What should I look out for when thinking about buying in to a franchise? If there is a franchise of the same organisation in my area then would it be wise to try to set up in the same area? How would it work out?
The area in which you can buy and set up a franchise would not be your decision, but the decision of the franchisor, as they would have planned the structure of the network so they each area and business compliments each other rather than competes with each other. Sometimes this mean there is an opportunity exactly where you want one, but other times it may mean that the only location they have is 200 miles away. Therefore, this is something to discuss with the franchisor, as different business types will have different strategies. Some brands work very well when all clustered reasonably close to each other; some need a lot of space.
With regards to general things to consider:
Membership of the bfa:
The bfa accredits franchisors using a stringent set of criteria based on a code of business practice and the European Code of Ethics for Franchising. All members are then listed on the bfa’s website at www.thebfa.org
to allow potential franchisees to check which brands have chosen to be measured by and have passed these checks.
Investment level: Levels of investment range from smaller amounts, that you may already have available, to larger amounts that you may need to take out a bank loan for. There are three major banks that the bfa accredits as specialists in understanding franchising and providing specific teams to work with franchise business loans.
Lifestyle: Franchising is not a hobby. You will need to make sure that you are happy with the commitments needed for this new business. You will also need to consider the support and understanding of those around you such as your family and friends.
Research: All franchise businesses are different, so do your homework. Speak to existing franchisees, make sure you understand all the business operations and ensure that you fully understand the investment costs.
Professional advice: There are a host of professional advisors accredited by the bfa that specialise in franchising, including consultants, accountants, solicitors, banks and even media. They are invaluable in making sure that you’re taking the right steps and don’t miss any vital information.
Visit the bfa’s website at www.thebfa.org
for objective advice and access to numerous educational and advisory resources.
Tom Endean is marketing manager of the British Franchise Association and has developed and managed the communications, brand, press relations, general marketing, events and partnerships with the bfa since July 08.