How to know if a franchise is likely to work

badgerbread

I have been looking at franchises in a bid to start working for myself. I have come across one that really looks Interesting. I just need to know what sort of questions do I need to ask it is going to be very scary being self employed but I really want to try and can't afford to fail. If anyone can guide me in the research I should be doing I would really appreciate it.

mcfisco

I'd certainly want to meet with and speak to other franchisees before I did any other analysis

Pennywise

Check it out yourself, talk to other franchisees, get the proposal reviewed by an accountant and solicitor.

Most importantly, take everything said and written by the franchisor with a pinch of salt.

There are plenty of reputable franchises which are worth the money and provide you with good backup, marketing, support, etc.

However, there are also people, verging on being conmen, who promise the earth, deliver virtually nothing, and then you find you're stitched up by the contract.

You have to go into it with your eyes wide open, take nothing for granted, make no assumptions.

Make sure that you know for certain, exactly what the contract requires you to do and pay, and what the contract requires your franchisor firm to provide you with, not to mention, what the contract says about either party failing to honour their commitments.

foxwales

You are not buying a ready made business, what you buy in a franchise is the strength of the brand.

Questions you need to ask/look into

1) How strong is the brand? is it well known? what kind of market share does it have?

2) How strong is/are the product(s), are they unique? do they have unique selling strenghts? how saturated is the market with these products? whats the competition like?

A franchise is only worth getting into if it has an established strong brand, e.g. Mc Donalds, Pizza Hut, Dominos are just some examples.

If it's Baz's Mobile Car Wash, then walk away and establish your own business with a similar model and brand without the cost of the initial franchise.

Tread carefully. Do your research, then do it again. Don't allow yourself to be caught up in the sale patter, as ultimately they are trying to sell you a product (the franchise) and they have no real invested interest in your personal success.

harrys_dad

How much are you going to have to invest? What sort or ongoing costs will there be? How much marketing support? Do you have guaranteed income? Over 300,000 people have gone self employed in the last two years, many of them are now penniless, it is not a good time to start a business, just look how many empty shops there are.

ILW

badgerbread wrote: »

I have been looking at franchises in a bid to start working for myself. I have come across one that really looks Interesting. I just need to know what sort of questions do I need to ask it is going to be very scary being self employed but I really want to try and can't afford to fail. If anyone can guide me in the research I should be doing I would really appreciate it.

If you truly cannot afford to fail, self employment (even via franchise) is not for you. It always carries some risk.

Savvy_Sue

Pennywise wrote: »

Check it out yourself, talk to other franchisees, get the proposal reviewed by an accountant and solicitor.

<snip>

Make sure that you know for certain, exactly what the contract requires you to do and pay, and what the contract requires your franchisor firm to provide you with, not to mention, what the contract says about either party failing to honour their commitments.

linking that first and last sentence. Do not say "I cannot afford to pay a solicitor to look at this" - you cannot afford NOT to do so!