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How to Find the Perfect Franchise to Buy Into

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The biggest mistake as a potential franchisee is to pick the first one that you come across and settle with that. Just because you may not know all there is to know about franchising yet, doesn’t mean you should be timid about it. Take your time to find the perfect franchise that you wish to partner with. Yes, that’s right, ‘partner with’. Let that sink in because that’s very much what the business relationship will be like. They’re like the senior partner calling the shots, which is all the more reason to choose carefully to ensure success.

Here is how to find the perfect franchise to work with.

Look at Plenty of Them

Find a few reliable sources that are promoting a “Franchise for Sale”. Some will have some kind of promotional relationship going. Others will have a list of franchises for sale, such as Franchise Local, which also provides reliable information for review. Look across different industries, business types, and operations. Get a feel for what’s available in Scotland and the rest of the UK.

Think About Local Relevance

Certain franchised brands perform better up in Scotland compared to down south, in England. Do you know which ones they are? If you’re thinking bigger and are looking for a franchise where it can support strong performing retail locations in Scotland, England, and Wales, then you’ll need something with broad appeal. Therefore, your focus needs to stray away from something that specifically appeals to the Scottish marketplace and brands offering something widely applicable.

Is a Long History Important to You?

Does the franchise need to have a long track record? Do you believe this is an important criterion for your investment? A long history with a well-established trusted brand is valuable. However, don’t consider that alone. For instance, there are plenty of long-standing retail brands that have fallen in the last few years as online sales have grabbed a chunk of the market. Longevity doesn’t mean as much as it used to.

How Profitable Are the Franchise and Franchisees?

This brings us to the next point – the profits.

The Franchise

The franchise needs to be a profitable operation. If it isn’t, then their shareholders (or the banks) will eventually shut it down. Then you’ll be left with a business that’s rudderless, without a main supplier for sellable goods and no marketing partner either. That’s not a good place to be.

The Franchisees

Look at their franchisees. Are they making a profit after setting up, serving any debt, paying ongoing franchise fees, etc.? Are profits consistent year on year? What about seasonable differences in the business? Does it do well in the warmer months, but does business tail off during winter? How does this affect cash flow and profitability?

What Training and Materials Do They Offer?

Another aspect of choosing a better franchise is the training and materials that they provide. Given that you’re starting from a blank page, they need to fill in all those blanks. This includes a detailed breakdown of all their systems, equipment, processes, and staffing procedures needed to operate well. Franchises that supply poorly in this regard are usually less consistent in other areas too.

Choosing the perfect franchise may not be possible, but finding a well organised one with the right people behind it, good training materials, and solid profitability is totally possible.

Reasons to Consider Starting a Franchise Business

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If you’re thinking about starting a business, there are certain considerations that can help you choose the type of business to start. Many people consider whether to operate as a sole proprietorship or as a corporation when they first begin making plans for their business. It’s also worth taking into account whether the business is going to be a “home-based” or “brick and mortar” operation, as each type of business is organised differently from the outset. In addition, some entrepreneurs might also want to look at operating either as a franchise. This article explores the benefits of operating as a franchise for entrepreneurial endeavours, highlighting some of the factors that can influence whether a small business should consider going down this path.

Expertise and Know-how

Starting any kind of business requires that entrepreneurs develop skill sets in areas outside their expertise. A home-based or brick-and-mortar shop owner must be well versed in finance, marketing, inventory management, human resources, and many other requirements so they can keep their small business afloat on an ongoing basis. Franchising streamlines this process by allowing entrepreneurs to outsource the business expertise they don’t already have and gain new franchise information already provided. In other words, when you sign a franchise agreement, you gain access to specific knowledge and skills that can speed up your success in starting a new company.

Let’s say that you want to open a coffee shop in your town, but another franchisee has already established a successful chain of coffee shops in the region. When you sign up for their franchise agreement and begin operating as part of their chain, they have an incentive to help teach you everything you need to know about starting and running a successful coffee shop so they can have more customers frequenting one of their own stores.

Existing Customer Base

The main benefit to starting a business as a franchise is that the brand name already carries recognition among your target market. If you choose to start operating as a regular small business, you might find it difficult to attract customers because they will not trust the new company. Franchisees are able to use the recognised branding of their parent company to help them establish customer loyalty right from the beginning.

To illustrate, look at the logos of two different types of companies: Starbucks and Joe’s Coffee Shop. Even if they were both located in the same shopping mall, most people would likely buy coffee from Starbucks before trying Joe’s, due to their previous experiences with Starbucks. Thus, if you were to secure a Starbucks franchising agreement, you’d get their customers.

Less Financial Risk

In most cases, it is more difficult for a home-based or brick-and-mortar business to stay afloat initially because of a lack of start-up capital. This means that each month their businesses must bring in at least enough money to cover all expenses in order to continue operating successfully. Franchises have an advantage over regular small businesses in this area.

If your small business fails in the first few months after opening, you will experience bankruptcy at some point because you will have invested all of your personal funds into starting it. By contrast, if you sign a franchise agreement, the parent company will usually carry much or all of the financial risk for operating your particular business. They are more likely to be able to hire trained staff and keep their marketing spend high enough that your business can continue operating even if sales aren’t as high as expected in the first few months.

Flexibility

Another big benefit to starting a franchise is that you get to run your business in a way that fits your lifestyle rather than having to adapt your personal life around work requirements. This allows you to create a schedule for yourself where you can work part-time while still operating your small business successfully and earning an income from it. In comparison, most people find it difficult to run a home-based or brick-and-mortar business because they must be available on site every day in order to meet customers’ needs when needed.

Franchise owners do not have to come in every day but rather your opportunities for travel and leisure activities will be much greater than that of regular small business entrepreneurs who must stay home and wait for customers to buy their products and services.

Starting a small business is hard work and requires a great deal of knowledge and skill set development. If you’re considering making this type of transition, one factor to consider is whether starting as a franchise might ease those initial hurdles for you more than going down another route would. For entrepreneurs who want to avoid putting all of their personal funds at risk and still run a business, franchising provides a viable option. You can start by doing your own research or looking for opportunities right now.