We at whichfranchise have spent the past 15 years helping franchisees and franchisors. We have used this experience to outline below our top franchise tips.
Our top franchise tips
Are you right for franchising? – Not everyone is suited to franchising and so before you start looking at franchise opportunities, you need to identify if franchising is for you. What is franchising? What is a franchise opportunity? Are you aware of the disadvantages of franchising?
Research, research, research! – There is no such thing as too much research! It is vital that prospective franchisees do as much research as possible to make sure that they are fully equipped with everything they need to know about franchising. Visit our “All about franchising” section
What do you like? – we get asked a lot “what is the best franchise to buy”. This should not be the question you are asking but instead it should be “what is the right franchise for me?” This is why one of our top franchise tips is to list everything you are good at and what you like doing, and keep this list handy when looking at what each franchise opportunity entails. There is no point buying a franchise because you think it can make you a lot of money, when you wouldn’t actually like working in it! Read “what is the best franchise to buy”
Evaluate the franchisor – not all franchises are ethical, you need to identify the good from the bad. Make sure that the franchise you are buying into is established and that the business has a good track record. A franchise can be new but if a new franchise is also a new business then walk away! A business should only franchise itself once it is successful and has proven that it is franchiseable. We are amazed by the amount of people who tell us that they have an idea for a franchise but do not actually have a business. Read “how to avoid a bad franchise”
Speak to other franchisees – this is the most important research that you could undertake. Franchisees are a vital source of information as who better to tell you about the business than those in it. Make sure that the franchisor gives you a full list of franchisees to speak to and not ones that they have chosen. You can be sure that if they only give you one or two names that these will be most successful franchisees in the network and not a true representation of the company. Read “questions to ask a franchisee”
Don’t cut corners, seek legal advice – when we speak to franchisees who are having problems with their franchisor or have had to leave the network as it didn’t work out for them, we are amazed at how many of them didn’t seek legal advice from an experienced franchise lawyer at the start. We cannot stress enough how important it is that you get all agreements checked over by a franchise lawyer. It is not worthwhile using just any lawyer as they will not know what they are looking for. An experienced franchise lawyer will be able to spot anything that may not be right. It is costly to use a franchise lawyer but if you don’t, it will be even more costly in the long run. The Franchise Council of Australia has a list of legal members.
Finding the right location – getting the right location for your franchise is important. Your franchisor should help you with this. If you are a retail franchise then it is important that you are in a location that benefits from a high footfall.
Speak to banks – a good way of finding out how reputable a franchise is, is to speak to banks with a specialised franchise department. Banks will lend money based on how they rate franchises. If you want an indication of how good a franchise is, then ask a bank how much they would lend against it. If they will not lend then it will say something about the business.
Free information – due to the popularity of the web, there is an abundance of free franchise information out there. There is no excuse to not being able to doing your own research.
Attend a franchise exhibition – exhibitions are great for meeting with franchisors face-to-face. They also usually have a number of free franchise seminars taking place which are worthwhile attending. Plan before you go so that you know who is exhibiting and who you want to see. You can even contact any franchise you are interested in before the expo to ask them if they would be able to meet with you. Read more on “why attend a franchise expo”
Check the Franchise Council of Australia website – a good starting point in your research is to check whether the franchise(s) you are interested in is a member of the Franchise Council of Australia. The Australian Franchise Council represents franchisees, franchisors and service providers to the sector and through members standards and the Franchising Code of Conduct it ensures credibility. Read more on “why join the Franchise Council of Australia”.