by Shaheen Darr

Created on: June 17, 2008   Last Updated: June 19, 2008

The key word in 2008 is caution, there have been many lessons that have been learnt over the past few years that have made economies around the world tighten their financial belts. The credit crunch has affected each one of us in some way or another and even though it spells bad news for homeowners we have all realised the value of looking after our money sensibly.

For people who want to invest in a business, franchising has never been more attractive because of the variety of business ideas it offers to everyone. There is also the added security of having advice and back up should the the need arise. There are benefits like volume discounts which are passed on by the franchisor to the franchisee and in addition franchising also provides a safe and risk free business option than trying to cope alone with both competition and risky economic factors looming in the background.

Franchises have proven success in selling different products and services, but for the first time franchisee the key is to choose a product or service that interests you and that you are familiar with. The training provided to market this product will then be more enjoyable and worthwhile rather than experimenting in a totally new field that does not hold your interest for long. There are magazines, websites and exhibitions that give you all the advice and information that you might need to help you make your decision.

Do your financial homework before taking the plunge. Most franchises need a start up fee which varies depending on how popular the brand name is or how long the franchise has been in the market. Work out your outgoings and remember to include the repayments you will need to pay to your loan provider if you are borrowing the money for the initial franchise fee. Write out a business plan so you have an idea what the business income and expenses will be and how long it will take before you will actually start making a profit.

Read the terms and conditions of your contract before you sign anything and check to see if there are any clauses that might restrict the running of your business and your chances of selling it on in case you do not want to continue running it in the future.

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