A fresh start

It is widely apparent that the economy is not recovering as quickly as many had envisaged. Recent reports have highlighted the scale of public sector redundancies, 147,000 over the past 12 months, and the outlook for many is not as rosy as we had been led to believe it might be in 2011.

Despite these stark figures, the outlook is not entirely bleak. For those who find themselves facing redundancy, whilst it can be devastating, it does have the potential to be quite a liberating time – and one when many people contemplate a fresh start in a completely new area of work. If you find yourself in this position, franchising can represent a mine of opportunities. If you are ready for a challenge, to work hard and use your initiative whilst being prepared to commit to following the franchisor’s system then investing in a franchise could offer the opportunity to take control of your own career and lifestyle whilst building a financially sound future.

An attractive concept
Many people will be concerned about how to fund such a move, but it is important to bear in mind the strength of the franchise business model and the advantages which that brings. Franchising has consistently out-performed other start-up businesses and, as a consequence, banks tend to look favourably upon franchise businesses. The formula of a locally owned and run enterprise, driven by a small business owner, with branding, economies of scale and support from the wider network, gives the consumer the best of both worlds and the business a far better chance of success. The 2011 NatWest bfa Franchise Survey revealed that 90 per cent of franchise units were profitable last year – when set against current non-franchise SME failure rates, often quoted at one in three, this is extremely favourable.

The success rates, combined with the variety of types of business that operate in the sector, make franchising a particularly attractive concept for many seeking a change of direction. There are opportunities for an incredibly extensive range of personal abilities and investment levels. Whether your previous experience is in office administration or a more strategic, director-level role, there is something to suit everyone’s skills set. The list of members of the British Franchise Association (bfa), who number in excess of 300, highlights the diversity of the industry – businesses range from shoe retailers, pet food delivery businesses and fast food outlets, to hairdressers and childcare services.

Making the decision
The decision to become a franchisee is not an easy one and the necessary research can be both time-consuming and overwhelming. The following tips offer a starting point and structure for this research:
•    Understand the individual businesses that you are considering and the markets in which they operate
•    Consider your own needs and circumstances as well as what you hope to get out of your franchise
•    Speak to existing franchisees and find out about the challenges they have faced and how the business has affected their lives
•    Consult professional advisors who specialise in franchising. It is unwise to consult, for example, a family solicitor or general lending advisor as they will not be familiar with the idiosyncrasies and complexities of the sector
•    Attend exhibitions and seminars. This is an important part of the research process, helping to develop an understanding of how the industry works and the many businesses involved.

Researching opportunities
The National Franchise Exhibition will soon be taking place at the NEC in Birmingham (30 September - 1 October). As a key event in the franchising calendar, the opportunities that it offers potential franchisees to engage with accredited operations are considerable. With hundreds of different franchise businesses all under one roof, it is the ideal time to gather reliable information about all the various aspects of franchising.

Undertaking your own due diligence, including research on the opportunities available, the work they involve and the market in which they operate, is an essential part of the journey to becoming a successful franchisee but it can be difficult to know what to look for in the businesses you are considering. You need to really look into a business’s background to understand not only whether the company is right for you, but also if it is a good example of its type and whether it will deliver what has been promised.

Your own boss
This resilient industry, fuelled by dedicated individuals, encompasses many different skills and backgrounds and opens up countless opportunities for people looking for a new start. Many have used franchising as a way to become their own boss, but under the safety and security of a proven model, with national support structures to help overcome many of the hurdles that can floor many new business start-ups.

Hard work, professionalism and commitment to the proven business model are prerequisites for franchising success, however, if chosen prudently and managed with enthusiasm and dedication, becoming a franchisee could provide the sound future that so many seek.

For more information
Visit the bfa’s website at www.thebfa.org for objective advice and access to numerous educational and advisory resources.

Advantages of joining a franchise
•    You don’t have to come up with a new idea - someone else has had it and tested it too! The business format is proven
•    About 90 per cent of all franchisees reported profitability over the last 12 months
•    Good franchisors will offer comprehensive training programmes in sales and indeed all business skills
•    You have the opportunity to build your capital as well as your earnings.
•    It is your business and you are the owner manager, providing you follow the system, you decide what goes
•    The major banks are very supportive of good franchising.

Disadvantages
•    Running any business is hard work, demanding the highest level of personal and family commitment
•    You make a financial investment, however, no investment is guaranteed, especially when it depends on the efforts of both you and your franchisor as well as the vagaries of the market place
•    You buy into a proven business system for its benefits but you also take on the responsibility for following it – not doing so may result in you loosing the business

For information on the types of franchises available, please click here