Franchising offers you the chance to start your own business, but using an established successful format. What should you do, though, before you take the plunge? Cathryn Hayes, head of HSBC’s Franchise Unit, gives some advice.
Running your own business may be a long cherished dream, but it can be a frightening step to take. However, there is no doubt that going into business as a franchisee of a well established, proven business format franchise will give you the best possible start.
Of course, there is a lot of work to do before you will be ready to part with any money, you will need to research your chosen franchise, making sure that it is the right one for you and that you are fully aware of what is involved.
So how do you check out a franchise? Here are my Top Ten Tips:
1. Find out what franchises are available
There are franchise exhibitions, directories
, magazines, all devoted to franchising and starting a business. Start by contacting the British Franchise Association (01865 379892 or www.thebfa.org
2. Take as much advice as possible
Advice on choosing a franchise is available from the British Franchise Association, banks, lawyers, accountants and from various franchise publications.
3. Examine your strengths and weaknesses
What skills and weaknesses do you have? Does the franchisor provide training and back-up to help you overcome any weaknesses?
4. Check the franchise is right for you
Is the business one you can see yourself running?
5. Talk to existing franchisees
What problems did they have, how successful are they?
6. Investigate the franchisor
It is important that the franchisor has the financial resources to support a franchise network.
7. Examine the market place
Is there a market for your chosen franchise’s goods/services? Is the franchise operating in a market subject to fashion?
8. Take care with new franchises
Has the franchise been piloted, how long has the franchisor been in business.
9. Check the legal agreement
Have the franchise agreement vetted by a franchise specialist solicitor.
10. Take your time
Taking up a franchise is likely to be one of the most important decisions in your life and the life of your family. However enthusiastic you are, don’t be rushed, and do your homework.
Remember all business involves risk, including franchising. However, there is no doubt that going into business as a franchisee of a well established, proven business format franchise will give you the best possible start.
This article is written by Cathryn Hayes, Head of HSBC’s dedicated Franchise Unit. The unit has been going for over 25 years and continues to work closely with the British Franchise Association (bfa) and its members in the development of ethical franchising. HSBC’s Starting a Franchise guide has more information on the planning and research required to start a franchise. Free copies are available to download from www.hsbc.co.uk/franchise or contact HSBC’s franchise team at firstname.lastname@example.org