We asked Vera Valasis, FASA’s Executive Director to give some tips to aspiring franchisors/franchisees – and this is what she advises…
- Not every single business concept or idea is franchisable.
- Don’t franchise your business unless you have a good financial track record of the performance of the business in a number of different locations and markets i.e. locations in a high street, a shopping mall, in a city and rural applications.
- Test the business with a few franchisees in the early stages that are willing to be ‘test sites’ in order to hone and fine-tune every aspect of the business model.
- Don’t franchise your business unless you have the financial independence to support franchised outlets adequately especially in terms of marketing.Preview (opens in a new window)
- Do not invest in a franchise unless it is an accredited franchisor (if things go wrong as they sometimes do, you are ‘on your own’).
- Do your market research very thoroughly – meet with existing franchisees and learn what they have experienced in respect of promises made by the franchisors, marketing, guidance, training and support and most importantly ask them if they would buy another business from the franchisor.
What do you think are the main benefits of being involved in a franchise as opposed to running your own business?
Franchisors are expected to provide franchisees with:
- Support – starting with selecting the right franchisee for the business, site selection, staff selection and training, establishing the business, marketing, lease negotiations, financial controls and management, HR issues, supply and price input – the list goes on.
- Having a Big Brother – There is no comparison being on your own in your own business especially if you are a new or inexperienced business owner as you have access to none of the above services franchisors usually offer. In some cases it may also be easier to secure funding for a franchise than one’s own business.
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