Steer issue 22 May 2019 - Page 21



FRANCHISE
How do I know that a
franchise is ‘future proof’?
The short answer of course is that you don’t. It’s
impossible to predict the future and success is not
guaranteed for any business – be it independent or
franchised.
However, we all know (and continuous research has
confirmed) that the risks involved in a franchised business
are greatly reduced and consequently, whilst no guarantee
is given, the chances of success are far greater with a
franchise compared to an independent business.
So, with these caveats in place, there are steps/actions
you can take to enhance the chances of success of your
chosen franchise and some of these considerations are
simply a matter of common sense.
Membership of The British Franchise Association (BFA)
would indicate to me that the business has been subject
to and passed independent scrutiny; whilst I would also be
more confident of businesses that have proven themselves
by being in business for a number of years.
But it is more than common sense, you also need to
look closely at the franchisor and the level and quality of
their support.
If I’m looking to buy into a franchise then certainly I
would be looking for more than ‘telephone advice’ and
support from a distance.
I want real people understanding my business and
providing me with proactive cover in the key areas of
marketing, sales, business planning, procurement, training
and finance.
I see the best franchises as those that foster a ‘marriage’
and, as such, I want the franchisor to be a positive
participant in helping grow the business and, as such,
should make the bulk of their money from a royalty based
on business performance (and not through a huge initial
fee).
This encourages the franchisor to work hard with the
franchisee to help develop their business, and over time
develop new income streams for the franchisees.
The franchisor therefore is a key point of reference
when evaluating the ‘future proof’ of a business, and their
support, financial standing, longevity and stability should
all be closely examined in direct consultation with them.
You should also seek advice from business professionals
such as the banks, accountants and the BFA to get a
feeling for the reputation of the franchisor.
All of the above of course acts as a sieve lessening the
risk with each shake.
But as a final, and maybe most important, point of
reference I would always speak personally to two or three
existing franchisees and get their input on the business
itself, the support of the franchisor and the robustness of
the proposition.
As the old saying goes the only guarantee in life is
death and taxes, but with a little forethought you can at
least further reduce the risks involved in owning your own
business.
i
Nigel
Topliss
Nigel Toplis is managing director of
The Bardon Group. Contact him on
Tel: 01530 513300 or
Email: info@thebardongroup.co.uk
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