Buying into a franchise

Over the last few years the number of women who have taken the franchise route into self-employment has increased and now just under one third of franchisees in the UK are women.

Mum of three Sarah Godwin set up Hartbeeps, the music franchise for babies, and shares with us the advantages of running your own franchise business:

Franchising is the granting of a license by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark or trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.

The principle is simple; some companies choose to grow, not by developing in the conventional way, but by granting a license to others to sell their product or service.

Advantages

There are clear advantages to being a franchisee:

  • You don’t have to come up with a new idea; someone else has had it and tested it, too!
  • Larger, well-established franchise operations will often have national advertising campaigns and a solid trading name
  • Good franchisors will offer comprehensive training programmes in sales and indeed all business skills.
  • Good franchisors can also help secure funding for your investment as well as e.g. discounted bulk-buy supplies for outlets when you are in operation

Being a mum and working for yourself enables a degree of flexibility and is a really attractive proposition. Buying into a ready-made business offering a tried and tested business model and a support network can also help you make the leap into the world of self-employment.

Not for the faint-hearted

However working for yourself is certainly not for the faint hearted. I recently heard a business owner say ‘if running your own business was easy everyone would be doing it’. From my own experience, aside from having to be a ‘jack of all trades’, fast tracking all sorts of newly acquired skills from IT to cold calling, you need to be able to brush yourself down and learn from the lows and indulge yourself richly in the highs.

Setting up your business franchise takes guts, hard work, get up and go and the ability to multi-task; on the plus side being a mum provides good grounding in all these skills!

You also need to be able to keep the end result in mind. What are your objectives? Why have you gone into business for yourself? What is your dream goal? Write them down and keep them on view over your computer – these will help keep you on track during some of those lows!

Buying into a proven business via the franchise route will require an initial capital investment and the amount will depend on the type of business you wish to buy. This outlay can range from a few thousand pounds to hundreds of thousands of pounds; the latter bracket would usually involve a fixed business premises, stock and staffing.

In recent years low-cost start-up franchise businesses are more widely available, but remember that it will still require a large investment of your time, as your new business will likely take from one to three years to see a return on your outlay. This is where the visioning is helpful, along with practical, realistic budgeting.

Things to consider

  • Choosing the right franchise is essential, you will need to have a real interest in the product or service you’ll be selling.
  • Some business skills will be taught and supported by the franchisor, but past experience in sales and marketing, business planning, book-keeping, IT, PR or admin would be of great use to you as you take the first few steps into becoming your own boss.
  • Do your research; contact other franchisees within the network, ask them what support is there and are they succeeding? You can also speak to the franchise units within banks for free information along with online support geared towards female franchising.
  • Conduct your own market research by looking at companies already working in the same line of work in your area, much of this can be done online. Don’t forget the social networking element such as Facebook and Twitter which will give you valuable real time information.
  • You may not earn a regular salary in the beginning, so budget for this and also allow yourself a contingency budget in the case of unforeseeable expenses.
  • Remember that a percentage of your earnings will be payable in the form of regular royalty fees to the franchisor in return for support in operations and advertising.

Legal Agreements

Before you buy a franchise the legal agreement and operations manual should be provided to you in tandem and both documents will cross refer, so pay good attention to detail. A franchise agreement is designed to protect the franchisor and their intellectual property, but should also offer you fair terms. A decent longevity such as 5 to 10 years before contracts are re-negotiated for example. Also look for additional costs that may be built into the agreement such as annual advertising costs, and pay particular attention to sales targets; are they achievable?

My testimonial

From my own point of view as a franchisor, running my own business takes hard work, total professionalism, sometimes real stress, sleepless nights, extensive working hours and life-long learning. However the rewards far out way all the hard work; I do something I’m passionate about every day, work with like-minded people and deliver a worthwhile product to my most important customers. I get to see every school play too!

Sarah is a mum of three. Her first career was nursing, a sharp gear change took her into the corporate world of music and events but when this didn’t fit in around her family she took the plunge and started her own business. Life is easier now all her children are at school and she organises her timetable around the school day – the rest is managed by trial and error.

For more information visit:

The British Franchise Association

 

 

Image courtesy of franky242 at FreeDigitalPhotos.net

 

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