Franchise Focus Business News…

Choosing to invest in a franchise business is one of the biggest steps you will take in your lifetime. Just as you know what you like when looking for a romantic partner, or what facilities you want when buying a new home it’s vital to know what ingredients to look for in the right franchise for you.

Mamma Mia!

The brand: It is more reassuring to commit to a brand that is widely known and which reputation is not in the process of being built. It is a bit like when you order a Margherita. When your plate comes, no surprises, you know what to expect on your pizza. But this does not mean that the least famous pizzas on the menu are not appetizing. The same goes for lesser-known franchises: they might be full of potential. For the latter, what matters is that the brand and the logo have to be catching and attractive and have to reflect the product or service of a franchise.

The concept: A concept which has proved itself may be less risky – when you invest money in it – than a new concept. However, some new concepts are worth franchising and selling worldwide. Let’s take the example of the Hawaiian pizza. According to the Pizza Marketing Quaterly, it’s the favourite pizza of the Australian. Pineapples on a pizza! This is something that would have shocked the most famous Italian pizza chefs of the beginning of the 20^th century. The concept has to be of good quality and has to be adapted to the needs of the market. You cannot put ham on pizzas sold in Muslim countries and you should always have a vegetarian pizza on your menu.

The type of industry: It is hard to choose a particular industry. Catering is an industry that has always worked well as far as franchising is concerned, but this doesn’t mean that all the franchised restaurants are successful. Most importantly, you have to choose an industry that you are interested in. You wouldn’t put anchovies on your pizza if you don’t like them!

The know-how: Generally passed on to the franchisee through training and the franchise manual. The know-how can make a difference between two franchises of the same industry. A pizzeria with a wooden oven will have a better reputation than a pizzeria with a regular oven. It is therefore essential this expert knowledge is passed down to the franchisee.

Experience: All of us can’t make good pizza dough, especially not without practice and experience. This is however not a handicap for a franchise to be new on the market. In this case, the experience of the franchisor in his field matters.

The size: Pizzas aren’t judged by their size, but by their taste. Little pizza does not mean bad pizza. The same goes for franchises: a small franchise does not necessarily mean it is a bad franchise.  It’s more important to focus on the development plans of a franchisor. It is better to invest in a small franchise with a big growth potential rather than in a non-viable big franchise.

The geographical location: A pizzeria will not be very profitable if it is surrounded by pizzerias that have been there longer and sell better pizza. The same goes for your franchise unit: you will not be able to develop it if you have too many competitors in your area. Make sure that the location of your franchise unit is adapted to the product or the service that you sell. Try to sell pizzas to a Massai tribe, and you might not be very successful.

Communication and transparency: Before buying a pizza, you want to know what its ingredients are. The same goes for franchises: you should want to know a maximum about the franchise you are interested in before buying a unit. It should not be a problem to get information from a good franchise.

Franchisees: The cheese on the pizza: committed franchisees! The biggest franchises would not be as famous without the hard work of its franchisees. All good franchises should have in their team hard-working committed franchisees ready to get their hands dirty.

Ingredients of the Franchise Direct special: tomato sauce, cheese, mushrooms, olives, artichokes, chorizo, ham, corn and seasoning oil.

Sometimes it’s good to do some digging around in the past. Meeting your boyfriend’s ex-wife at a party would be hailed foolish by many, but if you’re seriously considering starting your own franchise business one of the most valuable tools at your disposal is current franchisees.

Most franchisors will introduce you to some of their successful franchisees, or invite you on a tour of their premises, where you will get to ask question and see how things are done, although this might be ‘censored’.

We’ve put together some tips to learn the nitty gritty about the franchise business that may change your life.

• If you are invited on a tour with a current franchisee and the current franchisor comes along, try to come back later so the franchisee won’t feel under pressure to present a perfect image of the business.
• Be aware that the frachisors may give bonuses to current franchisees that help get newbies on board, so try to figure out if they are being totally truthful.
• The more franchisees you talk to, the better the information you will get.
• If the franchisor supplies you with a small pool of contact details, get out the phone book and ring around other franchisees. Use Google to research what news and events the franchise has been involved in.
• Try to get in touch with a wide variety of franchisees, from the most successful, to the struggling. This way you can assess whether the business is flourishing or failing because of the business model or the franchisee themselves. Talk to the oldest franchises and the newest ones. The guy who is just scraping by six years in will be as valuable to talk to as the star new kid in town who has already broke his first million.
• Use your gut, and try to get a feeling for the motivations of the franchisees you talk to.

