Buying a franchise is a great starting point if you’re looking to take your first steps towards running a successful business and being your own boss.
Becoming a franchisee gives you the benefits of working for an established brand but the freedom of being self-employed. But with so many different franchises available, how do you choose the one which is right for you?
Here are five questions you should ask before signing the dotted line on a franchise agreement:
- Does it use your existing skills?
Ask yourself if the franchise you are interested in uses your existing skills or is in an area you are already passionate about. Building up a business is hard work and can be a steep learning curve. Making your franchise a success will seem like less of a challenge if it uses some of the skills you have developed in your previous career or it builds on one of your interests. For example, our Noodle Performance Arts franchises are ideal for people who already have some experience in performing, teaching or working with children or a passion for singing, dancing or drama.
2. Do the numbers stack up?
Spend time looking at exactly how much buying the franchise will cost and what other expenses you are likely to incur in the first year. The company you are looking to become a franchisee with should be able give you detailed information about what your initial outlay will be and exactly what the fee will include. Avoid investing in businesses which are vague about the costs as you may find yourself having to pay for hidden extras further down the line. Ask the company for figures on what kind of income they would expect you to be making and when and weigh up whether it seems to be a worthwhile investment of your time and money.
3. What’s your target market?
When you’re starting any business, whether from scratch or buying a franchise, you need to make sure you have a clear understanding of who your target market is. Is there enough demand for the goods or services you are offering for you to make a profit? Do your homework and check out the competition to make sure you won’t face an uphill battle by entering an already overcrowded marketplace. Make sure you know exactly what area you can operate in as part of your franchise agreement and check whether or not other franchisees will be able to work in the same patch as you. With Noodle each franchisee is given their own exclusive territory so they are not competing against each other for customers.
4. Will you have ongoing support?
Running a business can challenging and one of the key benefits of buying a franchise is that there should be a support network in place to help you achieve your goals. Before you commit to buying, find out exactly what help and support you will be given both at the start and further down the line. Will there be any training to help you get started? Will you be able to ask questions and get advice when issues arise? Will you be given any help to promote your business like promotional materials or a page on the company website? Is there any back office assistance for admin tasks? Noodle franchisees are given full training and a comprehensive manual to help them hit the ground running with their business. There is also ongoing management and marketing support to maximise the chance of turning the franchise into a successful and profitable business.
5. What exactly are you committing to?
Spend time reading the franchise agreement in detail before making a decision. How long does the franchise agreement last and are there any restrictions? If you want to work part-time, check that you are not committing to a minimum number of business hours which may not fit in with your lifestyle. Make sure you know exactly what obligations you are expected to meet so you can work out if it is right for you.