At this stage, you have researched the pros and cons of a franchise business and are now seriously considering franchising as a way into business.
To be a successful franchisee you would have to be the type of person who can accurately stick to someone else's system, without wanting to make changes. You will be starting your business using someone else's know-how and expertise gained over years of running a mirror image business and on top of it you don't have to worry about developing the system, the franchisor does that. You will however have to manage, promote, market and sell as well as millions of other tasks that have to be done in running small businesses.
In this second step we look at whether franchising is the right route into self-employment for you? We provide questions to help you to self-evaluate your personal circumstances and give you access to our franchise self-test. We also look at the benefits of becoming a franchisee and what a franchisor looks for in a franchisee.
In this article, Tony Bowman, managing director of etyres, a brand leader in the mobile tyre and battery fitting industry and the UK’s first online tyre franchise, tackles one of the most commonly asked questions “Is experience required in franchising?’
While there is not a cut-and-dried answer to this question, in the majority of cases it is fair to say it is not necessary.
Of course, that does not mean anyone can buy a franchise and expect success on a plate. Franchising is not simply a ‘business in a box’, what it provides is a vehicle to help ambitious, hard working people navigate a road to a bright future. You will get out of it what you put in, so it is important to make sure you choose the right business, which suits you down to the ground.
What a good franchisor can offer you if you don't have previous experience
While some Franchisors require specific experience or a level of industry knowledge, most are keen to work with Franchise Owners who have a broad and general skill set.
A good franchise will provide its new owners with a proven business model, extensive training and on-going support to help them grow and develop their own branch, so what you need to bring to the table is the right attitude and aptitude.
A strong commitment to customer service and good communication skills are a priority for many Franchisors, along with the desire to work hard, be proactive and willing to follow the tried-and-tested business model you are investing in.
The practical side of conducting the business, whether it is fitting tyres or laying floors, along with the administrative responsibilities from accounting to marketing, should all be incorporated in the training programme.
Pros and Cons
What is harder to instil in a new Franchise Owner is the ability to keep forging ahead with enthusiasm in the face of inevitable set backs or the relentless determination to identify and secure fresh business opportunities, especially in a tough economic climate.
The systems and processes put in place by the Franchisor should give you a solid foundation to build on, regardless of past experience in the field. For this reason, you should enter the search for the business that is right for you with an open mind. You don’t have to focus on what you know, but instead look at businesses that inspire you.
You should never loose sight of the fact that each Franchise Owner is an ambassador for the brand, so it is important that you are committed to your new business in order to protect the reputation you have bought into.
It is clear that those who share and embrace the brand vision and ethos are the best suited for long-term sustainability, regardless or not of previous experience.
Though franchising is a very appealing business start-up option, it is not, however, for everyone. Before you decide to go down the franchise route and start to consider which franchises are a good fit for you, you first need to identify and be absolutely sure that franchising is right for you.
Below is a list of questions you can ask yourself. Asking these should give you a better understanding as to whether you could be a franchisee. You should also discuss them with your partner or family members as their input could be invaluable.
What physical condition are you in? Are you healthy? Do you suffer from any illnesses that could affect your ability to run your own business?
Franchising is more than a 9-5 job. It is your business so you will need to put in long hours and work weekends if required. If you are not in good health or suffer from an illness that could affect how you perform as a business owner, then franchising may not be for you.
How much of your assets are you willing to risk in a franchise business?
You need to calculate the value of your assets including savings, redundancy pay, car, house etc, and then work out how much you can risk losing. You will need to put a lot of your own capital into the business; can you afford to lose this? Can your family afford to lose it? What will happen if you do lose all your money? This is the worst case scenario but one you need to consider.
How much working capital can you afford to put into the business? What are your current financial commitments i.e. do you have a mortgage, loans, bills etc. If you had a drop in income, which can be common at the start of a business venture, could you afford this?
During the early months of new business cash flow problems may result in income from the business being lower than expected. Are your financial commitments such that you could manage on less income than you have now?
Is your partner or family willing to give you full support? Are they happy to share the risks with you?
There are always problems and difficult periods even in a successful franchise, and it is during these times that you may need a bit more family support than usual. It may be an idea to ask them to list their concerns so you can look at them in more detail.
Is your partner or family aware of the disruption to the family life that starting a new business can bring?
This disruption could range from a few missed meals to the abandonment of an annual holiday and the working of long hours. Ask them for reactions to these possibilities.You should of course have discussed the franchise idea fully with your partner. Many franchisors positively encourage the involvement of spouses or partners in their discussions with franchisees. But you should also ask yourself whether your relationship would stand the strain of the sacrifices, which are inevitably involved in starting your own business. Be sure your partner is not going along with your ideas just to make you happy; make sure he or she is as committed as you are.
How many extra hours above a standard 40 hour week would you be prepared to work as a franchisee?
As you will be aware, running a franchise could involve you in much more than a 9.00am to 5.00pm, weekday job. You may have said that you would be willing to work 20 or more hours extra. Is this realistic - what would you give up in a week to work those extra hours? If you said 2 or 3 hours or more, do you really have the commitment necessary to succeed in a new venture? It is your business and you will be responsible for all your decisions you have to spend all of the hours necessary to make the business work.
What reaction would you have to receiving strict guidelines by the franchisor on how to run your business?
If you value a high degree of autonomy and want to make your own decisions on how to run and develop business, then franchising is possibly not for you. The franchisor is in ultimate control and resentment of this in your part will make the relationship very difficult.
What involvement would you expect from the franchisor in resolving problems encountered in running the franchise?
