Taking the correct steps before looking for a franchise is important because it will allow you to determine if franchising is right for you. Buying a franchise can be a great move for an entrepreneur who doesn’t want to create a new business from scratch. In theory, franchisees gain a model that already works on every level, from branding to pricing to marketing. This means if you do the correct research and work hard, the benefits can be very lucrative!
So, what is important to consider before looking for a franchise?
Personality Test – Is this for me?
You must be a specific type of person and portray the right traits to become a franchisee. This is because it can be quite a highly regimented system you’re buying into. You will be adopting the ideas and practices of the franchise, leaving little room for creative freedom. To determine if this lifestyle is for you, you can attend Franchise Discovery Days and talk to existing franchisees to find out.
It would be worthwhile investigating into your personal and professional competences and personality traits. Do you have what it takes to be a manager, and to follow processes? Maybe you are too entrepreneurial to buy into a franchise, as you have too many creative and individual ideas you wish to purchase, which contradict with following existing systems?
There are many professional and personal tests which you can take to determine what drives you in life and to evaluate if franchising is the path to propel you to achieve your overall goals.
Count your Money
Knowing what your budget is when looking for a franchise is important to make the right career choice and make sure you don’t waste your time when looking to start out. Most competent franchise operations have a structured financial plan they can offer, outlining the start-up and ongoing costs they should expect. What’s unique about the Award Leisure Franchise scheme is that all franchisees are expected to get a return on their investment within the first year! For most franchises, this is unheard of and it can take a few years for some business to break even and start making profit.
It is important to understand how much personal investment you have without considering funding as many franchise models will support contribution from both but ask for a minimum percentage of personal investment. You also need to consider working capital and if this has been factored in the projected forecasts.
‘Having a plan with money doesn’t just help you right now, it also gives you vision and hope for the end goal’.
What is your End Goal?
Before choosing a franchise, it is important that you understand and set clear goals of what you want to achieve. What is your end goal? What do you want to achieve from the venture and when do you seek to achieve this? Each franchise offers different terms: 5-year agreement, 10-year agreement, sometimes longer. Does this fit your plan?
Consider the stakeholders involved that will be affected by your decision to franchise? Are they supportive and is the impact positive? Does the franchise opportunity offer room for expansion or growth, such as multi-franchises? Or, perhaps you only see this as a 5-year plan before retirement; does the franchise offer enough potential to reap enough rewards in this time frame?
I know you are thinking, “why would I think about this now?! Surely, I think about this during my term once I am in the franchise?”
It is important to match yourself to a franchise that will help you achieve your goals – making a potential franchisor aware of when you aim to get out is vital from the first point of communication.
The more understanding you have from what you want out of a franchise opportunity, the more you seek to gain. The transparency is clear along with the overall goal and vision. The higher the drive, the better the relationships built with franchisors and in turn the greater the success. Make sure you’re clear on all the points we have covered before making the all-important decision to open a franchise!