Columnist

So, you’re thinking of buying a franchise?

Getting a business off the ground is a difficult process, as anyone who has tried to do such a thing will tell you. In fact, finding any kind of employment is pretty hard so it’s no wonder that a lot of people give up on their job search and try and find out how to go self-employed or even to own a franchise.

A lot of people take this stance because they feel as though they want to be in charge of their own destiny, showcasing their managerial skills and heading up a team of people and taking the company forward. Others have just had negative experiences of being employed in the past where they felt that they had no opportunities to progress or to let their skills shine through because the firm would rather hire experienced managers than to promote from within.

Employed versus self-employed

Of course, going self-employed has its own pros and cons, and there are definitely benefits for those who believe in their brand, their product or service, and those who are able to make it through the tricky first year. If you can do that then your chances of surviving as a business in the long-term, but sometimes you might not have your own idea - you just know that you want to be your own boss in some way, shape or form.

Whatever your stance on the employed versus self-employment argument might be, there is another option available that people often don’t think about because they have no idea of how to go about it. You might not be able to open up a franchise from the moment that you finish your education, but you do have the opportunity to buy one and to run it on behalf of the overall owners.

For instance, it’s possible to take your skills and passion for running your own business - plus the essential financial backing that you would need to be a business owner - and to buy a McDonalds franchise with the help of some experienced agents; and know that you’re not only in charge of the company as a whole, but that you would also have the backing of the existing company owners who would be able to support you.

The agents that are there to help you with the purchase of your franchise can provide some amazing insights into the world of business management, with more than 560,000 people currently working in the various franchise opportunities in the UK alone.

How does owning a franchise differ?

One of the most common questions that comes up when people talk about owning a franchise, of any size not just a name like McDonalds, is how it would differ to an “ordinary” business.

As this article by Startups.co.uk states, it’s something of “a hybrid” in terms of running your own business and still being employed, so in many cases it might actually be more appealing than going out on your own from the off, enabling you to gain experience in business management without having to learn as you go.

From a financial perspective, owning a franchise is a much better option for you than running your own business, mostly because there are less things to drain your company account. As a typical self-employed business owner you have things like business rates, equipment and staffing to concern yourself with; whereas a franchise owner would have a lot of these issues taken care of by the overall management team.

The support offered is also much better for those owning a franchise. When you throw open your own company doors for the first time it can be like going off to University for the first time, trying to learn about your new surroundings with nobody else around and a lot of similar people looking at you and wondering who you are and what you’re going to do when all you want is a little bit of support.

With a franchise, you get that support from the general management team who will be in regular contact not just to ensure that you’re running the company the right way and not hemorrhaging money, but to make sure that you have all of the help you need. The franchises will also provide you with all of the essential training that you need in order to feel confident in your own ability to run the company from the first time you walk in, topping up your skills as you progress.

The other side of the coin

Of course, the one slight flaw to owning a franchise instead of your own company is that the owners would take a percentage of the overall profits and they would ask you to keep paying for the license to run the business.

Yes, you would be taking a significant chunk of the money as the manager, but when you’re your own outright boss it’s down to you how much of a bonus and salary you take and how much goes in the company account.

Top tips for potential franchise owners

Now ordinarily, people would give you a list of things to do that will make owning a franchise a guaranteed success but the fact is that you never really know how you’re going to get on until you speak to the agency, the company itself and your bank.

They are the ones who have to put their faith in you, and while this guide from HSBC provides some very useful tips indeed for anyone considering owning a franchise, the best way of learning is by putting it into practice.

You could even make an appointment to go and see the manager of a similar franchise in your region to get their own opinion, finding out first-hand the challenges that lie ahead and then, if you’re still up for it, you already have a starting point to learn from.

The key is to do your research, to prepare yourself as best you can, and to have a solid business background to enable yourself to hit the ground runnings. The franchises will already have something of a cult following, and they’ll be expecting you to look and feel like an established location from the moment you open your doors on day one.

This was posted in Bdaily's Members' News section by Chris White .