Before deciding that buying a franchise is the right step forward for you, there are certain things you can do to help you know exactly what you’re letting yourself in for.
These include realising what a working day as a franchisee would be like, and will ensure your new venture gets off to the best possible start.
This guide explores the five things you should definitely do before parting with your money.
- Do your research
To get the best idea of the market you’ll be operating in, you’ll need to find out the true facts. Any connections you have within the industry will prove immensely beneficial.
They will be able to tell you which stories about it are accurate, rather than any exaggerations you’ve heard. Question them about the market – is it already saturated, or is there room for a new franchise business?
Also, consider if the specific product or service you will provide is needed in your chosen location. The market may be one that’s unpredictable; too, so you might have to decide on whether this is a risk you’re willing to take.
Additionally, find out if there any factors that could force the market to change soon. You don’t want to discover upon buying a franchise that you’re immediately met with situations you don’t know how to deal with.
Whilst you’ll need to keep up to date with changes regardless of the industry, markets that continuously transform mean you can’t take your eye off the ball even for a second.
The franchisor will likely help you stay ahead of your competitors, but hard work will be required from you too.
- Figure out your finance options
It’s unlikely you’ll have the capital to buy a franchise ready and waiting, so borrowing money may be necessary. To work out how much to borrow, you’ll need to consider more than just the cost of the franchise business – such as premises, payroll and running costs.
You can’t expect a return on investment straightaway, so it’s crucial to prepare for the early stages too. You’ll have to figure out if there’s enough money to survive when you’re working full-time on the franchise business but not yet generating a profit.
The franchisor will be able to help you calculate how much you’ll need to source. They may even introduce you to reputable funding providers and assist you with getting a loan application approved.
If there’s a reason the lender believes you to be a risk, you may find it difficult to borrow money.
Whilst the franchisor can’t do anything about your financial history that may be impacting this, they can assist you with creating a solid business plan that may make you a more appealing lending prospect.
- Be honest with yourself
Running a franchise business may initially excite you, but you’ll need to be completely honest with yourself before purchasing it.
Even though many franchises (like those in the specialist cleaning sector) don’t necessarily require in-depth industry knowledge, consider if you’re passionate enough for the business to grow.
This will require time and effort, and you should know whether you’re truly willing to sacrifice this.
Also, think about whether you see yourself running the franchise for the long term. You’ll need to consider whether it will be enough for you, and what route you want to go down.
Perhaps you envision yourself running multiple franchises, but you have to prove the first one as a success first.
Be honest about your true motives for buying a franchise as well. Are you just doing it because you don’t like being an employee, or because it would suit your lifestyle? Many franchises require hard work, so think about whether you’re willing to put it in.
Also, if you chose franchising because it’s generally less risky than a start-up, it’s worth noting that this might not fit your idea of entrepreneurship.
- Speak to other franchise business owners
Being a franchise owner is different from being a start-up founder, so communicating with others in the same boat will help you truly understand what it’s like.
If you don’t know any, the franchisor can likely introduce you to their franchisees. They’ll offer you an insight into their journey, and be completely honest with you about it. If they found it tough, they won’t want someone else to go into it without their eyes open.
These existing franchisees can also give you key advice that’ll help you avoid making mistakes in your initial days. Take this opportunity to ask questions about anything that’s concerning you.
If you’re buying a franchise business from a reputable provider, then the franchisor is likely to have given honest to your questions, but it’s a good idea to find out things like the extent of work involved, and when you can expect a return on your investment.
It’s also worth probing a little if you hear anything you don’t like the sound of. There may be things they say that are confusing to you – if you don’t question this, you’ll wonder if you misinterpreted what they have said.
You want to have as full a view as possible of what running a franchise will be like.
- Get an outsider’s opinion
Whilst finding out the facts from a franchise business owner is beneficial, you should also seek an outsider’s opinion. Even though they aren’t in the industry, they can give you their thoughts.
This will prove particularly advantageous if they’re a family member or friend that runs a business, as they will be completely open with you and have the relevant experience.
You may have to specifically ask that they be honest with you – they might not want to crush your dreams, but this could cause issues down the line. They know you best, and so can tell you whether they truly believe this is the best path for you.
Close ones can help you figure out whether you have the drive, along with what you’ll need to sacrifice.
When asking friends and family, ensure you speak to someone that can offer a constructive viewpoint, backed up by facts.
Rainbow’s UK franchise opportunities
Once you’ve done these five things, you should be clear on whether buying a franchise is for you.
Whilst there is a lot of hard work involved in running a franchise, the rewards can be considerable. It’s also much easier when you have a reputable franchisor like Rainbow at your side.
We provide ongoing training and support to ensure the continuous success of our franchisees. This covers all areas of the franchise business, including guidance on industry best practices to keep you ahead of the competition.