I can honestly say that I wish I knew more about franchise before I took the plunge and left the security of being a partner and manager of the family haulage company in 2000, to set up my own  business, in an industry I knew relatively little about.  I could write what  may be an entertaining book on the ups and downs  lessons I learnt on the somewhat  roller coaster journey, but that is not what this article is set out to do.  What I would  like to share is some essential privileges of taking an established name, product or service and setting up in a town or city of your choice.  The time I spent investigating, researching and testing out the market was considerable, little did I know at the time so much time, expense and overwhelming anxiety could have been avoided.  I hope to offer the reader an unbiased prospective on this, by highlighting some important business decisions you face when going it alone.

The challenges of starting a small business and keeping it going cannot be underestimated and many do fail, even in the very good times. The hurdles can be substantial and the ability to get a business up to speed, making profit and supporting you is not achieved by many.

Franchising has attracted the attention of many over past years and the tough economic climate has highlighted its strengths and shown that there is a more secure way to start your own business. Its formula of a locally owned and run enterprise, driven by a small business owner, with branding, economies of scale and support from the wider network, gives the business a far better chance of success. However, this is only the case if it is done well.

A good franchise will offer you a proven business format with the initial and continuing support that you will need.

Your business will work under the brand established by your franchisor using the business system they have developed and proven in the marketplace. You will pay an initial fee known as the Franchise Agreement fee to set up using the brand and the proven business format, but you would have costs to set up by yourself anyway. With Franchising you will get further ongoing support that will help you to operate and allow you to build the business and, eventually, a capital asset that you can sell or pass on.

The ongoing support is one of the key reasons for the success of franchising. The franchisor has already gone through the pain of finding out what works and what doesn’t – they have invested in the systems and are now willing to teach you how to replicate it. However, don’t think you can pick and choose which parts of the systems you want to use. It is very much all or nothing. However, if you are paying for a proven system, why wouldn’t you follow it?

What are the advantages of franchising?

  • About 90% of all franchisees reported profitability over the last 12 months.
  • The business format is proven.
  • You have the opportunity to build your capital as well as your earnings.
  • It is your business and you are the owner manager, providing you follow the system, you decide what goes.
  • The major banks are very supportive of good franchising models.

What are the disadvantages of franchising?

  • Running any business is hard work, demanding the highest level of personal and family commitment.
  • You make a financial investment, however, no investment is guaranteed, especially when it depends on the efforts of both you and your franchisor as well as the vagaries of the market place.
  • You buy into a proven business system for its benefits but you also take on the responsibility for following it – not doing so may result in you loosing the business.

 

Mark Rozier, Franchisee Development Manager for Concentric Lettings, has a wealth of experience in running businesses, starting out his career working in the family business of transport and then branching out on his own, following his passion for coffee by running a coffee shop, experienced in all aspects of setting up and running a business as well as the front end sales of any enterprise, Mark uses to his advantage all that experience in working with the Franchisees who have joined Concentric as their Franchisee Development Manager and now shares his valuable experience with regular Blogs, articles and social media

 

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