Buying a franchise is often viewed as a shortcut to owning a business. Traditional ownership means taking absolute responsibility from day one. Small business owners need to develop a viable idea, market new products, and build their brand from scratch. Start-up costs can run into thousands, and there’s no guarantee of success. By contrast, owning a franchise allows you to run a business without running the entire organisation.
A franchise is a business in which an established brand licenses its company’s name, logo, identity, and business model to an individual, who then runs a single branch of that business on behalf of both parties. For the franchisor, the original or current business owner, this is a method of expansion. For the franchisee, the independent entrepreneur, buying into a franchise provides the opportunity to start your own company and trade as a recognisable brand with existing philosophy.
A franchise opportunity arises when a business is open to such a deal. It may aim to expand, but instead of buying a new location and advertising for new staff, it promotes the quicker and more cost-effective franchising option. Potential franchisees may be subject to sales targets and other restrictions.
At first glance, a franchise opportunity may sound fail-safe. You’re buying into an accomplished brand so that you can tap into their years of experience. However, there’s still a huge amount to consider when determining if a franchise business opportunity is worth taking up. The initial investment may be high, and franchise ownership can easily fail without the necessary research.
Firstly, research the customer base of the brand you’re interested in. How old is your average consumer? What’s their financial status? What are their hobbies and interests? Which geographical locations do they hail from?
Secondly, research the area in which you’re thinking of opening the franchise. Does it contain a high enough proportion of the brand’s most common demographic? Is there enough genuine demand for such a franchise business in your desired location?
Such research will enable you to determine whether your business opportunity is viable or not. After all, there’s no point investing in a fitness franchise if you live in an area with a predominantly inactive elderly population.
Even though a franchise agreement does not operate as a 50-50 profit split, you should treat your potential franchisor like you would any other business partner. Exercise due diligence by examining its history, successes, failures, and the types of business costs involved. Even if their financial statement looks great, are you confident that this is a high-quality brand you’ll be happy to dedicate your life to? What will your working relationship with the brand look like?
Every brand has initial investment requirements. A company will carry out thorough checks on any potential franchisees. Your current financial situation and credit history will need to be made crystal clear.
Ensure the agreed deal between you and your future brand is straightforward and settled before commencing business operations. Remember, franchise owners should be looking to run a business, not merely manage a branch.
You’ll want independence, of course, but excellent support is essential when it comes to growing a franchise. Does the brand offer a good training program? If support is required in the future, will there be a contact on hand to answer questions through webinars or face-to-face?
It’s worth contacting current franchisees before making any financial commitment to ascertain how a partnership would work in practice.
Your initial investment will usually come with a minimum timescale attached. This could extend anywhere from a few years to over a decade. Are you committed to living in this location for the specified amount of time? How will the economic landscape look in ten years? Franchise owners need to consider whether their business will still be viable in the future.
There are many advantages to opening a franchise in the UK. The nation has many franchising opportunities available, from real estate to the automotive industry and beyond. And it’s very tempting for potential franchisees to open a business using an already successful brand name and business model.
For business owners, there are also advantages to franchising within the UK. The capital you invest in developing your franchise company is often significantly less than the start-up cost of another company location. So you can see your business grow without the risk of debt. You’ll be leasing your brand to someone with a material investment in your success; their compensation is the operation’s profit and an entrepreneurial spirit, with the motivation to be their own boss and make vast sums of money. All of this benefits your business.
There are often fewer financial restrictions within the UK when it comes to franchising. Banks are more likely to grant loans and other financial assistance to a franchisee than a start-up. An established brand carries less risk than a brand new business.
If becoming a franchisee is a shortcut to business ownership, franchising your own business is a shortcut to expansion. There are several critical considerations to make before you sign any deals with prospective franchisees, however. Remember that your brand’s hard-earned reputation is at stake, and it’s crucial to examine the risks involved as well as weighing up potential profitability.
Your brand’s culture and philosophy may be evident to you, but it will need spelling out clearly for franchisees. Create an in-depth document that all potential partners can read and seek feedback proactively. This should include your overall philosophy, the systems you use, and how you run your business from day today.
