6 unknowns about franchising

For most people looking for information, the internet is their first port of call. This is likely to be true of franchisees doing their research too. However, there are some things that you won’t find online. Here, we take a look at six unknowns about franchising that require you to step away from a screen if you’re to learn more about them.

6 unknowns about franchising

Are you a suitable match?

Franchise websites

It can be challenging to establish whether or not you’re a good match for a franchise. In most cases, franchises will leave the ‘franchisee requirements’ section of their website deliberately vague so that they don’t put off potential applicants and inadvertently reduce the available talent pool. This means there’s often a certain amount of ambiguity surrounding the qualities and qualifications managers desire in franchisees.

Qualifications, skills and personality

Franchisees can be a ‘good match' in many ways. First and foremost, applicants may need specific qualifications to become a franchisee. These can vary from degree-level qualifications to industry-specific qualifications and include everything in between. Secondly, franchisees will need particular skills and abilities to make a success of their new business. Finally, different franchises suit different personality types. Not all individuals will integrate seamlessly into an established organisation, and some franchisees can be difficult to work with.

Is there availability in your area?

Very few franchises use their website or online resources to detail which territories are currently available. Also, there aren’t many reliable ways of finding out which franchises are open to new franchisees in your area. Those looking for a new franchise may find that they waste considerable time and effort researching a particular franchise, only to find out that there are no free territories within their geographical reach. Not only is this incredibly frustrating, but it also prevents applicants from investing their valuable resources in preparing their application for a suitable franchise.

What work-life balance can you expect?

When researching the best franchises to own, you’re sure to come across exaggerated and perhaps even wildly inaccurate claims about work-life balance. It may be true that some franchises allow you to reduce your workload and spend more time doing the things you love, but most franchise opportunities require a great deal of dedication and determination – not to mention long hours.

Such claims serve to muddy the waters surrounding better work-life balance claims and make it difficult to assess what kind of personal-professional balance you can expect to strike. One of the only ways you’re likely to find out the truth is by discussing the matter with your franchisor and seeking out the opinions of other franchisees.

What level of profit can you expect?

Establishing an accurate figure for total franchise cost is notoriously tricky. Many franchises quote a minimum investment cost that doesn’t include the price of leasing equipment, paying the franchise fee or raising sufficient working capital to see you through the early stages of franchise development. Other franchises are rightfully wary of making too much financial information public, lest they give away essential details relating to the specifics of their unique franchise model.

Franchise disclosure document

To come to an accurate figure for the total franchise cost, it’s typically necessary to sign a non-disclosure agreement and receive the franchise disclosure document. This document goes into much greater depth than the information that’s readily available online and is created by the franchisor with the express purpose of giving prospective franchisees additional financial and operational information so that they can make an informed choice.

What kind of corporate culture does a franchise support?

Every business develops its own unique company culture, though many will take inspiration from other businesses and organisations. For instance, Google's corporate culture, as well as their emphasis on employee ‘happiness' and a good work-life balance, has had an enormous effect on businesses around the globe. However, though many organisations may try to recreate the Google style, they'll never be able to fully imitate it, as the context in which it is implemented will always be slightly different. Mostly, businesses take certain ideas and adapt them to their specific circumstances.

Talk to existing franchisees

This means that every business develops an individual company culture that may resemble others but is defined by its subtle differences. A franchise may advertise itself as supporting a certain type of corporate culture, but that may not necessarily mean what you think it does, nor that they’ve successfully implemented that type of working culture. With this in mind, you’ll need to perform thorough research if you’re to achieve any meaningful insight into the franchise’s true work culture. This research will include talking to existing and ex-franchisees, discussing the matter with the franchisor and going into the workplace, if possible.

How do you read a franchise agreement?

Finally, the franchise agreement is probably the most critical document in the entire franchise model. It defines the relationship between the franchisor and franchisee and establishes the responsibilities both parties have to one another. However, it's also an incredibly complex document containing a significant amount of legal jargon. This means that franchisees will typically require the services of a legal advisor (preferably a specialist in franchising) to help them understand the details and ensure that they're entering into a fair and non-exploitative contract.

Consider seeking the help of a legal professional

Though some franchisees may feel comfortable signing the agreement without first referring it to a legal advisor, this is potentially disastrous. There's a tremendous amount of franchise-specific legal jargon to contend with, and the regulations surrounding franchising can become incredibly complicated. In the vast majority of cases, it is highly recommended that franchisees seek the assistance of a trained and qualified legal professional.

Conclusion

While online resources are often indispensable when it comes to covering the basics of any given subject, you’ll usually find that in-depth understanding will require you to look elsewhere. Sometimes, organisations don’t want to reveal sensitive information to the public and, on other occasions, the information doesn't exist online. In this article, we’ve tried to explore six different areas of franchising in which there’s likely to be little information available online.

If you’re still on the fence about franchising, to provide more of an idea of what is involved, we now explore eight misconceptions of franchising.

Eight misconceptions of franchising

1. I am guaranteed to succeed.

Whilst franchising has been found to be less risky and more successful than the independent start-up route, this doesn’t mean that you will automatically succeed. Yes, the brand recognition and proven business systems will help massively, but in order ensure the growth and longevity of a business, you need to put in hard work and dedication.

2. It is too expensive.

There are a large range of franchises to suit every budget. For instance, on our franchise network, Clubs Complete requires a total investment less than £10,000. Whereas, £1,000,000 is needed to invest into the global operator of leading workspace providers IWG. After you’ve paid the one-off investment and ongoing royalties, the expenses are generally the same as other businesses. Also, with these additional costs comes the benefit of operating under an established brand and ongoing training and support.

3. It isn’t possible to manage a business that I don’t have experience in.

The beauty of franchising is - yes you can. Many successful franchisees come from backgrounds that don’t relate to their franchise and have used franchising to pursue a career in a completely different sector. They can make the most of a tried and tested business plan, training programmes, ongoing support and marketing materials, and can delegate job roles to individuals with the necessary expertise. There is often flexibility in what sort of franchise owner you want to become.

Let’s say you own a hairdressing franchise. If you don’t have any previous experience, you might choose to take more of an overseeing role and leave the cutting and colouring to the professionals. Or, you might have been a hairdresser for many years and decide that owning your own hairdressing franchise is your next career move. In this case, you might still want to practise your passion and work in one of the salons a couple of days a week. Check out one of our best hair salon franchise opportunities, Rush Hair.

This makes franchising accessible to most people. Some franchise opportunities do require certain qualifications and experience though, so be sure to look out for this when deciding to express interest.

4. I’ve only ever heard of food and retail franchises.

In the past, franchising was dominated by these two industries. This has changed significantly over the recent years. In fact, you’ll find a franchise opportunity in the majority of industries, including home care, fitness and even vending machines.

5. Franchisors care more about the royalties than my success.

If franchisees weren’t successful, the franchise would flop and, therefore, there would be no royalties. It’s in the franchisor’s own interest to do all they can to help their franchisees become as successful as possible. Remember that, if they are unsuccessful, it damages the reputation of the brand and therefore deters potential candidates from applying.