Although the franchisor should help you with certain types of problems, do not expect assistance with all your minor difficulties. If you expect a large degree of assistance you should choose a franchise very carefully, selecting one which is well established and with well-defined systems for operating the business.
If you see improvements could be made to the environment in which you work, how determined would you be to change them for the better?
In running a franchise business, you will be expected to go by the rules, not change them. A franchisor will object vigorously if you try to 'personalise' the business. If you will be unable to resist making changes, then think again?
What would be your reaction to do tasks, such as serving food or cleaning tables?
You may need to do a lot of the dirty work yourself, particularly in the early days. If you don't want to get involved, make sure that profit margins are sufficiently high to enable you to take on staff.
In your present employment are you used to taking financial decisions?
The franchisor will be concerned if you have had little or no financial experience. Are you convinced that you have the necessary financial skills and knowledge?
Do you think you have the talent and skills that is required to market and sell your service or product?
Similarly, are you capable of selling and marketing your business? Are you sufficiently creative? A franchisor will be reassured if you have had some experience.
How good do you think you are at motivating staff?
If you have had problems with staff in the past and have blamed them, are you sure the problems were with the staff and not in the way that you dealt with them? Again, some franchisors may be concerned if you have had no experience of staff management.
Have you had frequent changes in jobs?
If the answer to this question is yes, are you sure that franchising is something you really want to commit yourself to and that you aren't just looking for yet another change? On the other hand, if you haven't moved jobs a few times in your career, are you sure that you are suited to the different lifestyle, which you may face?
What are your feelings on job security?
Some people like a lot of job security, whilst for others this is not important.Think carefully if you don't like insecurity, are you prepared to give up the comfort of receiving a regular wage.
In this article, Signs Express outlines the benefits of becoming a franchisee.
Franchising enables you to be your own boss but it also offers a whole host of added benefits that are not available to you if you go it alone.
By joining a franchise, you have the reassurance that you are investing in a proven business plan as well as being supported by a team with the expertise to help you make your business a success. We have highlghted below are the benefits of becoming a franchisee.
A robust industry
Franchising is an industry that grows in strength and magnitude every year. A survey conducted on behalf of the British Franchise Association, in association with Natwest, has revealed that 97% of franchised units in the UK reported profitability last year and success rates of franchised businesses have remained very high at 95.4%.
With the industry in such good stead and increasing in population every day, it is the perfect time to become a franchisee and take advantage of this positive trajectory.
Unlike setting up shop on your own, as a franchisee, you are not alone! You are a part of a larger network of businesses in the group, which will benefit you in terms of experience, advice and buying power.
Often, you will also be benefitted by a centralised HQ which has a team of experts who guide the business and will have the experience and know-how to answer any queries that you may have.
An experienced support team at head office act like extra members of staff for your business, skilled in business areas like HR, accounts, IT, technical support and sales and marketing. These are all services you’d have to buy in yourself if you were a stand alone business.
Your franchisor will provide you with a comprehensive training course before you start out and on-going support throughout your time as franchisee.
You will often find that the franchisor, being well-versed in the industry and its requirements, will also help you to choose suitable premises if required, advise on what equipment to invest in and the overall set-up of your business.
Many franchises, like Signs Express, will also offer ongoing training, support to staff training and regular opportunities to network with other franchisees.
Move into a new sector
The beauty of franchising is that you do not have to have previous experience in the sector in order to start your business. Indeed, some franchises, like Signs Express, are management franchises which means that you employ sign makers to carry out the work for you and your role is to manage and grow the business.
Other franchises are based on an owner operator format, where you will receive all the training and know-how you need in that industry to carry out the entire process yourself.
Either way, you have the opportunity to try something completely new and as long as it interests you and the franchise package fulfils your business aims then you’ll be on to a winner.
All well-established, successful franchises will have a tried and tested business model that they will be able to quantify with facts and figures from their years of operation. In other words, you are investing in a system that you know has proven itself many times over.
In addition to the profitability of the entire network, the franchisor will be able to provide you with specific case studies that show the steps that previous/current members of the group have gone through to get to achieve their desired aims.
As part of a larger network, you could also benefit from preferential rates from suppliers. For example, at Signs Express a dedicated procurement manager negotiates material and consumable discounts as well as special rates for the entire network. So even a new franchisee with a relatively small spend can benefit from the discounted rates.
Strong brand presence
Many franchises have a centralised Marketing & Sales team at HQ who are dedicated to generating campaigns that will strengthen the entire brand. This team will also manage the popularity and presence of the brand’s website, meaning that you will gain a high level of visibility without worrying about planning large scale marketing campaigns.
For example, Signs Express generates thousands of sales leads for its franchisees as a direct result of its marketing. It will also save you from investing large sums of money into a website and online activity amongst other marketing tools.
You may also benefit from the brand being a large scale operation, with centres across a number of sites, which can also be beneficial for your larger clients who are looking for a project to be rolled out across a lot of sites. With the aid of the entire group, such projects are highly feasible and can bring a substantial return for the entire franchise.
Overall, becoming a franchisee has numerous benefits that can directly influence the success of your business goals and with the franchising industry growing year-on-year you have more and more chances to join an industry or business that really excites you.
This article was written by Signs Express
When looking to recruit franchisees, franchisors consider the follow characteristics to be important in a franchisee:
The franchisor tends to prefer finding someone who doesn’t necessary have experience in their industry or an entrepreneurial flair. This is due to them wanting to train the franchisee in all aspects of their business and how they do things, instead of inheriting processes and methods picked up elsewhere. If the franchisee does run the business differently from how the franchisor wants it run, then this could lead to conflict and problems.