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Advice for budding business franchisees
With any life-changing decision and significant investment there will, of course, be important factors to consider and anyone thinking of starting a franchise should carry out thorough due diligence in advance.
With any life-changing decision and significant investment there will, of course, be important factors to consider and anyone thinking of starting a franchise should carry out thorough due diligence in advance.This should include:
BFA membership
Of the franchisors operating in the UK, approximately 350 are members of the bfa. While it is not a guarantee of a system, it does ensure that the franchisor has been independently measured against a code of ethical franchising.
Your finances
Understand right at the beginning what you can afford to invest and what borrowings you are prepared to take. Also pay attention to the returns that the business will generate for you.
You
What are you good at doing? What do you want to do and what will your family life and personal circumstances prevent you from doing? If you cannot bear the public, then consumer-facing businesses may not suit. Equally, if you take the kids out every weekend, a business that requires weekend work is not the best fit.
Research the market
Speak to trade associations for the operational business. Use the internet to research the business that you will be involved in. Those entering franchising are sometimes blinded by owning their own business; they need to understand what that business actually does and the market in which it operates.
Research the franchise
Speak to current franchisees of your choice. Look for franchisees with a background like yours or ones at differing stages of development in different areas.
Also research the franchisor. What is his/her background? How has the business grown? Have they lost any franchisees? Evaluate the support, the value in the costs and the nature of the agreement. They will all the while be assessing you to decide whether they want you.
Visit an exhibition
Visit the National Franchise Exhibition, on October 3 and 4, 2008 at the NEC in Birmingham, which hosts more than 200 franchisors. You can meet franchisors, and see many different competing businesses side by side.
There is no shortage of choice when it comes to finding an industry that suits your needs and aspiration. The biggest problem faced is knowing where to start your search and how to go about navigating all the information out there.
The BFA website is a useful resource for researching franchise opportunities.
As well as featuring a full list of accredited franchisors, there is also an in-depth listing of franchisee case studies, general franchising information and dates of upcoming franchisee seminars to give you a detailed introduction to franchising.
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