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Choosing The One

This article appeared in Issue 2#2 (Jan/Feb 2008)

of Business Franchise Australia & New Zealand

With so many franchises to choose from, how do you go about selecting the right one? John Bignell from The Mortgage Gallery shares his insight.

Choosing a franchise can be a tough decision, but doing your homework and looking carefully at what a potential business has to offer will help you identify which industry sector and business model best suits you.

Remember when you buy a franchise you’re entering into a long-term partnership so it’s essential that you have a full understanding of what the business involves. Preparation is key to making an informed decision, so don’t hesitate to draw up a checklist for your prospective franchisor, and don’t be afraid to ask tough questions.

Here are some factors to consider as you explore your options:

Network
Always make sure you speak with existing franchisees to find out what their experiences have been like with the franchisor. You’ll get a true grassroots feel for the business you’re thinking about investing in, which is invaluable. Good franchisors should allow free access to their franchisee network.

Training and support
It’s essential you find a franchisor that’s committed to your business’ growth by providing long-term training at low, or zero costs. It’s also important to be sure your franchisor has the resources to support the development of your business – from assistance with business planning to recommendations on suppliers for marketing assistance.

Point of difference
Whatever the industry sector, make sure that you can see and believe in a unique selling point for the product or service you’ll be involved in offering. It may be the brand, service guarantee, cutting edge technology or the product or service itself. If you can’t clearly see what this business has that its competitors don’t, the chances are that nor will prospective clients.

Financial
It’s important you ensure the financial viability of the franchise operation you’re considering. Quality franchisors will have their business audited regularly by professional auditing firms; ask your franchisor for copies of an audit statement as part of your assessment.

Vision
Finding a franchisor that shares your vision and commitment is the foundation to building a successful partnership. Knowing your franchisor shares your goals will be a big plus when you’re building your business and will give you confidence that support is there if needed.

A fair agreement
Make sure that your agreement is a balanced document that protects both you and the franchisor’s rights. To avoid any muddy litigation pitfalls, make sure you consult a legal adviser before committing a franchising contract.

THE BOTTOM LINE

Now that you’ve established what to look for in your franchise, it’s time to ask yourself the all important question: What do you hope to achieve from your business?
Set yourself objectives and consider these goals:

Increased profits – As with any other business operation, your bottom line can contribute greatly to your franchise’s success. Make an effort to set profit targets for each fiscal year to achieve your financial goals!

Expansion – Why stop at one franchise if your business is growing in leaps and bounds? Don’t set limits on your business goals, but explore avenues for future expansion opportunities.

Better lifestyle – Being your own boss is a key advantage of running your franchise. Make the most of it by striking the right balance between juggling your work commitments and practicing a better lifestyle!

THE DOS AND DON’TS OF BUYING A FRANCHISE

DO LOOK FOR

Commitment to quality products and services – Look for a franchisor that is committed to supporting your business with high-grade products and services.

A recognisable brand – A well-known and trusted brand is a fantastic way to maximise the exposure and recognition of your franchise.

A proven system of success – If your franchisor has a proven track-record of thriving franchisees, it’s likely that the company has a well-grounded business model that can help form the cornerstone of your business’ success.

DON’T FALL FOR

Hollow advertising – Glitzy web banners or glossy print advertisements do not necessarily reflect the success of a franchisor – remember to do your own research before committing to the purchase.

Unwritten promises – It’s easy for a franchisor to promise bountiful returns on your investment, but make sure any promised support is included in your contract to protect yourself from false claims.

John Bignell is managing director of The Mortgage Gallery – Australia’s fastest growing financial services franchise, according to BRW magazine. For more information on mortgage broking franchising contact John on 08 9440 1999 or visit www.themortgagegallery.com.au