Franchise Focus Business News…

 You probably know what a franchise is, but do you know what franchise resales are? If you’ve been researching franchises in order to invest in one yourself, you’ve probably come across the term “franchise resale.”

This term refers to an established franchise whose owner has decided to sell his or her franchise. There are many different reasons for why the owner may have decided to sell their franchise, but oftentimes the resale happens after several years of success. They may decide to move onto a different phase in their lives, want to start another business in a differend field or may want to get their return on investment in a big way.

According to a NatWest / bfa survey for 2007, 29% of franchises offer resales. The well established franchises will usually be the ones with more resale opportunities than an up and coming franchise.

Let’s examine the advantages of buying a franchise resale:

1. You will be buying a business with an existing customer base.
2. The brand name has already been established locally.
3. Your franchise can potentially be successful from day one!

However, keep in mind there may be a very steep learning curve, as you will be taking on a business that is already up-and-running, with certain business practices already in place. You will have to really hit the ground running with a franchise resale!

But if you’re really looking for a high performing business that can give you a quick cash flow, franchise resales may be the best option for you. As always, before jumping in head first, check with your solicitor or accountant about the legal and financial ramifications of taking on a resale opportunity.

If you love cars… or simply like serving people… or would welcome the challenge of managing a demanding but lucrative business, then an automotive franchise might be the right choice.

Think of the advantages that an automotive business offers:

• Staying power – cars are not a trend, but a necessity. Unlike food, fashion or entertainment fads, cars never go “out of style.”
• Local, loyal customer base – automotive service can’t be outsourced. People like to deal with a local provider close to home or where they work.
• Free advertising – your happy customers are your best marketers, and their word-of-mouth news about your services will bring in more business.
• Enthusiastic employees – most automotive technicians love cars and their work. They choose to be in an automotive service environment, unlike workers who just show up for a paycheck.
• Lot of options – there is a diverse variety of automotive franchises available to fit different lifestyle preferences and investment levels.

That last item has a lot of appeal. For anyone thinking of buying a franchise, the success of your venture depends heavily on choosing the right business best suited to your financial situation and goals. You have to consider your personal interests, stamina, and commitment levels. For instance, do you want to directly interact with your customers? Do you want to be there full-time? Do you want to manage a workforce, or instead be a hands-on provider without any, or maybe just one or two, employees?

Do you want to be at a fixed location everyday, or on the road? Are you interested in automotive technology and will you keep up with the latest developments in the field? And, as with any franchise, can you adhere to established systems and “go by the book” in running your business?

For anyone eager to start their own repair service station, buying a franchise lets you leap frog the learning curve, with all the business systems and services processes in place from the get-go. Many automotive franchises don’t even require any experience in the field – all the training and tools are provided.

Automotive franchises offer a lot of flexibility as far as financing goes. Some require a substantial investment because you must secure a location, buy equipment, hire technicians etc. But these also offer the potential for the biggest returns. Rather than working with wrenches everyday, you’ll probably be more of a business manager, focused on marketing, team work, suppliers and revenue growth.

There are also many choices for prospective franchisees not ready to make a six-figure commitment.

Most likely a large portion of your investment in these automotive franchises will be the mobile van used to deliver services. You’ll also be more personally involved in the business, directly interacting with your customers. Of course, if you’re successful with your initial efforts, you could wind up owning a fleet of mobile service vans, manage a crew and never pick up a tool! These types of mobile automotive services are in big demand and offer tremendous growth potential because of the convenience they offer customers.

And speaking of customers – they are truly the key to the success of your automotive franchise. It is essential that you and your employees deliver high quality service every time. All services and repairs must be precisely executed for customer satisfaction. And courtesy counts! You want your customers to be happy and to recommend your business to friends, family and co-workers.

An automotive franchise is really a “people” business. And one that can offer longevity in your marketplace, ongoing multiple revenue streams, long-term growth, and big profits. Cars could be the driving factor behind a successful future for entrepreneurs looking to own a franchise business.

Check out Franchise Direct’s directory of Automotive Franchises to find one that could be right for you!

When you consider buying into a franchise system, it’s a great way of ensuring that you are working with proven methods that will ensure success in your business. It helps you to avoid some risk that is associated with starting your business from scratch.

However, in order to buy into a franchise, it often requires a substantial investment. In order to invest in a franchise, you will often have to get financial assistance directly from the franchisor or from a bank that the franchisor may have a relationship with already.

Since franchising is a recognised industry, many of the high street banks have created franchising departments or teams to assist a potential franchisee or franchisors with the investment required to start up a franchise. These banks can be helpful in the process of setting up a franchise, as they will be sources of valuable information about financing a franchise.

Before you even start thinking about investing in a franchise opportunity, ask yourself two very important questions:

1. How much can I afford to invest in a franchise?
2. What return on investment do I need to cover business expenses as well as personal living expenses?

Keep in mind that the total cost of investing in a franchise includes fixed capital and working capital. This will be necessary as you get your business off to a start, and will determine how much you need to borrow in order to invest in the franchise.

There are two types of costs that you need to be aware of with a franchise:

1. Initial costs (that includes the franchise fee so you can trade under the brand, cost of setting up a location and/or getting a vehicle with livery)
2. Ongoing costs (day-to-day business expenses)

This will help determine what kind of financing you need. Generally, banks will lend franchisees up to 70% of the initial costs for a well-established franchise. That means you only need 30% to get started!

