So, you have decided that franchising is a great career and investment option for you and you would like to buy a franchise? Now the question remaining is which one?
Choosing a franchise means both choosing a career and an investment all at once, and with the vast amount of franchise options it’s no wonder that the task may appear daunting But seeing the choice of which franchise broken down into these two elements – an investment and career – can make the task a lot easier.
An Investment?
If you were choosing to invest money in a company on the stock exchange, what would you look for in a business as a guide? Past financial performance, current market demand for the goods or service, company stability, reputation and so forth may be just a few of the factors you would take into account. Well, the same apply when selecting a franchise.
The nuts and bolts of choosing a franchise from a financial point of view – from operating a franchise to costs and franchise finance, and franchise marketing, are dealt with in more detail in ‘Buying a Franchise’.
A Career?
Many people make the mistake of seeing a franchise solely as an investment, without acknowledging that the franchise that they choose will become their occupation for a good period of time.
Below are four things to consider when choosing which franchise is the one for you:
Which franchise sector is the right one for me?
Fast-food, finance or fitness?
Generally people are attracted to a franchise business with a big name. Although this is important in terms of financial stability, it is more important to find a franchise which aligns with your skills and natural aptitude.
People excel in an area they are both passionate about and which matches their skills.
Ask yourself questions like; what past job have you enjoyed the most? If all jobs paid equally what would you do?
Take stock of your own personality traits, business goals and approach, and consider matching those characteristics and desires with those of potential franchisors. Remember; a franchisor is more than a boss-in-kind, he or she will be a mentor, business consultant and someone who you will be in a professional relationship with for the life of your franchise business.
Training and Development
Given that the franchise you choose is a career path, how important is advancing your skills in that field? If professional development is important to you, you should probably consider choosing a franchise which offers both initial and ongoing training and development courses, as well as providing room for expansion once you have established one successful business of your own.
Small vs. Big franchises
Once you have though about which franchise sector aligns best with both your skills and passions, another issue to consider is the size of the franchise which you wish to become a part of; both larger and smaller franchises come with their own pros and cons.
The major benefits of franchising with a larger franchise, are that they generally come with an established and well known brand identity. This means franchisees will already have a consumer base with which to provide their products as soon as their franchise launches. Larger franchises also have more access to resources, increased purchasing power and generally a business systems which has been proven overtime, and therefore afford more financial stability.
The down-side to this sized franchise is that franchisees are usually expected to follow these business systems to the letter, with little room for autonomy.
Smaller franchises allow for easier access to the franchisor, without the larger bureaucratic corporate management structures that can sometimes govern bigger franchises.
Franchisees will generally have more input into the growth of a smaller franchise. Financial instability can be an issue, but don’t forget, it is these smaller franchises that often become the bigger ones later on.
One mistake often made by potential franchisees is assuming the size and reach of a franchise before finding out its exact size - that seemingly small home service provider franchise, could actually be just one branch of a larger franchise network.
Before choosing a franchise remember to research the size of the franchise business and its management structure to determine wether it’s the franchise business for you.
Lifestyle Changes
A franchise will change your life. Sound a bit dramatic? Well, depending on the franchise you choose to become a part of, running your own business can be a full-time plus job or a supplementary income.
This can sometimes depend on whether the franchise business can be operated from the home or mobile van, or needs to be maintained from the traditional shop front.
Customarily, mobile franchises and those based from the home require the franchisee to work less hours and are more flexible than the operation of, say, a traditional store. A highly visible shop-front however, can attract passing pedestrian traffic, which essentially takes a bit of the pressure off marketing.
There is no right answer as to which kind of franchise is the best option – it is an individual choice. However, it’s a good idea to think about just how much time you can afford to give to your franchise business and how it will affect your relationships. Knowing that you have the support of loved ones is a must before you take the plunge, and buy a franchise business.
The Franchise Association of New Zealand is an official regulatory board for franchises in New Zealand. They facilitate the process of learning and sharing information, and encourage high standards of conduct through the Association’s Code of Practice Ethics, by which all its members must abide.