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
• The reputation of a big brand name
• Ongoing help and support
• Defined exclusive territory
• Greater access to finance as increased security due to the 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 the 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