As the UK franchise sector has grown, so has the number of different franchise opportunities available. You only need to search for franchises for sale on the web and you will be met with a plethora of directories and other listings promoting various opportunities.
However, before you go any further you should take the time to understand what makes a good franchise opportunity; one worthy of your commitment, time and investment - anddiscover the diversity of franchises on offer.
The following gives you objective, unbiased advice about the right steps to take, the areas to consider and the questions to ask when you're looking at franchising.
Understanding the franchise opportunities in front of you
Some franchise opportunities are not franchises at all – in fact in some cases you are buying a job to sell a product or they are a licence to trade under a name, but without the same type of business ownership, training or support that comes with franchising.
So how do you know that a business is a proper franchise?
All businesses that are accredited by the bfa are proper business format franchises that have passed a strict set of standards to check that they are running realistic, sustainable and ethical franchise operations. However, there are a number of franchise companies that are not members. Some of these will never meet the standards. Others will, but choose not to make the changes, or just choose not to be members even if their standards are high enough.
Your job is to be able to identify the good from the bad and the real franchises from the imitators. We have provided a set of resources on this site to help you with this, such as those mentioned above and our franchise seminars. Additionally, the following will help you identify if a business is a real franchise or not.
Real franchise opportunities will need to be made up of all of the following:
- The business model needs to be proven for a minimum of 12 months.
- The proven business model needs to be the same as the franchise opportunity. This means that they haven’t proven a coffee cart outside of a train station, but you are looking to take on a large retail unit under the same brand.
- The brand will be protected by the franchisor to prevent unwanted misuse.
- The business model must be transferable, which means it can be duplicated in more than one location.
- Franchise opportunities need to be teachable and need to come with a training programme to ensure new franchisees have the correct knowledge to operate the franchise. In some businesses this may be a very short training programme of a few days and some will be several months.
- Franchise opportunities will be supported by the franchisor in return for an on-going Management Service Fee (MSF) payable by the franchisee.
- The franchise opportunity will come with an Operations Manual, which sets how the business operates and will provide all the details needed to ensure you run the business in line with the proven franchise model.
- Franchise opportunities are always tied together with a Franchise Agreement, which is the legal contract setting out commitment, restrictions and termination clauses of the relationship between the franchisor and franchisee. This is a substantial document, which is non-negotiable and weighted in favour of the franchisor. You will need a specialist franchise solicitor to review this.
- Finally, all franchise opportunities are opportunities for you to run your own business under agreement, using the franchisor's brand, system, training and support. This means you are a business owner and not an employee. Any good franchise opportunity will make this clear and it will be structured in a way that allows you to build customer loyalty and brand awareness with your business locally. This becomes an asset that adds value to the business when you come to sell it.
- Get in-depth, unfiltered tips on the right way to research if franchising is right for you at one of our monthly franchise seminars
- If you have already decided that franchising is for you and you want to view the various franchise opportunities available accredited by the bfa then see the bfa member directory
- If you are in need of professional advice for reviewing legal documents in franchising, gaining finance for a franchise or need accountancy advice visit the bfa’s accredited professional advisors (Affiliates)
- For key steps to follow, the advantages and disadvantages of franchising and 50 questions to ask a franchisor visit the bfa’s advice zone on joining a franchise