Is franchising right for you?
It's not for everyone so how can you tell you're suited?
One alternative to starting your own business is to find a small business franchise opportunity.
Franchising is a way of setting up in business with a head start. This way you run the business, but you enjoy the support of an established business and benefit from tried and tested operating models.
You pay the franchisor – the business you’re working with – for a package that gives you an exclusive ‘territory’, using its brand name, technology or products and business model for an agreed period – five years for example – on a renewable contract.
Once accepted as franchisee you get technical and/or business training, operating manuals, often marketing help and sometimes accounting or other admin services. In return, you agree to run the business according to the franchisor’s standards.
You must be clear about what franchising means in practical terms before you start looking for one. It’s worth investigating all the ins and outs, so avoid wasting time and money later on.
Once you’re comfortable with the concept of franchising, it’s a good idea to learn more about the industry and how it’s doing.
Put simply, franchising is growing fast. It’s proven to be the safest way of starting your own business and nine in ten franchisees – the people who run franchised businesses – say they are making a profit.
The franchise industry in the UK is worth £11.4bn and employs over 467,000 people. The average turnover of a franchise is over £326,000.
Small businesses franchising opportunities are not limited to burger bars; there are more than 800 businesses that are franchised in the UK, from plumbing through retailing to will-writing services. Whatever kind of business you’re looking to start, the chances are there’s one to suit you.
It’s an industry that is growing in popularity, although not as fast as many franchisors would like. Many believe a lack of suitable franchisees is thwarting growth – so they are looking for you. Two-thirds of those who go into franchising were in salaried employment immediately before taking the plunge.
Training is given by 100% of franchisors, and 73% provide it in-house. Encouragingly, the relationship between franchisors and franchisees is very good, with the majority saying that their relationship is healthy.
Sound good? It can be, but before you throw yourself headlong into the business, it pays to run some checks and figure out whether it’s what you want to do.
Check what you can afford: Franchises don’t just fall out of the sky, you have to pay for them, and so it may not be for those starting a business on a shoestring.
Check what’s available: There’s a huge range so there’s more than likely something for you. Check out our franchise guides and directory for an in-depth look at the different sectors.
Are you committed? Running a franchise can be hard work, so you have to be fully committed. Get behind with the running of the business, or let standards slip, and your franchisor will not be best pleased.
Get expert help: Talk to your accountant, a support group like Business Link and people who run franchised businesses to find out what it’s like at the sharp end.
Make contact: We have full details of a huge range of franchise opportunities in our franchise directory.