Potential franchisees have a lot to consider before choosing a brand
In franchising there are a huge amount of brands offering self-employment opportunities, so how can someone considering becoming a franchisee make their way through the choices?
it’s a question faced by many at the start of their franchise journey and it’s one of many that should be asked before falling in love with a brand. Taking your time and careful research are of paramount importance, as head of franchise recruitment at consultancy Platinum Wave told Business Advice.
Q&A subject: Steve Lampshire, head of franchise recruitment at Platinum Wave(1) What do you do?
I act on behalf of franchise brands to ensure that they receive applications from only the most suitable and well prepared potential franchisees. Our team provides the correct marketing to generate the best leads, and then manages the entire communications and recruitment process right up to final interview.
(2) What’s the very first thing a prospective franchisee should think about?
They should ask themselves Do I know enough about franchising to be able to make an informed choice when looking through listings
At this early stage, the most important considerations for a prospective franchisee are: why am I considering self employment and business ownership? There are plenty of strong messages out there about the benefits being your own boss, making your own decisions, choosing your own working hours, keeping your own money, building an asset for your future but have they considered the full picture of self-employment and are they the type of person who can handle it?
For example, have they really thought about being responsible for generating every penny they earn, not having holiday pay or sick pay or a company car? Or having the discipline to get up and work hard every day without having someone to make them? Some people absolutely thrive in these conditions, but it’s not for everyone.
In terms of understanding the business of franchising they really ought to visit the British Franchise Association website for some impartial advice about the realities of signing a five-year franchise agreement, the issues around funding, how the industry is performing in general and read as many case studies as they can from lots of different business sectors.
Then, I think it is vital that they consider the big picture of what they like to do, what they are good at, how hard they are prepared to work, how much can they afford to spend and what returns they need before trying to choose between franchise brands. Obviously, brands put their best foot forward in their marketing, so it’s important not to get carried away by opportunities that sound great but that might not be appropriate for that individual.
(3) What factors influence the right match? between person and brand?
I think honesty has the biggest influence. Both franchisor and prospective franchisee need to be completely up-front about what each is offering the other that’s the only way to get the right match and for it to last.
The right match? comes when the skills, ethics and expectations of the franchisee are met by the franchise offering (training, support, marketing etc) and performance requirements of the franchisor.
(4) How important is it to speak to existing franchisees in a network (if there are any)?
I think you would have to be mad not to. The franchisor can tell you about the day-to-day of the role based on what it was like when they set up the company, whereas the existing franchisee can tell you what it is like to come in from the outside, go through the training and launch the business for themselves.
As important as it is to seek these opinions, you need to keep an open mind when considering what you hear. If you speak to a franchisee who seems to be flourishing, then try to understand why that is is it a particular skill that franchisee has, or is it the sheer amount of work they put it?
Think about what you might have in common with them or if you are prepared to work the way they do? Conversely, if you speak to one who is very negative about the franchisor or hasn’t been able to make the business work, again try to understand why. It might all be completely true and you should proceed with extreme caution, if not run! However, it might simply be because they don’t get out of bed until 10am or they refuse to follow the system.
(5) What research will a good franchisor expect a prospective franchisee to have done?
Lots. There really is no excuse for a serious applicant not to. From our point of view, when we speak to enquiries who have clearly only glanced at the client’s homepage or half-read a listing, it doesnt fill us with confidence that this is a serious applicant with a genuine interest in the brand.
My advice is always to read everything you can find, go to the company’s website and read both the corporate and franchise copy. Check for case studies, Google the directors and see what comes up, check out their LinkedIn profiles, hunt for expert opinion pieces are they leaders in their field? Do they have an inspiring track record? Are they on Facebook or Twitter or Instagram or do they have a YouTube channel? Are they British Franchise Association members? How up to date is everything?
(6) How much will they want to know about a person’s personal circumstances?
Pretty early on in any conversation they will want to establish if you can afford their franchise. That’s quite personal and some people find it uncomfortable, even rude, to be asked questions about their personal finance, but the franchisor needs to know if they are dealing with someone who can see it through. I think it’s vital that these conversations start early on, and with honesty, because otherwise both sides are potentially wasting their time and setting themselves up for disappointment.
The other very personal topic will be your family circumstances. This might be to gauge a person’s outgoings and commitments; or to gauge the level of support at home. Is the applicant’s partner in favour of them taking on the franchise? Are they prepared for the amount of work the franchisee will be undertaking? Are they understanding of any potential short-term loss of earnings or using savings to buy the business?
Franchisors ask these questions not to be nosey, but to try and encourage openness between all those who may be affected by the franchisee’s decision.
Building a business is tough no matter how much support you get from the franchisor it can be exhausting and naturally carries a financial risk, so most franchisors would rather know that their franchisee won’t be going home to I never wanted you to do this in the first place, when the going gets tough.
(7) Give three tips that youd recommend to anyone considering becoming a franchisee?
Get your finances in order: how much have you got to invest, how much/what are you prepared to risk, what do you need to earn, what do you need to sell it for, would the bank actually lend you money and if so how much?
don’t let yourself be talked into anything by anyone else, especially a franchisor, and be wary of anyone trying to set a pace you are uncomfortable with. it’s your future and your decision, take your time and get it right.
Research, research, research. Read everything you can find about the brands you are interested in. Go see them if they are exhibiting at a franchise exhibition in fact go anyway and get some face-to-face and impartial advice from the British Franchise Association and listen to that advice. Do everything with your eyes wide open and if you are unsure, ask.
