The motivations for investing in a franchise are many and varied. From the desire to escape the 9 to 5 routine and being your own boss to improving career prospects and lifestyle franchising is seen as a very realistic option for many people who want to start their own business.

But what really is franchising and is it the right option for you?

What is business format franchising?

Business format franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trademark/trade name of the franchisor.

In buying a business format franchise, you are buying the right to run a system that someone else has proved will work. Backed up by initial training, on-going support from the franchisor, and the economies of scale that allows for lower costs, means that franchising remains a popular investment option for many people looking for extra security when starting a business.

The fundamental elements of a business format franchise are: piloting to prove the idea works and can be replicated, initial training to franchisees in the operation of the business, the ownership of the business by the franchisee and the capital investment they will have to make.

An ongoing dialogue between franchisor and franchisee is crucial in contributing to the success of each individual franchise unit and consequently, the franchise network as a whole.

Why franchising?

There are clear advantages to franchising:

  • You do not have to come up with an idea - someone else has had it - and tested it too!
  • Larger, well established franchise operations will often have national advertising campaigns and solid trading name.
  • Good franchisors will offer comprehensive training programmes in all business skills, including sales.
  • Good franchisors can also help secure funding for your investment as well as, for example, discounted bulk-buy supplies for outlets when you are in operation.
  • You will be in business for yourself but not by yourself - although you run your ‘own show' you are part of a much larger organisation and will have the backing of a franchisor support team.

This robust business model, fuelled by dedicated individuals, encompassing many different skills and backgrounds, opens up countless opportunities for people looking for a new start.

Where do you start?

With any life changing decision and significant investment, there will of course be important factors to consider. Anyone thinking of making the jump into the franchise world should carry out thorough due diligence in advance. This should include:

bfa Membership:

Whilst it is not a guarantee of a system, it does ensure that the franchisor has been independently measured against a code of ethical franchising.

Your finances:

Understand right at the beginning what you can afford to invest and what borrowings you are prepared to take. Also pay attention to the returns that the business will generate for you. Do this before you fall in love with something that you cannot afford or that cannot support you or your family.

You:

What are you good at doing?  What do you want to do and what will your family life and personal circumstances prevent you from doing? If you cannot bear the public then consumer facing businesses may not suit. Equally if you take the kids out every weekend a business that requires weekend work is not the best fit.

Research the franchise:

Speak to current franchisees, of your choice. This may be managed and not every franchisee wants to speak to you, but don't just settle for the ones you are given. Also research the franchisor. What is his/her background? How has the business grown? Have they lost any franchisees? Evaluate the support, the value in the costs and the nature of the agreement. They will all the while be assessing you to decide whether they want you.

There is no shortage of choice when it comes to finding an industry that suits your needs and aspiration.  The biggest problem faced by those coming to franchising for the first time is knowing where to start their search and how to go about navigating their way through the maze of information out there.

For more information on franchising exhibitions, the work of the bfa and the members that it represents go to www.thebfa.org