Ever thought of starting your own business but found the thought daunting. The challenge scary. Well there is an alternative to starting your own business, think about franchising. One way you could start your own business and at the same time enjoy the benefit of running a sucessful business and an experienced team supporting you (In good franchises anyway) is through buying a franchise. The trick is to look for a franchise you feel comfortable with.
**Opportunity knocks **](http://www.newbusiness.co.uk/cgi-bin/showArticle.pl?id=1595)
They are safer start-up options, cover a growing choice of industry sectors and are easier to sell on at a premium. So could franchising open the doors to your business dream?
With a turnover of £9.5 billion in 2002, franchising continues to rise from the clouds of economic uncertainty as a growing business method in the UK. The success rate of 91 per cent profitability reported by franchisees last year (as detailed in the annual UK Franchise survey from the British Franchise Association) provides additional proof of the security of investment in franchising.
Ensuring that the franchise option remains a safer start-up choice is at the hub of the British Franchise Association’s (BFA) work. Established over 25 years ago by a group of leading franchising companies, the BFA is a voluntary, self-regulating body set up to introduce good practice into franchising. Members of the BFA have chosen to be accredited against a strict code of business practice – they must prove that they are an established business, offering a fair and ethical franchise opportunity. The BFA has over 200 accredited franchise brands in membership, representing many different types of franchise businesses and investment levels.
They make no bones about the fact that franchising is not a suitable option for all. “An important part of the research process is making sure that your needs and aspirations suit the methods of franchising – we provide a questionnaire at our seminars that directs key questions at the delegate in order to help them understand in full, the implications of investing in a franchise, and that indicates their suitability to franchising,” begins Brian Smart, director general of the BFA, “But, no business method is fail-safe – a strong brand and proven business success will back you strongly and may provide an instant customer base, but it is up to the individual franchisee to make sure that their franchise works and is profitable.”
This stability in the market has attracted 326,000 people to franchising. Trends in franchisee recruitment are altering with some franchisors becoming less specific about the previous experience a potential franchisee may hold and focussing more on candidates who hold a good degree of business acumen. Franchising is about growing a business by passing on a proven business methodology to franchisees. Franchises are clones: they are managed by individual investors but run by the same operational methods. This is why an investment in a reputable franchise is far more likely to reap rewards than a personal start-up business.
One way to make sure that your investment in a franchise is as safe as possible is to research the franchise market thoroughly and make sure you know all you can about the franchise you are thinking of joining. “Franchisors need to recruit franchisees who believe in the business’s missions and methodologies and can therefore promote the business in their own patch with confidence,” says Smart. “A good franchisor will be very open with an interested franchisee about their working practices, accounts and the views of existing franchisees – the recruitment process is a two-way interview – both parties need to make sure that the franchisee investment is going to be profitable long after the initial payment is made.”
When buying a franchise you have to be certain how long you want it for and of your expansion plans for the business. Knowing this, you can be assured you will be satisfied when selling-on the business
With a historical focus in the hotel and catering and store retailing sectors, franchising has expanded to encompass a wide-ranging market sector and capture ‘white collar’ industries such as recruitment and estate agency.
In an economic climate where redundancy is rife and recruitment in many B2B sectors is static, those with a yearning to take a more personal hold on their career and with the finance to back a standalone venture are increasingly looking to franchising for the answers.
“The diversification of industries within franchising brings with it added market appeal to potential franchisees,” explains Smart. “Business-to-business franchises such as recruitment consultants, are finding that franchising methodology works incredibly efficiently for them in terms of recruiting and retaining the right people to represent their business”.
Franchisee profiles are expanding with the market. Kevin Cox, managing director of Antal International Network Executive Recruitment Specialists says: “Our franchisees are typically at board level, or just below, in experience. They want to do something personal, are attracted by our strong brand and successful business methodology, and also by the international business opportunities Antal has to offer.
“We do not necessarily require prior experience in recruitment but are interested in the unique business knowledge franchisees can bring to Antal.” Cox adds. “Our franchisees are looking for a sound business investment, with a proven business and expect us to provide industry training and support in return for their investment which is not just monetary – we are buying their expertise in order to grow our business.”
The advantage of owning a ‘big brand’ business is that it is undoubtedly easier to grow and easier to sell at the end of the franchisee/franchisor relationship. “Power of brand is a great lever in the sale of a business, and the BFA endorsement of the business is undoubtedly a factor in obtaining franchisee interest,” says Smart.
The franchisee is responsible for selling their business but will work closely with the franchisor to ensure that the right investor is found – a process that can take time. Re-sales in franchising, account for 30 per cent of all franchise sales. They have to be carefully managed by the franchisor who is responsible for his existing, and potential, franchisee. Smart again reinforces the responsibility on the franchisee of making sure that they are buying into a reputable franchise: “When buying a franchise you have to be certain how long you want it for and of your expansion plans for the business. Knowing this, you can be assured you will be satisfied when selling-on the business.”