Becoming a business owner | 3 min read
Not everyone has a killer idea or knows the nitty-gritty of how to launch and run a business. That’s why many would-be business owners turn to franchising.
A franchise is in effect a branch of a big national or international company. The branch is yours as franchisee, but the overall business is run by a franchisor who owns the name. For example, most Bakers Delight stores and Hungry Jack’s restaurants are franchises where you can own the local business and pay the franchisor to use their name, systems and products.
Here are five things potential franchisees should know:
1. Do your due diligence
Do your homework and research extensively before committing. The best way to get your information is from the source, says Damian Paull, former chief executive of the Franchise Council of Australia (FCA). “Speak to current and former franchisees and ask them what’s working and what isn’t. Has it met their requirements?” Make sure before making any financial commitment that you seek out and evaluate all disclosure material during the application process and take legal and accounting advice from specialists with franchise experience. It’s a good idea that they belong to appropriate professional organisations such as the FCA.
2. Understand that you’ll need to work
Franchise businesses are usually hands on. Think about what skills you bring to the table. With so many different sectors of franchising it’s good to know what suits your lifestyle, expectations, investment capital and your own set of individual skills or personality. Make sure you assess the lifestyle and income implications of owning and operating a business and the risks versus rewards.
3. Ask yourself the right questions
Do you know who you are? Can you afford to invest? Will you be 100% committed to the work and don’t mind following the rules? Are you looking to invest with a partner or spouse? If so, do you have their support?
4. Consult the experts
Use their experience, knowledge and expertise to provide you the best advice so you can get ahead. Tax experts, lawyers, franchise brokers and financial or banking partners will provide a great foundation for a successful team.
5. Take advantage of the training
Going from earning a wage to owning a business is a huge leap. The advantage of a franchise is there’s someone there to show you the ropes. If you buy a café, but have no experience running one you will be trained in absolutely everything you need to know to run that specific business. Someone will walk you through all the details such as opening up the front door in the morning to employing people and complying with health and safety regulations
Whatever you decide, do your homework on franchising before taking the leap. Visit franchise.org.au to read a range of thought provoking articles and network with as many people who have been involved in franchising as possible. Their advice could be worth its weight in gold.
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