It should come as no surprise that a lot of hard work goes into starting a new business, and franchising is no exception. Franchising is great for people who want to be their own boss, but also want the guidance and support of a trusted brand. For those who work hard, it can offer both lifestyle and financial benefits.
If you’re considering joining a franchise, it’s critical that you’re armed with the right information, tools and support, to set your franchise up for growth and success.
So, what exactly should you have ticked off your list before you sign on the dotted line?
1. Understand the sector
Despite the relatively flat economic environment Australia has operated in over the past 18 months, Griffith University’s most recent Franchising Australia Report tells a positive story for franchising, particularly retail. The report found that the retail industry dominates the sector, with 26% of brands operating in this segment. Across the industry, the report predicted an increase in employment and sales turnover, confirming the sector is still a healthy option, provided you join the right brand.
2. Know your capital outlay
While understanding your financial position may sound like an obvious one, it’s absolutely critical. Are you clear on the capital outlay you can afford? Will you need to borrow money from the bank? Some franchises offer vendor finance for suitable candidates, and some are accredited by banks. Consulting with your financial planner or accountant is a crucial first step, and one that you won’t regret.
3. Do your due diligence
We all have a wealth of information at our fingertips, including industry publications, online forums and social media, so use this to your advantage. As a potential franchisee, you’re able to scrutinise and consider a number of different franchise networks. When you’ve found one that interests you, research them directly, both on their website, on social media, and in the media.
4. Look for longevity in the market
One of the benefits of joining a franchise is that you’re able to buy into something that is proven to work. Investing your money in a tried and tested franchise model is going to mean more security and less risk. While researching different franchise networks, look for one that can prove a history of continued growth and satisfied franchisees.
5. Research existing franchisees
It’s hard to know exactly what a franchise network is like until you’re part of one. However, a great way to get an idea of what it might be like is to talk to existing franchisees. You have a number of options here – whether it’s picking up the phone, reaching out via social media or politely asking to have a conversation in store. When you’re talking to them, always try to gauge their level of satisfaction.
6. Speak frankly with potential franchisors
Don’t be scared to ask your potential franchisor the hard questions. Make a list of everything you want to know and don’t stop the questions until you have everything ticked off.
7. Know what’s important
If a healthy work/life balance is important to you, ask your potential franchisor how they’ll help you achieve that. Want to make money? Ask about existing franchisees’ profitability. We have a Bedshed Franchise Investment Calculator which helps potential franchisees estimate profit projection.
8. Understand what support you’ll get
While many of the skills needed to be successful in franchising are transferrable, you’ll likely require some sort of training to get you up to speed. Does your potential franchise network offer bespoke training? Ask what sort of programs and support will be available to you.
9. Consider the culture
Once you’ve spoken with existing franchisees and had open conversations with your potential franchisor, you should have a pretty good sense of the culture. Does this align with your values? Can you see yourself fitting in? For example, we host an annual awards night to celebrate our culture and acknowledge excellence within the network.
Clearly defining your objectives in a business plan is a great way of holding yourself accountable and ensuring you achieve what you set out to do. This is something your potential franchisor should have a lot of experience in – so ask if this is something they can help you with. Ultimately a business plan should be a working document that continually evolves, just like your franchise will.
11. Ask Kochie: how to set up a franchise
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