[ FRANCHISE FORUM ]^
Rewarding venture
There are a lot of factors to consider before you invest in a franchise,
Kate Pullen, director of franchise at NatWest, says
I
nvesting in a franchise is
becoming an evermore popular
option for entrepreneurs -
aligning your independent
instincts with known brands to build a
sustainable business.
Before you go further with any idea,
you need to be honest with yourself, as
there are a lot of factors to consider.STRENGTHS AND WEAKNESSES
Firstly, take a look at your strengths and
weaknesses. Do you have the capability,
spirit and talent needed to run your
own business? And, importantly, do you
have the support? Starting a business
can take up all of your time and it’s
easy to underestimate the additional
responsibilities and demands on your
time.
Before embarking on any venture,
you should ensure you have sufficient
capital - you will need at least 30 per
cent of the start-up costs or half for a
new franchise.We recommend using services that
are affiliated to the British Franchise
Association.APPROACHING A BANK
When looking for a bank, it’s a good idea
to approach one that has a dedicated
franchise department, which will have
a good knowledge of the franchise, how
it has performed over the years, what
the business plan should include and
how the franchise will perform in the
early days.
Running a franchise is not without
its risks. However, provided you have
a sound credit history and a robust
business plan, in the majority of cases
it will be a rewarding and exciting
business venture.EXAMINE COSTS
CLOSELY, IN
PARTICULAR THE
FRANCHISE FEE
AND MONTHLY
MANAGEMENT FEE”
Research is key to success. How
well known is the franchise and how
do the public view that product or
service? Public opinion can be the
difference between success and a
failure.
Examine costs closely, in particular
the franchise fee and monthly
management fee. Are they value
for money and will your margins be
sufficient to support the business after
payment? Training is usually provided
by the franchisor, but additional
instruction might be needed and this
should be factored into costs.
Always obtain a full list of existing
franchisees - and don’t just speak to
those suggested by the franchisor. Find
out how the business is performing and
what support and service is provided by
the franchisor.
Always seek professional advice
from an accountant about income
and profit projections and from a
solicitor about the legal agreement.Call 020 7747 1977 or email
[email protected].INFORMATION