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Are you cut out for success as a franchisee

Guest post by: Christian Seaman

Article Overview: With 55 per cent of British franchisors citing a lack of suitable franchisees as their biggest barrier to growth, Stuart Anderson takes a look at the qualities that franchisors are seeking in their ideal franchisee candidates.

Are you cut out for success as a franchisee

Less than seven out of ten... these are the odds of survival for more than three years - never mind achieving success - for a new business start-up in the UK today. According to survival rate statistics of VAT registered businesses released earlier this year by the Small Business Service, the survival rate for UK businesses over a three year period is 68.9 per cent.

That means that almost one third of the UK's entrepreneurs that plough their business loans and nest eggs into new businesses will lose out to poor marketing, bad organisation, wrongly identified markets, inaccurate financial forecasts, management mistakes, shifting economic conditions…or any number of other pitfalls littering the road to building a successful business.

Statistics such as these turn many aspiring entrepreneurs off the idea of starting their own business. However, some 33,500 of the UK's business people have chosen to invest their money into a more proven avenue to business success by purchasing a franchise.

By investing in a franchise, the majority of franchisees will ensure that their business concept is:

* offering a product or service with proven demand

* profitable

* nationally branded

* constructed with professional systems and procedures

* set up with realistic financial forecasts

* supported by experienced management staff

* opted into buying power greater than on its own


Their franchise provides them with exclusive access to the brand, systems and training of their franchisor in their protected territory for the lifetime of the agreement, all secured through the investment of an initial franchise fee and payment of an ongoing management service fee (typically a percentage of their turnover - currently averaging 8.1 per cent*).

However, despite all these benefits a franchise does not guarantee success. Franchisors that are committed to building successful franchise networks put a lot of effort into qualifying franchisee candidates. The individuals they are seeking will have the ability to soak up their knowledge and systems and develop a successful business through a mixture of hard work and the proper implementation of their business concept.

So how do you know if you are truly suited to owning and operating your own business? Take a look at the full "Are you cut out for success as a franchisee?" article on the The Franchise Magazine website to find out how franchisors assess franchisee candidates:
http://www.thefranchisemagazine.net/franchise/FDS/Are-you-cut-out-for-success-as-a-franchisee/1195

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Related Forum Posts
Dispute between Supplier and franchisee - This very much depends on the attitude of the franchiser. A good franchiser would be more than a little concerned about a franchisee not paying the bills purely from the perspective that it might tarnish the brand name. However, be aware that this might be struggling franchisee with a company that couldn't give two hoots about you being owed money. Personally I would be inclined to approach the person first and inform him or her of your intentions to talk to the franchiser before you actually do. This at least gives the franchisee the chance to rectify the situation.
Calling All Entrepreneurs - Hi everyone! This is the first forum I have ever posted to but hopefully not my last. I come from a franchisee family, however my background and education is in Marketing. I wanted to seek out new entrepreneurs to discuss what obstacles you have encountered or are currently facing? One of the benefits of being a franchisee is we have the opportunity to ask the head office any questions/concerns we may have. I thought it would be nice to have a open dialogue to discuss any issues. One of my biggest hurdles is attracting customers, I've noticed trends in social media and search engine techniques but what are other emerging strategies? I'm considering different loyalty marketing campaigns but am unsure about the success of these. I look forward to interacting with all of you and learning about all of your experiences! Take care, Kamna
Dispute between Supplier and franchisee - The franchisee is a totally legally separate entity from the franchiser, and frankly it is no business of the franchiser. And the most important reason you are also likely to totally alienate the franchisee. I don’t know enough about your relationship with franchisee to comment on the rights and wrongs: but I do know this - If there was even an ounce of "right" on my side in the non payment, and certainly if my problem was the franchise model was not working, I would make it my mission to delay payment all the way to the courtroom door anyone who was so sneaky as to go behind my back to the franchiser.
Franchise Territories - [quote="franchisebrief.com":1dfdbmhp]This information will be included in the UFOC. If the UFOC states that there is no protected territory, then I would be suspicious. If UFOC states that each franchisee will have its own territory, then there should not be any problem.[/quote:1dfdbmhp] Any franchises that I'm familiar with have a territory or distance provision that prevents franchisees from overlapping their territories. This is only a problem when you have an underproducing franchisee - but they should also have a provision to give a franchisee a set amount of time to make a go of the location and territrory. Shri
Re: Franchising Brokers vs Franchising Consultants - Franchise consultants are free and work with you without any obligation. they do not work for any one franchise but do get a percentage of the franchise fee when a franchisee that was registered with the franchise came from the consultant and the franchisee signs. They will try to match up your interests and skills to franchise businesses that are right for you. They can explain franchise guidelines and help you in any way they can. Franchise brokers usually get paid by the client and/ or franchise (generally get some type of commission). Additionally, they can get points or referral fee off the deal if they refer you to a lending resource too after they sell you on a franchise. Typcally they will try to sell a prospective franchisee on a larger deal so they get a larger commission.


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