulations, specialist companies are now permitted to offer a service to help you with your research. Services, such as FranMatch are free to use and help you in your research, providing advice to help you prepare for meetings, and are available to answer all of your questions in a pressure-free non-sales way.
Most people only get the opportunity to invest once so finding the brand that can substantiate their claims and match your aspirations is paramount. Take your time and don’t be afraid to ask questions. Due diligence is a crucial part of the process.
For more information on how we can help you own and operate a franchise, call 01603 703254.