Ensure that your franchise agreement is legally bound. The financial arrangement between you and your potential franchisees should be conducted with due diligence. If the future workings of your agreement are unclear, it will likely put off potential partners from investing. It should be clear to both franchisor and franchisee how both parties will benefit from any deal. Be sure to trademark your brand and logo.
Given the savings that can be made from franchising your business, it may be tempting to take up multiple opportunities simultaneously. But, it’s far less risky to open just one franchise first and use this as a test for the future.
This will enable you to identify how easy your procedural document is to follow, whether your training program is up to scratch, and if more support is needed for prospective franchisees.
As a franchisor, there will likely be many surprises along the way you can learn from. Give your first franchised branch at least 12 months before you expand further. That way, you’ll be able to look after your mental wellbeing, and the experience gained will be vital to any future success.
People’s lives were hit hard by the pandemic in 2020, but no industry has felt it more than retail. It’s worth looking back to 2019 reports when assessing profitability. Perhaps unsurprisingly, big-hitters such as McDonald’s, SPAR and KFC made the most significant returns.
The biggest brands also come with the biggest initial investment costs, often running into several hundred thousand pounds. Yet investments in certain franchises can be made with a few hundred pounds, making them far better business ventures for most of us.
We’ve found that opportunities abound within the care, home cleaning, fast-casual restaurants and pet services industries. Within the small business and growing franchise sector, there’s often a very insignificant franchise fee required to get started, and you can be the boss of a low-cost franchise before you know it.
Here are 50 of the best franchise opportunities available now, with initial investment requirements to match all interests and all budgets.
From deciding on a business sector to embarking on negotiations, make sure you contemplate the following before committing to any franchise deal:
You wouldn’t start a brand new business in an industry in which you haven’t got any interest, so take the same approach when investing in a new franchise. It’s hard to be motivated if you’re working in a sector that doesn’t inspire you. It’s worth looking at your previous experience and seeing how capable you would feel working in different fields.
Consider any restrictions a particular franchise industry will have on your personal life too. Will it require you to have a home office and work remotely? Will you feel comfortable communicating with your target demographic every day? Are you up to the demands of the industry that you’ve chosen?
Don’t involve yourself in a franchise opportunity purely because you like a specific brand and they’ve already proven themselves to be successful. Draw up a shortlist of potential businesses and research their terms in minute detail. If you can’t align with their working methods, there’s no point in pursuing the opportunity further.
Equal attention should be given to your proposed geographical location. Even a world-established, multi-millionaire brand needs to open its branches in areas where there’s a genuine, long-term need for its products and services.
Once you’ve entered into discussions with a potential company, you’ll be able to gain access to their Franchise Disclosure Document (FDD). There are no laws in the UK that state every company should have one, but it’s a sure sign to be wary of if they don’t. Such a document will contain the legal information you require, including fees and the company’s franchise history.
It’s worth covering your back by getting a qualified legal expert to check over the intricacies of such a document. Even if you have years of experience in business, every Financial Disclosure Document is likely to have its own quirks. Potential franchise owners need to understand every facet of the FDD. This document will be the legal foundation that your entire franchise partnership will be based upon.
Not every company will allow for negotiation regarding terms, conditions, and finances, but some will. If you’ve scoured a particular franchise deal and there are one or two sticking points, you’re entirely within your rights to attempt negotiation. Generally, changes to a franchise agreement can occur when the legal rights of the franchisee are less clear than they should be. A franchise is a massive personal and financial commitment – don’t gloss over the details.
If you’ve already done the above and are close to securing the deal, don’t worry about walking away if something doesn’t feel right. Remember the reasons you’ve considered becoming a franchisee and your own boss in the first place – you’re looking to own a business on your terms. If just one of the conditions or procedures on offer doesn’t fit your needs, it’s better to abandon the deal and look for better opportunities elsewhere.
Whether you’re a potential franchisee or franchisor, it’s crucial to invest in your new business with a phone system that encompasses the features to make your life easier. If you want to check in on your franchisee across the globe or seek support from your franchisor, RingCentral offers the functionality to connect you from anywhere, any time. Find out how to make your business phones work smarter with RingCentral by adopting the only communications platform you’ll ever need.
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