Thinking of buying a franchise? - X-Forces Enterprise
hello
ICAEW and X-Forces Business Advice Series: Managing Cash Flow
February 5, 2017
Valentine’s Blog: Partners in Business!
February 14, 2017

Thinking of buying a franchise?

What is a franchise?

When you are buying a franchise, you are buying the right to run a smaller, similar, version of an established business model from the franchisor. As a franchisee, you will own, run and operate the company, but will follow an existing blueprint. Essentially, you are operating your own business under the guise of a larger corporation, the Franchisor.

What are the advantages and disadvantages of owning a franchise?

Advantages:

  • Working business model
  • Reputation of a big brand name
  • Ongoing help and support
  • Defined exclusive territory
  • Greater access to finance as increased security due to backing of a proven business model

Disadvantages:

  • High initial start-up fee and ongoing fees
  • Usually a fixed term agreement
  • Lead generation not always included
  • May have stringent KPIs set and potential to revoke agreement if these are not met
  • You will not have full control over the business as the franchisor will retain some decision making capabilities

Considerations when starting a franchise

  • Likely to have lots of supporting material prepared already – make sure you ask for this
  • Ask to speak to existing franchisees to hear about their experiences
  • There is often an upfront cost associated with purchasing a franchise which can be quite large. Find this out as early as possible. Will you need funding?
  • Seek independent legal advice in relation to the contract
  • With many franchises you will be assigned a particular geographical area. Conduct your own research into the area, especially the demographics of the area and any local competitors.

What franchises have X-Forces supported?

Here are a few of the #XFSuccess franchises we have launched:

  • Subway
  • Jackson fire and security
  • Tubz sweets
  • Oven Clean Ltd
  • Magic Maths
  • Minuteman Press
  • Chips Away car body repairs
  • Puddleducks Swimming Classes
  • Oscars Pet Food
  • Lockforce
  • Smart PA

For more information on running a franchise, check out: www.thebfa.org

Comments are closed.