Small Business News. Starting a business is not easy, there are many pitfalls when it comes to going it alone, but Franchise Opportunities have made the pitfalls less and have allowed thousands of people in the UK to become self-employed and become successful. Adrian Goodsell, Franchise Exhibition Manager at Venture Marketing Group, organisers of The British Franchise Exhibition in Manchester (www.franchiseinfo.co.uk), explains why franchising is increasingly seen as an attractive option, what you should look for in a franchise and how to obtain funding.
'Franchises Help Business Owners Become Successful'
What are the benefits of franchising against a regular start-up?
Owning a franchise business under an established brand offers the experience, credibility, support network and structure of a proven business. This helps to overcome the uncertainties and difficulties commonly faced at the start-up stage.
It isn’t difficult to see why franchising is growing worldwide; new businesses based on franchise concepts are far more likely to succeed than other new business ventures. In addition, banks are generally more willing to lend because of the franchise’s track record and the fact that franchises have proved to be more likely to be successful in the longer term.
The facts make it clear. According to the latest NatWest and British Franchise Association survey, annual industry turnover is £12.4 billion, which has grown from just over £5 billion 20 years ago. There are now 897 franchisor brands operating in the UK, employing over half a million people (521,000), with 90 per cent of units proving profitable.
A franchise business has a proven business model, which is transferable and can be taught. This is then supported by the franchisor and training provided. As a franchisee you also own the business and so can eventually realise your capital investment by selling the business.
What do I need to look for in a franchise?
Having decided that franchising is an interesting prospect, the next key step is to find the right business. While websites such as www.thebfa.org and www.franchiseinfo.co.uk can provide many options and sources of information, the opportunity to meet franchisors and existing franchisees face-to-face at events such as franchise exhibitions is also vital to gain a clear insight into a business.
Once you have started to identify a list of potential franchise businesses, you have to work out how to make the right choice for you. First you must do your homework to see if you are right for the particular business and the business is right for you. You need to be aware of all that is involved and how you can identify which businesses may best suit your skills and interests.
At this early stage, you need to decide what minimum and maximum investment level you are considering and make sure it’s a realistic one. It will help to discuss early on with the franchisor what level of financial commitment is required and what you can expect in return from this. The initial investment and financial resource can be a decisive factor. They start at a low level, sums that you may already have available, and go up to higher amounts for which you may need to take out a bank loan. Make sure you understand what costs are involved, both upfront and on-going. One of the advantages of choosing to set up as a part of a franchised business is that you are more likely to be able to borrow for a franchise in the first place; banks recognise the higher likelihood of success and are therefore more supportive.
Does the development and the operation of the business suit your lifestyle?
It is likely to be very demanding, especially in the early years. Make sure that you are happy with the commitment needed for your new business. You should also speak to existing franchise owners through the franchisor or bfa accredited exhibitions to find out about the day-to-day realities of running a franchise: ask for an extensive list of franchisees to choose from so that you can speak to both those that are successful and the less successful, to obtain a more rounded view of what is involved.
If you meet with a prospective franchisor at an exhibition, you should follow up by meeting existing franchisees to get a real feel for daily life working with the business. Then, before committing to a purchase, you should consult with specialist lawyers and accountants about the terms of business.
What are the next steps?
A visit to a bfa accredited franchise exhibition such as The British Franchise Exhibition in Manchester on 8 and 9 June is a good way to progress your research. It allows you to meet owners and franchisees from a wide choice of businesses gathered together under one roof, across sectors ranging across property, home care, technology, food, retail and many more. The exhibitors in Manchester include Local People, United Carpets, Platinum Property Partners, Nomasvello, McDonald’s, Riverford Organic Vegetables, Bluebird Care and Plug and Play Design.
There are also experts on hand to offer professional advice and answer questions and seminars covering all aspects of franchising. An extensive free conference programme includes practical advice seminars by the bfa and a panel of experts will cover all aspects of franchising including how to find funding, where to go for legal advice and what a franchisor looks for in a franchisee.
To register for The British Franchise Exhibition, call +44 (0)844 257 8668 or visit www.franchiseinfo.co.uk. Callers can purchase tickets by credit card for £8 each or £7 each for two or more. Admission on the door is £10. Visitors can, however, gain FREE admission by using the promotional code EDTOWN when they register on the website.
The British Franchise Exhibition is open from 10am each day, closing at 5pm on Friday 8 June and 4pm on Saturday 9 June 2012. Visit www.franchiseinfo.co.uk for more information