- As a $146 billion industry in Australia, franchises are a great investment option to begin your journey as an entrepreneur.
- What makes a good franchisor? The most important success factor is studying the franchisor, their brand, marketing, training and agreement and how these components work together in the business model.
- You should also question whether going down the franchise path it's the right lifestyle for you as there is a lot of hard work to be done as a franchisee.
- Buying a franchise involves some serious thought... here are five things you need to know to find the right franchise for you.
The franchise business model is thriving in over 60 countries worldwide. In Australia alone, the franchise sector is worth more than $146 billion, and continues to grow in total sales and adding jobs to the market. This, at a time when Australia's economy isn't showing a huge growth according to researchers and economists.
But buying a franchise should involve some serious thought.
My business, Fantastic Services, has over 400 franchisees in Australia, the US and the UK. While growing the company over the past 8 years, we've learned some hard lessons about the skills you need as a franchisee. And what a franchisor should be doing for you in return.
How to find the right franchise
If you’re thinking of buying a franchise, consider these five tips on whether franchising is for you and how to make it a success.
1. Find out what the franchisors are bringing to the table
You're going to expect your franchisor to contribute certain things to the arrangement. Otherwise, why are you paying them that franchise fee?
They'll be bringing their brand, first of all. But you also need market-beating concepts, methods and processes which are going to make it easy for you to succeed when you start trading at your own franchise location.
Which franchise is best?
There are several traits to look out for to ensure you pick the best franchise/franchisor.
Some of the traits that signal a good franchisor are:
- They have a well-established branding and trademarks
- They have unique selling points which have proven to work, especially in several countries
- They have highly effective operational processes
- There is considerable financial planning and accounting support
- You get centralised customer support provision
- You get brand-wide marketing to draw in new customers for the whole network
2. You must know what you’re bringing to the table
Although franchising comes with a lot of benefits, running a franchise isn't the right choice for everyone. As a franchisee, you'll need:
- The same drive and commitment as any new business owner.
- To understand your own experience and preferences. Do you have experience in this industry? In team management? Do you even like fast food?
- A willingness to conform - there will be things such as quality standards and development plans where you need to be willing to read from the same hymn sheet as everyone else in the network.
- The ability to innovate - you should be able to make a success of a good franchise opportunity with hard work and the skills your franchisor trains you in. But this doesn’t mean you have to completely tranquilise any talent for innovation you might possess. The right sort of franchisor should know a good idea when you show it to them.
3. Check what training the franchisors offer
A smart franchisor knows they need to maintaiƒ quality standards across their network. As a franchisee, you will rise and fall together.
It only takes one poorly performing franchisee to give the entire brand a bad reputation. One which may never wash off.
Most franchisors will make sure this is instilled in their franchisees with professional training. For you as a franchisee, this is good news. You should be getting all the classroom instruction, seminars and on-the-job skills training you can handle.
Ask your franchisor what they are going to do for you. As a guideline, our franchisees would expect, at a minimum :
- Initial and ongoing training, so you can keep reinforcing and topping up your knowledge. This also ensures that the whole network understands the value of doing things in the same highly effective, proven way. And that any new technology or processes can be disseminated properly.
- Training which includes group and professional instruction sessions. Ever wondered how the most successful franchisees in your network got to the top of the pile? Meet with them and learn their secrets. Learn from outside professionals in certain fields too.
4. The franchisor should have an eye on future trends
There are several trends which could affect franchise businesses.
The marketplace will get crowded
The modern marketplace can seem crowded. Starting your own business can feel like you're stepping into a busy pond. Automation and other technologies have had many benefits, but they have also brought the end to several career paths.
What this could mean for you: Set against this background, franchises have become a more appealing prospect for many potential business owners. But it also means there may be more competition to become franchisees in certain areas.
The younger generation will have career and debt challenges
The millennial generation (bearing in mind that this label covers 35 years old adults at this point) are the first generation in modern history to be financially worse off than their parents. Student fees have gone through the roof in many countries. The career options which will enable a young person to repay any loans are more limited than they were for their parents' generation too.
What this could mean for you: More and more people are choosing franchise opportunities which could result in your area already being part of someone's territory.
Technologies are making services more convenient and affordable
These days, a lot of people are working longer hours. This means that they value what little time they have to themselves more than ever. This, combined with the spread of new technologies, means that many services are designed to be more convenient than before - usually delivered in-home. At Fantastic Services, for instance, our clients use an on-demand booking app and our providers use another app to fill the work dockets of each franchisee every day.
What this could mean for you: Make sure your prospective franchisor is technologically savvy. Don't get left behind by other businesses which are integrating new technology properly.
5. Get ready to work hard
Like any new business owner, you're going to have to learn to fail upwards. Own an attitude of resilience in the face of a hundred little problems you'll face every day. Don’t let small setback to knock you fully back. Be strong. Work hard. You'll get there.
So, is a franchise business right for me?
Buying a franchise could mean a stunning potential for profit and expansion. It presents the opportunity to be self-funded right from the get-go. And the chance to be completely ethical while you build your working relationships.
What's not to like about a franchise?
But buying a franchise isn't for everyone. You need to be sure that you are choosing the right opportunity for you, for a start. You also want to make sure that your franchisor is going to be giving you some quid pro quo. And that you are confident that they have the sort of business which is going to stand the test of time.
Finally, you need to be prepared to put in some hard work. Because you're going to need to do a whole lot of it. In order to make the most of what a truly successful franchise opportunity has to offer you.
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