by Sharona B

Created on: July 02, 2008   Last Updated: July 05, 2008

Have you considered starting your own business? Perhaps you have plenty of entrepreneurial spirit but feel a bit overwhelmed by the enormity of starting something from scratch? If this is the case then franchising may be for you.

Buying into a franchise gives you a legal license to trade as part of an established business. Your contract gives you the right to sell the goods or services of an established business and to take advantage of in-house resources and support, eg. marketing plans, management guidance and training.

For many a franchise is the middle ground' between owning your own business and being employed. It might be just the opportunity you need to make the most of your business acumen and to grow something of your own. Before jumping in with both feet and commencing what is, after all, a risky business, consider carefully whether this is the right move for you.

Before Buying a Franchise:

1. Do your research. Find a franchise that is right for you; one that fits in with your passions and skills. Your best bet is to find a franchise in an industry you know something about.

2. Seek out other franchises in the same sector. Ask if they would be willing to give you some advice. Find out how their businesses are doing, their relationship with their franchiser and any other information they can give you based on their experiences.

3. Get as much information as you can about potential franchisers what reputations do they have? You need to ensure your future franchiser is professional, responsive and operates with integrity.

Financial Considerations:

4. Once you have identified a preferred franchiser, do a background check on them. Don't leave anything to chance. It is best to get legal advice to determine their financial viability and also to review the franchise agreement terms and conditions and the Uniform Franchise Offering Circular which they are obliged to release.

5. Look up their track record, have most of their franchisees been successful?
Research Your Franchise:

6. Conduct research to find out if there is a demand for the service and/or products you want to sell.

7. You should be provided with the names and addresses of their franchisees. Speak to a sample of them before you sign the contract and ask about their experiences.

8. Find out about training and support. One of the benefits of having a franchise is that you have a range of services available to support you. Find out how, when and where the training takes place and what materials you are provided with. Training is a crucial part of your success so be sure to investigate this to determine whether or not it is adequate.
Funding Your Franchise:

9. The start-up costs for a franchise can be quite high. Make sure you are aware of all the costs, which may include land, building, advertising, insurance, equipment and stock. You will need to identify funding to cover these initial costs.

10. It may take time to establish your franchise. Have realistic expectations and budget for a period of gradual growth. Do not expect to be an overnight sensation.

Opening a franchise gives you the advantage of trading under a recognized and trusted name. You will have an immediate client base, a market-tested product or service and a range of support from the franchise.

Starting a franchise is a big undertaking and needs to be entered into with care. However, if you take advantage of the support available to you and are prepared to work hard, you have every chance of building a successful business.

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