I love franchising, I think it can be one of the best investments a person can make (see my article here on this). However, there are some people that franchising will never be suitable for.
Checkout the list below to so you can decide whether it is
right for you:
- Take time to understand how the franchise business model works. When you buy a franchise you will pay a significant amount, around £40,000 (not including working capital).
- What are you buying?
- You are buying the replicable business model of the franchise and the brand that it stands for.
- You are buying the support that you need to run your franchise business. This could/should include business support, operational support, operational manuals, HR guidance, technology guidance and systems (may be additional cost for back office system) and if you’re a regulated business, regulatory support.
- Support from the network, peer support (if required)
- What are you not buying?
- You’re not buying guaranteed success. Some franchisees think they are buying guaranteed success, or at least think they don’t have to work as hard as if they’d set up as an independent business. This is not the case. You need to work just as hard and put the time and effort in to build your business.
- What are you buying?
- Culture and values – If you are looking at franchising it is so important to buy a franchise that matches your culture and values. If you are not aligned to them then you will constantly work against them, which will not do you or your business any good.
- Think about the type of person you are – When you buy a franchise you are buying a proven business model. Are you going to think up, what you perceive to be, “better” ways or ideas that the franchise has not recommended you do? If you are then franchising isn’t for you.
- Unless you are buying a very well-known brand such as McDonalds it is quite likely that the franchise brand is not nationally known. For example, in the care sector even the biggest and the best franchises out there are not known locally. If you’ve never had to search for care for a loved one, then you are not likely to have heard of care businesses in your area.
- You will need to do lots of networking whether you buy a franchise business or not. In my experience people think if they buy a franchise they don’t need to network. This is definitely not the case. You need to build relationships with your prospective clients and referral providers, franchise or no franchise.
- There are stages of a franchisee journey. Greg Nathan calls them the 6 stages of a franchisee (resource here) . It is based on a huge amount of data so it’s good evidence for you to look at. Be aware of this before saying yes to franchising.
- It costs around £35,000 a year for a new business to receive the support that a franchise provides. It really is that expensive. If you think franchising is expensive and want to go it alone make sure you budget appropriately for marketing and business support.
If you are thinking about buying a care franchise and want to discuss your options in more detail, then we are happy to provide a no obligation support call to see if franchising is right for you. Contact us here