There is no wonder why many entrepreneurs engage in the form of the franchise business. The reason behind this franchise business annually generates two trillion dollars worldwide. Another interesting fact is the franchise account for around 50 per cent of all retail sales in the UK. It makes sense.
When you go with franchises, you don’t need to get involved in this. Someone else has gone to the effort and expense of researching, developing, and branding business model. Apart from that success rates for franchises form of business is quite higher and it also consists of less risk, if compare with an independent business.
Franchise business is a hotbed of successful opportunities. Every day, you will find many Top franchises for sale. In the UK, most of them seem to be restaurant franchises business, but now other types of businesses are also arriving in the franchise business industry. If you are looking for a top franchise for sale, you need to consider some key factors.
Factors that you should consider while choosing to franchise
- What is your interest:
In the UK, the duration of the franchise agreement is ten years. That’s why it is important to choose the business unit in which you have interest so that you can work for your passion for a long time.
- What is your affordability level:
In franchising, the average initial investment is quite low. Before choosing the franchise, know about the cost of the particular franchise you want to buy and think about whether you can afford it or not.
- Your freedom level:
Know how much involvement you need to provide in the franchise operation. Apart from that, it is also important for you to understand the flexibility level you will get to do some minor changes to your franchise business.
- What are the opinions of other franchises:
Feel free to take feedbacks from franchisees of the franchise that you are choosing. Ask then their experience with the particular company, what are their earning limit, supports they are getting from the franchise and about their freedom.
There are a lot of franchises for sale. But it is very important to have a solid selection process to decide if the particular franchise business is right for you and whether the costs of establishing and running the franchise match with the effectiveness of the offering package of the franchiser.
Types of the franchise for sale
- Product, service and trademark franchise business
Under this system, the franchise is granted the right to sell products and services from a recognized brand. Most of the franchisees consider one franchiser’s product/ service line, by recognizing their business with that particular franchise. Some of the examples of such franchising are automobile dealerships, gas stations, soft drink bottlers, and more. Here the franchiser will have little control over the franchise. Because the major concern for the franchise is the integrity of the products and services.
Some important factors of such franchising are:
- The structure and the responsibilities of franchising.
- Franchiser will render standardized products and service.
- The Franchisee here will pay the franchise cost and also has some responsibilities like training, control system, operating system, marketing, accounting system, equipment and more.
- Business Format Franchise
Here the franchise is permitted the right to use the major marketing system with significant assistance and professional guidance from the franchiser. Under this type of franchising, franchises include restaurants, retail, hotels, business services, automotive products, and more. Here the franchise sales the franchisor’s products and services using the trademark of the franchisor and also work as per the franchisor’s format and procedure. In the UK, it is the most popular type of franchise system. Under this franchise provides:
- Equipment and signage.
- Infrastructure plans.
- Marketing strategy and system.
- Business strategy.
- Personnel training.
- Accounting system management.
- Business reporting.
- Management format franchise
Under this, the franchise operates from regional head offices. The franchise will involve the development, management, and coordination. Here you will get two types of franchises like manual franchise and service sector or executive franchise like education, training and more. Such franchises don’t deal with end customers directly. The franchisee will be responsible for some task like management of the unit and marketing.
- Investment Franchises
For this type of franchise business, you will require a large amount of capital. Here the franchise plays the managerial advisory role, not the director.
- Individual-run franchises
Here an individual sells products and services within a particular industry. Under such type of franchising, the franchisor offers the trademark and branding to the franchise to sell the products. It requires less amount of investment and is perfect for home based business or smaller startup units.
Before choosing a franchise business, know your legal and ethical responsibility
As per the law, the International Franchise Association covers franchiser in around 50 countries and follow the code of franchiser’s obligations to franchisees. Any disagreements between franchisees and the franchisor will be treated as red flags. So keep in mind the following factors:
- Litigation –
It is the primary responsibility of franchisors to provide a franchise disclosure document for serious franchisee prospects. The document should consist of the litigations in which the franchisor is involved. More than two cases per 100 franchisees can be treated as the trouble. If the franchise against the franchisor registers the cases, then the condition will be more severe.
- Eager Franchisors –
Remember that a good franchise makes a Good franchise. So be careful while signing the contract with the parties.
- Unit failures –
It is the responsibility of the franchises to disclose how many units have closed or turned over and what the reason behind that was. For the long-running franchises, turnover can be expected from time to time. For the new franchises, high turnover means there are some problems.
How do you buy a franchise in UK?
Buying a franchise in the UK involves several steps. Here is a general guide to help you through the process:
- Research: Identify your interests and budget.
- Explore: Check franchise directories and attend exhibitions.
- Financial Planning: Determine your budget and seek financing if needed.
- Legal Advice: Consult legal and financial professionals.
- Contact Franchisors: Inquire about opportunities and gather information.
- Due Diligence: Investigate franchisor reputation and talk to existing franchisees.
- Visit Existing Franchises: Understand day-to-day operations.
- Business Plan: Develop a detailed business plan.
- Financing: Secure necessary funding.
- Legal Documentation: Review and sign the franchise agreement.
- Training: Attend franchisor-provided training.
- Launch: Open your franchise and follow guidelines.
- Ongoing Support: Stay in touch with the franchisor for support.
Remember that the process may vary depending on the specific franchise and industry. Always seek professional advice, carefully review legal documents, and make informed decisions based on your research and due diligence.
However, you have done your study about the franchise opportunities and found an opportunity which will match with your requirements and passions, be sure to ask professional attorney so that the attorney can study the franchise disclosure document and subsequences of the agreement. It makes sense to have expert advice before moving ahead.