Tweet

Top tips to buy a franchise

Written by: Nick Strong

Article Overview: Nick Strong and Richard Holden, head of franchising for Lloyds TSB bank, look at some top tips for you to consider when you decide to buy a franchise in the UK.

Top tips to buy a franchise

When considering whether franchising is the right option for you, one of the first decisions you need to make is what type of business you have an aptitude for - and what would you enjoy. Running your own business takes a lot of hard work, possibly long hours and a great deal of self-motivation. You must be prepared to follow the franchisor’s business system and accept their terms. It almost goes without saying that you should only consider investment opportunities that are within your budget.

Don’t forget the impact that setting up a business will have on your family – and try and make sure you have their support before you take the plunge. Common sense will take you a long way in deciding whether the franchise you are considering will prove right for you. Investing in a franchised business requires careful consideration as your ultimate success depends not only on your individual actions, but also on the business decisions taken by your franchisor. That makes it even more important to judge their business, its track record and available support before deciding whether to invest.

Finally, don’t be pressurised into signing an agreement before you are ready to do so. Getting involved in a franchise is a big decision and it’s vital you understand exactly what you are getting into. Find lawyer who understands franchising and ask them to take you through the franchise agreement step by step, so you understand what it means. The British Franchise Association (bfa) provides a list of affiliated lawyers on its website www.thebfa.org as well as listings of franchisors that are members of the Association who comply with a Code of Ethics. Lloyds TSB has produced a helpful guide to support your research and provides a list of 35 key questions you should ask a franchisor. A free copy can be obtained through the bank’s Franchise Unit by using the contact form below.

Latest industry statistics show that franchising contributes £10.8 billion to the UK economy. The robust health of the sector is further demonstrated by the very low levels of commercial failures and the fact that nine out of ten franchisees say that their business is profitable. Failure amongst business starts ups is reported to be significantly higher and consequently franchise focused banks such as Lloyds TSB offer preferential banking services and finance terms to franchisees.

Top Tips


Thorough research of a franchise opportunity is vital when making probably one of the most important decisions in your life.
Attend one of the British Franchise Association franchisee seminar days which provide an unbiased view of the benefits and pitfalls of investing in a franchise.

ou can get the Lloyds TSB guide ‘Supporting your franchise business’ for free which contains 35 key questions to assist you with your research.

Be prepared to walk away if the franchisor just seems interested in taking your investment and does not ask you searching questions about your own skills, attributes and motives for setting up as a franchisee.

The franchise agreement should be fully explained to you and checked by a British Franchise Association affiliated lawyer before signing.

Related Articles
  10 Tips for Selecting the Best Franchise
  Franchise information that is pertinent to your investigation is disclosed in the Uniform Franchise Offering Circular (UFOC).
  Helpful Tips for Buying a Franchise
  Franchising with all its Success
  Tips for Buying a Franchise

Article Tags: aptitude, bfa, british franchise association, business decisions, business system, careful consideration, code of ethics, franchise agreement, franchise unit, franchisor, franchisors, helpful guide, industry statistics, lloyds tsb, robust health, running your own business, self motivation, setting up a business, uk economy, ultimate success



Related Forum Posts
Re: 3 Steps To Startup Success - I have recently joined this forum and this is my first post. The forum is really good to for any new entrepreneur or planning to start new business. The tips shared by Evan is really good. I would also like to thank peter for suggestion regarding loan for small business entrepreneur. There is one more option and that is franchise. I think franchise has a different benefits if person don't want to take any risk.
Hello I am a franchise expert - Hello, I recruit franchise owners for successful franchise concepts based in the USA. Many of my franchises are looking to expand north to Canada in all major centers. I enjoy networking and answering questions about franchising. If anyone is interested in the franchise world or looking to buy a franchise then contact me. I have a wealth of information and like to help. Thanks for your time. Michael Somer
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.
Re: Which franchise would you buy? - The franchise to buy, the one that will succeed is the one that is either underrepresented or not represented in the community. Look at your community, identify what service is missing. That is the franchise to pursue. Too many people buy a franchise based on their "heart". A franchise is a "widget". I have found that once people began to investigate a franchise they had never thought of, but find their is a need; the entrepreneurial "gene" kicks in and they get excited. They began seeing the possibilities of success, and as they uncover the nuances of the franchise, they become more interested. It is the uninformed that are uninspired.
What is the Best Franchise? - As a Franchise Consultant I get asked this question on a daily basis. I work with clients to help them find the right franchise and through those conversations they almost always as me: "What is the Best Franchise?". There is no single answer for this question as the answer truly depends on the criteria you set as a perspective franchise owner. Meaning, maybe you want a retail location with 5 employees or a home based franchise with zero employees. Either way, the word "best" becomes relative to what is important to you. I realized quite some time ago that I could never "sell" a franchise to anyone. The only way someone will buy a franchise is if it makes sense for them & their family. Performing the proper due diligence is key to finding the best franchise for you.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Smart & Simple Internet Techniques

Work Life Balance: Adding White Space

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.