Buying a franchise is exciting (or at least it should be!) Let’s be honest – for many people, it’s also rather daunting. Working for yourself can be a big change, and the opportunity to ‘be your own boss’ can trigger many of the following questions: how can you be sure that you’re making the right decision? How do you pick the franchise that’s right for you? Where do you even start?!
In this blog, Nemo Swimming outlines five factors that you should be considering when evaluating any franchise opportunity.
The market for baby, toddler, and children’s classes is continuing to grow at a phenomenal rate. With this growth, there is a huge choice of activities for parents to pick from. From a franchise point of view, this brings so many exciting opportunities. When looking at these opportunities, it is important to consider whether you could see yourself delivering the type of services that the franchisor has to offer. Find out how that franchisor operates: does this way of working fit with your personality, your preferences, and your requirements?
It’s also important to consider how well you get on with the franchisor. Although you will be working for yourself once you purchase your chosen franchise, you won’t – at least you shouldn’t – be working by yourself. You’re bound to have lots of questions for any potential franchisor, but they should also want to get to know you. The questions that they ask about you will give you a good indication as to whether you will be a valued extension of their brand, or if you will be viewed simply as ‘another franchisee’.
When you start looking at franchise opportunities, you’ll find that the cost of packages varies significantly. For each opportunity you look at, it is helpful to consider what you are – and what you are not – getting. Most franchises involve an upfront cost and then a recurring monthly fee. Some will ask you to start paying the monthly fee straight away, and others will be once you start delivering. Think about how much money you will need to be making to operate profitably after paying this fee. Once you have a figure in mind, work back from there and determine how many hours of delivery this might equate to. Ask yourself, does this fit with your expectations? Also look at how this monthly fee, as well as any upfront cost, is used to drive forward the brand that you are buying in to – a lower monthly fee may mean that less investment is being made in marketing, for example. It’s important that you consider how this will affect you once you start operating.
If you’re buying a franchise, you can expect to be able to tap into the expertise that your chosen franchisor has amassed over the years. With this in mind, it’s worthwhile considering why the business has decided to franchise. It is useful to consider questions such as how long had they been operating before they made this decision? How had their business grown? What did their business look like at the time? This will give you an insight into the franchisor’s ‘business intelligence’, and can be useful when trying to determine what kind of support you can expect once the franchise agreement has been signed. You should also ask what sort of marketing support you could expect to receive; most franchisors will offer support here, but what that support looks like varies significantly. Does the franchisor have a preferred booking system? If so, is this an ‘off the shelf’ system, or has it been designed specifically with their business in mind? Your franchisor should be a fountain of knowledge when it comes to running a business, but you may also have access to a wider support network, such as other franchisees, an in-house marketing team, a training crew, and more. It is crucial to your success as a franchisee to find out what this support network looks like.
‘Return’ is an important consideration for anybody who is starting up their own business: how much money can you, realistically, expect to make, and how quickly? The answer to this question will depend on many factors, including your own drive and determination. Your franchisor should, however, be able to give you some indication as to what you can expect to earn during the first year and beyond. When they give you these indications, look at how they have been calculated, and then consider whether you feel this is feasible for you. As discussed earlier, think about what support the franchisor will deliver to help you hit these figures.
Let’s fast forward, just for a minute. You’ve been running your franchise for a couple of years now. Things are going great. You love the freedom that this opportunity has brought you – but what’s next? Are there options to extend? How can you continue to grow your business, as well as your own skills? Your future as a franchisee is always something to bear in mind when evaluating franchise opportunities. It’s equally important, though, to consider what happens if things don’t go to plan. If you’ve carefully evaluated some of the things we have discussed above, you – hopefully, at least – shouldn’t encounter any huge surprises. However, you might find that, for whatever reason, you’re not enjoying life as a franchisee. It is here that you might consider you other options. Most franchise packages will run, initially, for a period of x years, but there will usually be an option to sell after a specific period of time. It’s probably worthwhile looking at this, just in case.
The route to becoming a franchisee has a lot to take in on the way, but we hope you’ve found this blog useful. Why not check out our list questions to ask when buying a franchise. You can also find out more about Nemo Swimming’s franchise package here.