Conceiving a business idea and putting together resources to launch it is hard. Many aspiring entrepreneurs are shying away from venturing into business due to barriers of entry. Fortunately, they can realise their dreams through franchising.
Investing in a franchise gives you a chance to gain experience and run a business under a franchisor. While it is a lucrative investment, the success of the franchise depends on the type and your commitment.
How will you select the right franchise? Bear in mind that any franchise has the potential to succeed or fail. Therefore, do not choose a franchise based on the return on investment.
Here are tips that will get you started:
Is franchising for you?
Remember, a franchise is the business of the franchisor. Therefore, you are following the owner’s business plan and helping them realise their vision. That means there will be annual targets to meet, and you may not be able to change the business model. While you are not an employee, you have to implement their concepts.
What experience and skills do you have?
With the availability of franchising opportunities in all sectors, you can always find a franchise that suits your interests. Therefore, you need to consider your area of expertise and passion.
Remember, you will be investing money into this venture. You will also be dedicating your time to the success of the venture. Therefore, it should be something you enjoy doing. For example, if you have an interest in property management, you can join a real estate franchise.
Apart from passion, there are also some franchises that require some experience in the field. For instance, you cannot join a financial consultancy franchise without knowledge in finance. While you will receive training, some background knowledge is vital.
Alternatively, there are also franchisors that are more concerned with your attitude and general fit with the organisation. If this is the case, be sure to understand the training that will be offered. A franchise worth your consideration will offer extensive training.
You are also a partner, and therefore, you will play an active role in the daily management of the business. You will be setting goals, marketing, and monitoring finances. While you will be stepping out of your comfort zone, it is a great learning experience.
Personal goals and strengths
What personal goals do you have? How will the franchise help you achieve those goals? Every aspiring entrepreneur has dreams and motivations. Those dreams can help you pick the right franchise. Are you after building your net worth or developing your entrepreneurial skills?
You should set attainable and realistic goals when joining a franchise. While you will play an active role in the franchise, you can delegate some of the duties. Focus on your strengths and find someone to handle the tasks that you cannot do.
Which type of franchise is ideal for you?
There are established and emerging franchises. What you will choose depends on whether you are seeking flexibility and opportunity for growth or you want a safe investment.
While established franchises are a safe bet for your capital, joining can be tough. They require a lot of money and expertise in the field. The established franchises already have everything figured out. Therefore, the marketing, business systems, and vision are intact.
Emerging franchises, on the other hand, are in the early stages of their development. That means you can still influence the business models and have a say in the vision of the franchise. It is risky, but it offers flexibility and room for growth. They also have fewer barriers to entry.
Research franchises and market opportunities
With a clear understanding of your interest and expertise, you can begin your search. Narrow the search to a specific sector and business model before choosing a particular franchise. Among the factors that you will consider at this point are the support system, the market, and the investment amount.
You should be conversant with the market and ensure the franchisor will provide adequate support. There are a few routes to finding the right franchise opportunity, you can find franchise businesses for sale online, or you can find a franchise broker to help you.
Joining a franchise is like diving; it can be risky if you do not take time to see what is underneath the water. Therefore, you should take time to align the right franchise with your passion and experience.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.