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Franchising offers many advantages for people who want to start their own business. As with any new business venture, an investment in both finance and time is essential in making a franchise work.
A franchise is a tried and tested business formula which offers training, support and advice in all areas of the business to ensure its franchise owners have the best possible opportunity for success. In terms of the investment, a franchise owner who has an interest in the business model, enthusiasm and has completed research on their chosen industry has a much higher chance of success than a stand alone business. There are no guarantees in business but a franchise is a much safer investment.
Q. DO I NEED PREVIOUS EXPERIENCE IN BUSINESS TO BUY A FRANCHISE?
Most franchises do not require previous experience in the sector in which they operate, although if it is very specialised clearly they may. One of the advantages of franchising is being able to get into a sector you know nothing about as the franchisor will train you in the sector as well as their own systems and operating procedures. It can often be easier to train someone who knows little about the sector in which franchise operate, as they have no preconceived ideas of the business.
Q. WHAT PERSONAL QUALITIES DO MOST FRANCHISORS LOOK FOR IN PROSPECTIVE FRANCHISEES?
It might sound obvious but buying a franchise does not necessarily guarantee that you will be successful in business. It does however offer you a proven model to follow together with guidance from the franchisor and often, successful franchise owners within the network. While this type of help and advice is invaluable when starting a business it cannot make up for shortcomings in the franchise owner themself. Before considering whether an applicant will be suitable as a potential franchise owner the franchisor will normally look to satisfy themselves that they possess the following qualities;
•Good communication skills. The ability to put a potential client at ease and ultimately close a sale.
•The necessary drive and determination to succeed. Not everyone is cut out to run their own business. It’s not always going to be plain sailing, staying motivated when times are tough can be hard is important.
•Adequate funding. Does the candidate possess adequate funds to cover both start up costs and expenses while training?
Q. HOW WILL THE FRANCHISOR HELP ME TO ESTABLISH THE BRAND IN MY TERRITORY ?
It is in the interests of the franchisor to promote and grow its brand continously, and the opening of a new franchise territory is a perfect opportunity. A lot of franchisors have a budget in their marketing spend set aside specifically to help a new franchise owner to get up and running. Some franchisors actively feed leads to their whole network (including a new territory) from their national sales and support team who are funded from the management and marketing fees levied from the franchise network. Most franchising sales and marketing material is already available in generic format and it takes no time at all to adapt it for use in a new territory or franchise.
Buying a franchise is an investment in a proven business formula with an established brand, an identifiable marketplace and a track record of success. This means that unlike an investment in, say, the stock market, where the safety of your money or otherwise is entirely out of your control, the success of your franchise and future growth of your business is in your own hands. If you are prepared to work hard, research carefully and choose a franchise that is well established and provides the ongoing support you need to grow, then your investment in a franchise will be a sound one.
This can vary significantly between franchise types, and for some business there may be legal requirements to full fill. The franchisors may also run a financial check to ensure that your status is good – it is vital when you are starting a new business that you have sufficient working capital.
The initial franchise fee is usually designed to cover the costs of recruitment and training so the primary risk is borne by the franchisor is largely reputational- will you and your performance live up to and help promote the brand? Consequently more background checking is to assess your stability and the level of support for your business, not just financially, but from your family.
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