Choosing the right franchise to purchase is vital as a starting point for success, so let’s take a look at five things you should consider before taking the plunge.
1. Franchise fees
You may see many tempting franchise my business adverts, but make sure you research all the facts before making a commitment. It is important to fully understand the advantages and disadvantages of franchising.
Franchise fees are an important factor to consider. These can range from around £10,000 to £100,000 or more and are a one-time fee for the rights to use the business’s name and any systems and procedures the franchisor has developed. Franchise fees also cover training costs and are payment for opening support.
2. Royalty fees
Whether you are buying directly or through franchise consultants such as Ashtons Franchise, it is important to be aware of ongoing royalty fees. This is the ongoing amount you will pay to a franchisor to use a brand name and benefit from ongoing support. The fees are normally set as a percentage of gross sales.
3. Term length
Franchise terms are normally ten years or under, but this can vary. You need to have a term that is long enough to develop the franchise and form a good relationship with the franchisor.
4. Your lifestyle
Consider the commitment required and factors such as the hours of operation. Make sure the location will work for you and that you have the skill set and interest to make the business a success.
5. Franchisor experience
Look for franchisors who have a successful record and those who have owned their business for at least a couple of years and can demonstrate growth potential when it comes to the products and services being offered. Look at other franchises with the same franchisor and whether they are successful and profitable. A growing and robust network of franchises is often a good indicator of a worthwhile franchise and could mean the franchise you are interested in is a safer proposition.