A franchise can be an extremely quick and effective method of you getting a business started. Using someone else’s knowledge and research can save you many hours of work and heartache.
What is a Franchise?
When you buy a franchise, you are generally taking on a trademark or trading name plus a load of expertise. Generally, there is also a system for operating the business and, frequently, shared advertising and other costs.
Utilising the effort and time which someone has spent in developing that service or product can save you much more than the initial cost of purchasing the franchise. And it can make your business profitable much more quickly.
What sort of businesses are franchised?
Pretty much everything can be franchised. There are the big, well known, brands such as McDonalds, Papa John’s etc. There are also hundreds, if not thousands, of smaller franchise opportunities for you to look at. These include retailers, cleaning companies, restaurants, children’s’ nurseries, beauty treatments, hotels, pet care, gardening, funeral directors, tuition – even accountants (and who would want to become an accountant?) etc.
The big plus is that a properly run and organised franchise operation wants you to succeed and will make more from you if you are successful. They will have a good training programme and provide ongoing support. If you select the right franchise for you, you can be earning a decent amount relatively quickly. They should have ironed out the problems which otherwise you would need to deal with yourself.
A franchise is often a way in which a couple can learn and work together so buying a franchise can be good for relationships.
A few of our clients have taken on franchises as a quick route to learn about an industry and then, after a few years, have “dumped” the franchise and gone on their own. We are not saying this is the best plan, but it can sometimes be advantageous.
Not every franchise is a good deal. We have had some real horror stories. The byword is “research”. Do not just accept the franchisor’s word. Carry out research and look at everything about the business being proposed and the current franchisees. Ask loads of questions.
Always look at the maths. Sounds silly but we have found basic errors in information provided – even with simple addition and subtraction.
The franchisor is trying to sell you something, so you need to beware. Some are a little frugal with the truth and might not tell you everything. Some might just be mistaken.
A few years ago, we were asked to advise someone who had already purchased a franchise. They had been told, in writing, that the product was zero rated for VAT – it wasn’t. When HMRC finally checked, the bill was horrendous – roughly one sixth of their turnover for the previous two years. That franchise is no more.
HOW CAN WE HELP?
We have seen a lot of franchises and understand figures (at least we hope so). We can also bring an objective viewpoint to the subject.
If you are thinking about buying a franchise, give us a call first. We will happily spend some FREE time with you looking at the proposal. Ultimately, it is your decision, but we can give you reassurance (or doubt).
Call us on 01509 816150 or contact us via the contact form below:
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