Happy customers the key for oven cleaning franchise

Consider the following before investing in a franchise, industry veteran Nigel Toplis says

In order to assess a franchisor, it is first necessary to understand the essence of a franchise.

Franchising is neither an industry in its own right nor even a business. It is, though, one of the fastest growing and most consistently successful methods for distributing products and services. It’s a crazy mixture of conformity and individuality that combines the best elements of big business and small operations.

Complying with the system
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To be successful, a franchisee must comply with the franchise system - such compliance will enable the franchisee to achieve a greater level of fulfillment.

The 2012 NatWest/British Franchise Association survey highlighted the following:

* Market turnover in excess of £13.4 billion.

* Over 590,000 people employed (more than the armed forces).

* Approximately 40,000 non-dairy franchise units in the UK.

* 929 active franchise systems.

There is no template for being a successful franchisee, except perhaps:

* A willingness and propensity to work hard.

* The ability to follow and adopt the franchisor’s system.

* A desire to succeed.

In franchising, prosperity comes from the successful marriage of franchisor and franchisee. The phrase ‘in business for yourself, not by yourself’ captures the essence of franchising. If you open your own business, you are responsible for everything, whereas with a franchise the franchisor offers experience, know-how, proven operation methods, marketing tools, sales training and technical guidance, as well as a corporate identity, trademarks and the all-important brand.

When selecting the right franchise, there are six steps you should go through:

* Suitability.

* Investment level.

* The industry.

* The franchisor.

* Professional advice - legal/financial.

* Making the decision.

All six steps are important, but in this article we are looking specifically at assessing the franchisor.

A good franchise should have the following attributes:

A proven business history
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Ensure the franchisor has been successfully trading for at least two years. Ask to see evidence of its trading history and its annual accounts. Also, meet with other franchisees and get their opinion of the success of the franchise.

10 key questions to ask franchisees:

* Are you making money?

* Are you working long hours?

* Do you get on with the other franchisees?

* Has the business affected your family life?

* Does the franchisor offer good support?

* Are you lonely?

* Do you enjoy the business?

* Is the business giving you what you expected when you first came on board?

* Is your family still supportive?

* If you knew what you know now, would you still have joined the franchise?

Well documented systems
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A franchisor should have its business system documented in a manual or manuals. Ask to see the manual before you sign the franchise agreement and be comfortable that the systems are well thought out, professionally presented and easy for you to understand and follow.

Effective training
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A franchisor should provide you with training in all aspects of the business system, including but not limited to sales, marketing, operations and finance. Ask to see a copy of the training programme for new franchisees.

Security of tenure
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Make sure the franchisor actually owns the franchise or at least has the rights to operate it. It is not unusual for a franchisor to run the business under a master licence agreement from another country.

Ongoing support structure
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This is critical and while it is true that you are buying into a brand and business system, you are also buying into the franchisor’s intellect, know-how and support. You need to be clear it has this support structure in place.

British Franchise Association membership
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The bfa vigorously checks franchisors before allowing them to become members. While non-members are not necessarily poor franchisors, bfa membership gives you added peace of mind.

You can answer a number of questions about a franchisor by doing diligent desk research. Consult with the bfa, Companies House and franchise magazines, and ask the following questions:

* Are there other franchisors in the industry? If not, why not?

* Is your preferred franchisor the largest operator?

* Is it an insignificant newcomer, but with a brilliant new slant?

* Does it offer the best package to you as a customer?

* How often does a consumer buy the product or service?

* Do the products or services attract repeat business?

* What is the typical value of a sale and the typical profit? How many customers would you need to meet your minimum business projections?

* Does the franchisor seem profitable?

* Does this franchisor offer the best potential for growth?

However, there is nothing better than meeting with the franchisor face to face and asking about:

* Profitability - ask for two-three years’ reports and accounts.

* Knowledge - question it about the market and market trends.

* Success - how long has it been in business and how successful has the company been?

* Vision - is it a serious player or full of platitudes?

* Support - ask to see detailed support plans. Examine the company’s organisation chart and note improvements made to the systems (or not). Are you forced to buy company product? Does it have the manpower and intellect in each key business area?

In addition, get a copy of the franchise agreement. The franchisor won’t change the document to suit you, but you need to be aware of its contents.

So, in summary, look for a franchise where the franchisor has a proven history, good systems, effective training and bfa membership, that it’s a business you think you may be interested in, that you have some or most of the skills required, the investment required is within your compass and the industry meets your specification in that it’s large, growing and sustainable.