Newer franchises that are yet relatively unknown may not command such a loan, and banks may offer to lend a smaller percentage of those initial costs.

Remember, when you go in to discuss your loan, you will need to have a business plan on hand. Don’t be scared if you’re not familiar with how to create one of these! Franchisors often help you with creating a business plan, as they have experience in doing so.

Review Franchise Direct’s Financial Assistance directory for more resources on financing a franchise.

Want to be part of a £3.6 billion industry? Consider a fitness franchise. It is aimed at a continually growing market poised for more expansion. (No pun intended!) Fitness has grown beyond being a craze into a big business that appeals to an increasingly overweight population eager to find ways to shed extra pounds and get in shape.

Fitness franchises, just like people, come in all shapes and sizes, catering to different tastes and customer requirements. For instance, there are fitness centers just for women (energie fitness for women, Ladyzone) and fitness programmes just for kids, too (YogaBugs, FitKid)!

All these options present a down side too. Just like the food and fashion industries, the fitness business breeds a lot of fads, and though a trend may be hot for a time, it can fade away fast like your last holiday’s tan. You don’t want to ride a wave that’s about to crest and crash. Be sure the fitness franchiser has a solid business plan, effective marketing strategies, and long-range view toward expanding its operations, customer base and offerings.

Buying a fitness franchise, as with starting up any business, requires exacting due diligence and research in reviewing the potential market, investment required, expected time-to-break-even, license fees, equipment needed and location. That last factor is especially important. If your fitness business is located in some out-of-the-way site, it won’t attract much of a clientele.

Another important aspect to consider about a fitness franchise, is how much control you have or lack about what you can offer at your facility. For instance, are you allowed to sell other products, like clothing, energy drinks, books and CDs, not supplied by the franchiser? Is there flexibility to incorporate other offerings, like individual coaching or nutritional counseling, that are not part of the franchisor’s master plan? These supplemental revenues could make or break your business, so be sure you fully understand any restrictions in this regard. And be sure you get it in writing, not just a ‘say so’ from the franchisor. If there is no flexibility, do you have the discipline to adhere to the franchisor’s established system and literally “go by the book” – in this case, the Operations Manual.

Next is the money. Just how much can you invest and how long can you sustain operations before making a profit? Investment levels for fitness franchises can range from modest investments to substantial monies for premium brands. This is where your due diligence and research, along with consultation with an accountant, play a critical role. Know your financial limitations, determine the earnings and profit potential, and understand what you have to do to make it successful. If you are starting a fitness franchise from scratch, you may have to devote long hours, seven days a week. Do you have the necessary stamina? On the other hand, if you are buying an existing facility, with established customers and reputation, you may be able to run it more as a turnkey operation.

There is a fitness franchise opportunity for just about every kind of entrepreneur. It’s a business you can be proud of because you are helping people become healthier and live happier. It is an excellent choice for those passionate about good health, and could help you stay in shape too even when busy managing your business. And with the industry’s huge market and profit potential, a fitness franchise could be just the right move for building and improving your financial well-being.

In this blog post you will find the 7 most regular mistakes incurred by prospective franchisees. Scan through the following list and make sure you keep them as a reminder of what you should avoid when preparing to invest in a franchise or business opportunity.

Some of them may sound like common sense but it is always the little things that you forget to take into account that can have huge consequences. So here goes, the 7 most common mistakes made by prospective franchisees …

Counting down…

Number 7:
Not budgeting accordingly for the finance of the franchise business. This includes not having enough working capital and not analysing your financial resources. Be prepared for all business eventualities, by drawing up a business plan. This will help you keep track of your financial needs, outgoings and incomings…

Number 6:
Not understanding the Franchise Agreement. Before signing on the dotted line, you must understand the precise clauses within the franchise agreement and what it means for you and your business. Consider the clauses of the agreement with the aid of a solicitor, to make sure you are getting the best deal for your franchise opportunity…

Number 5:
Not contacting enough franchisees. Contacting existing franchisees of the franchisor is crucial to assessing if the business system is worth investing in. You should contact the franchisor and ask for his/her franchisee details and record all conversations (oral or verbal) with them, to ensure you know this business will work for you…

Number 4:
Not asking why past franchisees have failed. This is a question many potential franchisees fail to ask a franchisor. Knowing why or how a past franchisee of the franchise network failed is central in assessing if you will be a successful franchisee or not. Always ask the franchisor these types of questions so you know exactly where you stand…

Number 3:
Not researching the franchise market prior to investing in a franchise. This is perhaps one of the most damaging mistakes of all the common mistakes made by franchisees. You should research the industry you are investing in thoroughly to make sure you understand the market conditions and potential profitability of your franchise operation…

Number 2:
Not seeking sound legal advice. As mentioned in Number 6, you should seek the legal advice of a specialised franchise solicitor in understanding the terms and clauses of legal documents. If you do not understand the legal issues of the franchise, then you are really looking for trouble! Even if you understand a large majority of the legal documentation, always double check with a solicitor to make sure you will be a franchise success…

Number 1:
Not meeting all Franchise personnel involved within the franchise network. If you want your business to succeed at its optimum level, you will need the on-going support of key personnel working within the franchise network. Establishing good relationships with these people from the very start is vital to your long term success. Arrange an appointment to meet all personnel before signing on the dotted line…