You should have your own questions for franchisees depending on which industry you’re investigating, but here is a checklist of must-ask things to quiz franchisees on:

It might be useful to rate these questions on a scale of one to ten:

1. Are you happy with how the business is working out? If not, what issues are affecting you?
2. How is your experience different from what you expected?
3. Have you made your initial investment back yet? Did it take longer than you thought?
4. How many hours a week do you work? Has this impacted on your personal life?
5. Was the training what you expected it to be? Was it intensive or tailored to your own needs and abilities?
6. Does the franchisor put any restrictions on products/services you can supply? How has this affected you?
7. How would you rate marketing and advertising? Does the franchisor do all you expected or they promised?
8. What support do you receive now? When problems have arisen how responsive was the franchisor?
9. What did it cost you to build and start the franchise? Were there any hidden costs?
10. What are the best and worst moments since you started?

If the average score of the franchise interviews is coming in at more than five out of ten, it could be an indication that this could be the right franchise for you!!

Ever wondered what happens when you discover a franchise opportunity on our site, get all tingely with excitement and submit an enquiry form?

You have already taken the first step on the path to being your own boss so congratulations!

Your Lead

We let the franchisor know you’re interested straight away, so they can take a look at your details, and see if you’re a suitable candidate. At this early stage, the information you provide about the amount you have to invest and the areas you are interested are important to let the franchisor know a little bit about you.

Contact You

When the franchisor gets your details, their next step will be to contact you, by the channels which you indicated. This could be a quick phone call or an email and will usually provide you with extra information about the opportunity. This initial contact is vital to ensure the franchisee, franchisor and the business itself suits all involved.

Face to Face

If both parties are still interested, the next step will usually be to meet in flesh and blood. A meeting may be arranged for a public location; you might be invited along to a discovery day or you may be invited to take a peek around head offices or another franchisees premises. Any additional information you receive about the company at this stages may be subject to a confidentiality agreement.

Evaluation and Research

At this stage, it’s import that you research the business model, the market and previous franchisees. The franchisor will assess you to make sure you’re the right person to take on as a franchisee, and offer you the opportunity to meet some franchisees.

The Agreeement

When both parties are confident about going ahead with the franchise, you will be provided with the franchise agreement. This is the contract which will set out the terms and conditions of your new business, and it will outline the rights and responsibilities of both parties. This can often be a very long document, and you will be given time to seek legal advice. You may have to pay a deposit to the franchisor at this stage, which may be non-refundable.

Financing

If you require lending assistance, either through the franchisor or a high street bank, you will have to arrange this finance, usually before the franchise agreement is signed. This may involve creating a business plan, and one or more meetings with a bank manager. Franchisors can usually provide support and documentation, or will attend any bank meetings with you. If you are using your savings, you may need to give your bank or building society notice that you intend to withdraw the funds.

Payment and Signature

Both you and the franchisor will sign the franchise agreement, and at this stage you will usually be expected to pay the the full licence fee (or a portion of it).

Congratulations, you are now officially a franchise business owner!

Training

The training provided can vary from franchise to franchise. It can last anywhere between a few days and a few months.

• Hands-on training where you are invited to an existing franchise location to learn the ropes.
• Residential training, where you will receive focused and concentrated training.
• Head office training, where you will attend head office to take part in a training programme.
• Trainer comes to you, where the franchisor will send a trainer to you for one-on-one training.
• A combination of the above, which may include classroom or hands-on learning.

The Launch

The franchisor will usually provide significant support to help you launch your business and get trading. This help may include advice on marketing and event-planning. Members from head office will usually attend, as well as local people, small business owners and even the media.

Your Own Boss

Once you’ve launched, you are officially your own boss, you’ve finally made it! As you are still learning at this early stage, the franchise team will be on hand to provide advice when needed, whilst giving you the space and freedom to get to work. You will usually be provided with guidelines and operations manuals, and you may be contractually obliged to use these.

