Is franchising for me?
By Cathryn A Hayes, Head of Franchising, HSBC Bank plc
Running your own business may be a long cherished dream, but it can be a frightening step to take. However, there is no doubt that going into business as a franchisee of a well established, proven business format franchise will give you the best possible start.
Of course, there is a lot of work to do before you will be ready to part with any money, you will need to research your chosen franchise, making sure that it is the right one for you and that you are fully aware of what is involved.
So how do you check out a franchise - here are HSBC’s Top Ten Tips:
1. Find out what franchises are available – there are franchise websites, exhibitions, directories, magazines, all devoted to franchising and starting a business. Start by contacting the British Franchise Association (01865 379892 or www.thebfa.org)
2. Take as much advice as possible - advice on choosing a franchise is available from the British Franchise Association, banks, lawyers, accountants and from various franchise publications.
3. Examine your strengths and weaknesses – what skills and weaknesses do you have? Does the franchisor provide training and back-up to help you overcome any weaknesses?
4. Check the franchise is right for you – is the business one you can see yourself running?
5. Talk to existing franchisees – what problems did they have, how successful are they?
6. Investigate the franchisor - it is important that the franchisor has the financial resources to support a franchise network.
7. Examine the market place - is there a market for your chosen franchise’s goods/services? Is the franchise operating in a market subject to fashion?
8. Take care with new franchises – has the franchise been piloted, how long has the franchisor been in business.
9. Check the legal agreement - have the franchise agreement vetted by a franchise specialist solicitor.
10. Take your time - taking up a franchise is likely to be one of the most important decisions in your life and the life of your family. However enthusiastic you are, don’t be rushed, and do your homework.
Remember all business involves risk, including franchising. However, there is no doubt that going into business as a franchisee of a well established, proven business format franchise will give you the best possible start.
As you can see from this brief article, starting your own franchise will involve you in a great deal of planning and research. HSBC’s Starting a Franchise Guide will help you to work through this vital stage.
Free copies are available to download from www.hsbc.co.uk or contact HSBC’s franchise team at franchiseunit@hsbc.com.
