Following her feature ‘Is Franchising right for you', Sharon Bassett, from Enjoy-a-Ball (001) Ltd, tells Remote Employment that there are over 34,000 people operating franchises that allow you to buy into a proven idea yet run your own business, many of them as a home based franchise.
Sharon Bassett is a franchisee and a bit of an expert when it comes to choosing the right opportunity. She says the best advice is never to be afraid to ask too many questions and in this useful guide Sharon offers an outline on the kind of questions you might want to be asking.
A bit of friendly advice
When looking for a franchise opportunity, my advice is not to be satisfied until you have all the information you need. Here are some questions to pose to the franchisor:
What are the start-up costs and what do I get in return for this investment?
What are the ongoing franchise fees (and is it clear if and how these will be renegotiated in the future)?
Often this is detailed in the contract but, in some cases, it can be left rather vague. Fees can be fixed regardless of the size of your business, or variable (generally once growth occurs), and be aware of any other ongoing costs e.g. for equipment, marketing, office supplies, training.
Does the franchise have a defined geographical area?
A franchisor can ask you to define your own area as a basis for starting negotiations but the ‘deal’ will very much depend on demographics e.g. rural franchises may have larger areas to work within as populations are smaller than for city businesses.
Can I visit other franchisees?
If you’re investing in a new franchise then you must see other franchisees in action. Ask them the same questions that you’ve asked the franchisor, any discrepancy will give you your next firm line of enquiry. The franchisor is likely to showcase a successful business, so enquire about the franchisee turnover, average growth rates, ongoing training, reporting systems and quality assurance measures.
If you’re buying an existing franchise, full accounts and operational details should be available. There will, however, be ‘good will’ factored into any figures. Investigate this thoroughly to ensure that you stand a good chance of sustaining business at its current level in the initial stages.
For potential and new franchisees a good place to start is the British Franchise Association (www.thebfa.org). Not every franchisor is registered with the BFA, and it’s not obligatory to do so (membership comes with a fee attached), but it offers a great deal of free advice for the new starter.