Well over half a million people in the UK work in the franchising industry - circa 620,000 - and, in 2021, an astonishing 97% of franchisees turned a profit. Consequently, the number of people employed in the industry is expected to swell even further over the coming months.
If you're weighing up whether or not becoming a franchisee is the right move for you, it's important to remember that there's a lot more to becoming successful than just identifying an opportunity you like the look of and handing over your money. Here are a few things to consider before you take the plunge.
Make sure you can afford it
Different franchises have different costs but whatever franchise you're considering, you'll need enough money to cover both start-up and ongoing costs.
Before you begin trading, you'll need to pay an up-front franchise fee to the franchisor for the right to use its brand name, logo and business plan. It also usually covers training, support and marketing.
The average cost of buying a franchise in the UK is £15,000 but that figure varies enormously depending on the nature of the business. The start up cost for a home-based franchise, for example, will be much cheaper than for one that requires premises, specialist equipment and furniture.
An ongoing fee will almost certainly be payable too, such as a management or royalty fee to continue trading under the franchisor's brand. This will either be a fixed monthly fee or a percentage of your profits. You may also be expected to make regular contributions for ongoing promotion and marketing activity and, if you're required to sell the franchisor's products, you will also need to buy inventory.
Depending on the nature of the franchise, you may also need enough working capital to pay suppliers, staff, rent, insurance and utilities - as well as your own cost of living - in the interim before your business becomes profitable.
Be passionate about your business
This may seem obvious but if you're not really interested in the industry in which your chosen franchise specialises, walk away. Not only will your customers and clients quickly pick up on your lack of enthusiasm, resulting in reputational damage to your business, but you're also more likely to lose interest in it in the long-term, which could conceivably end up costing you a lot of money.
On the flip side, if you invest in a franchise you're truly interested in, your energy and passion for it will naturally come through, resulting in you offering a better product or service to your customers.
While the predicted earnings and the work/life balance being offered by your chosen franchise are important factors to take into account, if they're the only things that interest you about it, it's time to think again.
Do your due diligence
The only way to ascertain your new business' chances of success is to get out in the area in which you want to operate and do some market research. Does the local community have the right demographics for your business? Is it crying out for whatever you have to offer? Or are there already too many businesses offering the same services in the area?
At this stage, being thorough and patient is vital, so resist the temptation to sign on the dotted line until you can answer these questions and more. The more time you invest before you buy a franchise, the better your return on investment is likely to be.
Customer service is vital
When you launch your new business, you ideally want it to gain a good reputation, fast. However, in the age of social media and online reviews, poor feedback from customers can quickly break a business, so you need to remain friendly, knowledgeable and professional at all times (the same goes for any employees).
If you can achieve this, not only will your customers keep coming back, improving your customer retention rates, it will also increase the chances of them singing your praises to their friends and colleagues. There's nothing better than free publicity, especially when it's positive!
Marketing and advertising are vital too!
Speaking of publicity, you'll need to spread the word about your new business before it launches - to build interest - and once it has launched, to ensure people know that you're there and what you have to offer.
Establishing a social media presence on Facebook, Twitter and Instagram are all advisable but putting up posters, making and delivering flyers and advertising in local newspapers are all effective ways of promoting your franchise too, especially if it isn't already a household name.
Cafe2U franchises are available
Not only are they available, they're one of the best franchise options for 2022. In addition to a Mercedes-Benz Vito premium van and an exclusive area in which to operate, all our new franchisees receive all the training and equipment necessary to get their businesses off the ground. We also supply them with all the ongoing support and marketing advice they need too.
If you're interested in investing in a Cafe2U franchise, we can assist in arranging finance for you and your personal investment can be as little as £15,000. For more information, click here.