If you're interested in more information on how to choose between a franchise and a independent business, please download our Experience of Business Owners PDF.
31 January 2017
The beginner's guide to joining a franchise
There’s a lot of work that goes into starting a new business venture, and franchising is no exception. If you’re considering joining a franchise, and started looking for information, you have made the first step. However, actually finding the information you need can be a minefield, and it can be difficult to know what you need to know and what to do next. Here’s our beginner’s guide to get you up to speed.
1. Consider your capital outlay
It’s important that you’re crystal clear on your financial position. What sort of a capital outlay can you afford? Are you in a position to borrow money from the bank? Some franchise networks offer vendor finance, as long as you’re a suitable candidate. Others are accredited by banks, making it easier to obtain a loan for that franchise. Consulting your accountant and/or financial planner is a smart first step.
2. Do your homework
One of the benefits of living in today’s world is the wealth of information you have access to. Industry publications, social media and online forums are a great place to start. When you’ve found a franchisor that interests you, research them directly, both on their site, on social, and in the media. While researching different franchise networks, you’re able to reflect and scrutinize, and any red flags will come up pretty quickly.
3. Look for a history of proven success
The good thing about joining a franchise is that you’re able to buy into something with a proven track record. While in the process of researching different franchise networks, look out for the ones with longevity in the market. You want to feel confident in what you’re investing your money in, and a tried and tested franchise model is your best bet.
4. Talk to existing franchisees
You’re never really going to know what a network is like until you join. However, chatting with existing franchisees should give you a nice idea of what it might be like. There are a number of ways you can go about this – whether it’s reaching out via social media, picking up the phone, or politely asking to have a conversation in store. Can you get a sense of their satisfaction with the network? Do they have a good work/life balance?
5. Ask the hard questions
Have an idea of what it is you want and expect from a career in franchising, and don’t be scared to ask your potential franchisor any questions. If you’re looking for a comfortable work/life balance, ask the potential franchisor how they’ll help you to achieve this. If you’re hoping for a certain level of support and guidance, ask the franchisor what sorts of training programs they’ll be able to offer you. Want to know how much money you’ll make? Ask the franchisor to give you a rough idea of existing franchisees’ profitability. At Bedshed, we have a Franchise Investment Calculator which helps potential franchisees estimate profit projection.