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Do you want to start your own business this year? Are you tired of the daily commute? Do you want to utilise your skills and experience in an industry that excites you? If you've answered yes to these questions, owning a franchise would be ideal for you. Start your 2020 the right way with a brand new career! In this blog, we take a look at the benefits of becoming a franchisee and help you to find a profitable franchise opportunity.
Profit from a Franchise
Franchisees take less financial and personal risks than a new business owner but enjoy a higher chance of turning over a healthy profit. A new franchisee partners with an experienced franchisor so they do not need to invest unnecessary time, energy or capital into getting their business up and running. Each year, 50% of start-up businesses fail due to a mix of incompetence and inexperience. Research from the 2018 bfa NatWest Franchise Survey shows that less than 1% of franchise owners close their business due to failure. Franchising, therefore, is a faster route towards becoming a successful business owner.
The UK franchise industry is thriving at the moment. It has a net worth of £17.2 billion and creates 710,000 jobs annually. 93% of UK franchisees profit from their business, with 60% of them enjoying a turnover of more than £250,000. Around 48,000 franchise units are in operation today, which has increased by a massive 25% since 2011. This growth looks set to continue – the franchise industry is fully Brexit-proof.
Determine Your Budget
What are you prepared to invest as a franchise owner? The cost of owning a franchise varies from as little of £1,000 to £500,000 – this depends on factors such as the nature of the business, the size and location of the business and how profitable the franchise is. It's important to budget for your fee, start-up costs and working capital. Other costs to budget for would be monthly rent, salaries (your own and others) inventory, marketing, software and utilities.
Some franchises will offer financial assistance to new franchisees and if so, more details about the funding will be included in the franchise agreement. However. the option of getting a loan from a third party is also available. If you decide to take out a loan from a financial institution, it's vital to present an excellent business plan. Most banks or other lending companies will not offer a loan without one. Learn more about creating a winning business plan here.
Find an Industry that Suits You
Franchise Direct is a excellent resource for finding a profitable franchise business. Our website enables visitors to search for franchises by industry, location and investment – there is also the option to browse the whole directory. The following four franchise industries have grown from strength to strength since 2015: food, coffee, home care and fitness.
The food sector is the largest in the UK franchise industry and rightly so! Great food is always in demand. However, more and more people are seeking healthier eating habits and choices, which means healthy food franchises are becoming increasingly competitive. Fast food franchises used to reign supreme but smoothie and juice barshave grown by 12.5% over the last few years. This health and wellness trend looks set to continue over the next decade, so opting for a healthy food business is one means of securing a profitable franchise.
Coffee franchises are thriving in Britain – the estimated yearly turnover for coffee is £8 billion so this is an excellent industry to get familiar with. According to the 2018 bfa NatWest Franchise Survey, Costa Coffee began with just 170 units and now there are 2,300 UK Costa Coffee franchises in operation. Anything is possible in an industry with the most popular drink in the world! A staggering 2.25 billion cups of coffee are consumed every day, which may explain why the coffee industry is on track for a £15 billion turnover within the next decade. Franchisees have the option to sell coffee from a cart or even to own a successful coffee chain. There are many different options for succeeding as a coffee franchisee.
Improved life expectancy and a decline in birth rates are two factors that have contributed to an ageing Britain. In fact, 18% of the UK's population are over 65 years of age and 80% of them live in their own home. It makes sense, therefore, that home care franchises are more in demand than ever before. They provide much valued services such as cleaning, personal care and transport. No medical experience is required to join the growing care industry. Not only are there potential financial rewards as a franchisee but it’s also an opportunity to make a positive difference to people’s lives. Starting a rewarding and lucrative career has never been easier.
An astounding 9 million people claim to be members of a fitness club – what a large market to tap into! The benefits of just half an hour of exercise cannot be overstated. Exercise decreases the risk of chronic heart disease, cancer and even obesity. Why not capitalise on the growing need for high-quality gyms? The UK fitness market has responded well to 24-hour gyms, a wide range of exercise classes and even online fitness training sessions. These are just some of the many services you can offer to your local community. Fitness franchises offer many benefits such as recurring monthly direct debit revenue, a fixed franchise fee and extensive support. In addition, no fitness qualifications or experience is required to own a profitable fitness franchise.
Determine Your Work Schedule
If you're raising children or caring for an elderly family member, you're probably not going to seek out a franchise opportunity with a demanding schedule. Luckily, the franchise industry caters to those looking for a healthier work-life balance. You can profit from your business by working from home or even on a part-time basis. Franchise industry sectors such as gardening, pet and home services offer home-based franchises and part-time franchise businesses. Running a profitable franchise and enjoying a balanced lifestyle is really possible!
Choose Your Location Wisely
Where do you want to establish your franchise? Choosing the right location is key for success. If your business is not sited in an accessible and visible location, you will have very little customers! Before you decide on a particular territory, do some research on your customers. Who are they? Where do they go every day? What do they typically spend money on and why? How far are they willing to travel to avail of your product or service? It's also important to know where your competition is and how their location boosts their footfall. Are they in the right place or is there a better position that you can occupy to draw your target market in? Once you have thought about these factors and done the necessary homework, you're one step closer to achieving your business goals.
Ask the Right Questions
Before signing anything, make sure that you understand everything contained in the franchise agreement. Find out what exactly the franchisor is expecting from you and make it clear what you understand and expect from the partnership. Topics that should feature in your discussion include:
- Territory: Are you getting an exclusive territory? Is there room for future expansion?
- Support: What kind of training and support is on offer and how can you avail of it?
- Other franchisees: How long have other franchisees been in operation and what have they learned? If it is possible to meet with one or two franchisees, do that.
- Fee payments: What exactly do you need to pay and how often? Is there a fixed payment date?
- Liability limits: What exactly are you liable for in your franchise? Where have limits been set regarding franchise performance?
Get your 2020 off to the right start with a profitable franchise! Take a look at our exciting range of franchise opportunities right here.