How to Find the Perfect Franchise to Buy Into
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 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.
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.