Year One

After twelve months, the hardest graft has been done, but you’re not finished yet. You will be operating without the need for constant support from your franchisor, but they will be available to help you grow and expand your business. Many franchisees will have made their initial investment back by this stage. Many franchisees may be obliged to pay franchise fees and follow the outlined systems.

By now, you will be working the hours that suit you, and you as a successful franchisee!

Take a look at our success stories. It could be you this time next year!

1. Choose one employee to start planning for severe weather disruptions now. All final details can be run past the boss when the time comes but get a plan in place.

When the snow hits, minimise this persons other duties so they can monitor road closures,public transport and safety warnings (instead of your whole staff checking the warnings twice an hour).

2. Survey your employees finding out:

• How do they get to work?
• How long does it take?
• Are there any alternatives? i.e. Public transport?
• Was it disrupted last year?
• Have they a laptop?
• Have they a (reasonably fast) Internet connection?
• Have they a land line telephone?
• If schools close will they be able to work with children in the house?
• Have they access to the office server?
• Collect up-to-date mobile and home telephone numbers.

3. Working from Home - With your employee information gathered, plan what will and what will not be expected of employees.

Use chat and video software to hold meetings and keep conversation alive. Use cloud computing and memory sticks/portable hard drives to back up all data. Plan work that can be done without an Internet connection.

4. Assess the legal situation. What’s reasonable to expect your employees to do? Will working from home count as attending work? What is the entitlement to time off, unpaid and paid leave? Will you force employees to take holidays? Must you provide flexible working hours (i.e. to allow employees to leave earlier to avoid traffic congestion?)

5. Keep everyone informed. Send text alerts to your employees with any logistical updates. If most people are working from home keep touch base once or twice a day at least.

6. If most of your office is able to make it in, make sure walkways are kept clear of ice and snow, and check NOW that all pipes are insulated and the office is waterproof.

We know the man down the road who would get up every morning, shoes polished and suit ironed purposefully walking off to the park or the local cafe, trying to hide the shame of redundancy from wives, children and neighbour. It doesn’t have to be like this.

According to a report undertaken by de Poel on the Labour Market Outlook in the first quarter of this year:

38% of employers intend to make redundancies, breaking down as 52% of public sector and 30% of private sector companies intending to make the chop.

36% of NHS employers could be writing out redundancy cheques by the end of the year.

The plans for redundancy are highest in the Midlands, and 61% of all redundancies will be compulsory.

The average redundancy pay is just over £13,000, With public sector employees pulling up to £30,000, and private sector leaving with a more modest £7,800.

However, as a result of the coalition government’s cut in corporation tax rates some industries are set to grow.

The financial, insurance and real estate areas are set to benefit the most from the tax cuts, but wholesale and retail industries will also feel the boost.

Franchising after a redundancy

Redundancy is not the end, it can be the beginning. Of a new career, a new burst of life, or even a new family empire.

If you don’t want to rely on benefits or endless job searches after being made redundant, consider becoming a franchisee.

If you’re facing the concrete-like reality of redundancy, consider the personal assets you’ll be walking out with. Experience and skills put to practical use in the workplace.

You have a few options, if you liked your old job, why not use the skills you’ve honed in your time there to start a new venture? (Obviously not exactly the same, if you were made redundant there was obviously an issue with the business model), but how about a tested and tried franchise business?

Redundancy also offers you the opportunity to carve your name into the history books, with your own dream job as your own boss. If the thoughts of running your own magazine, or opening a creche get your heart beating with excitement, you can invest your redundancy package into making your dream a bright reality.

Franchises offer a proven business model, training and support. The huge choice of franchises opportunities can be daunting, but try and asses what you want.

We’ve handpicked a few suggestions if you are thinking about planning for like after redundancy.

Retail - Snak Appeal

Minimum Investment: £5,127

Description: Local Franchise business opportunity in the charity sector providing a service to business & leisure premises with our quality sweets & snacks. Ideal for a single person or a couple.

Financial- The Financial Management Centre

Minimum Investment: £6,500

Description: As a franchisee of Financial Management Centre, you can start up and operate your own financial management consultancy business in the SME industry with the support of an experienced franchise team.

Real Estate: Open House Estate and Letting Agents

Minimum Investment: £5,995

Description: Start your own Estate Agency business with low start up costs and excellent potential for a great return on your investment.