Business Franchise Australia


Bob’s Business Tips for Potential Franchisees

Bob Beaumont | Managing Director | Beaumont TilesThis article appears in the Sep/Oct 2016 issue of Business Franchise Australia & New Zealand

Finding the right business to invest in is a challenge in itself but when it comes to making the final commitment, the more hurdles could prove the better choice.

About half the Beaumont Tiles’ 108 stores are franchises and both parties – the franchisor and the potential franchisee – should undertake plenty of due diligence before joining forces.

It’s not just a matter of buying a franchise and expecting the money to roll in – you are starting a business. A franchisee should understand that the franchisor is only there to provide a brand and system – they are not there to do the work for the franchisee.

On the flip side, the great thing about a franchise is that you are buying into a proven model.

There’s a few business philosophies I’ve learned along the way that can help steer the course.

A franchisee must make money before the franchisor

It’s important both parties make money but it’s more important the franchisee makes money first. This means the franchisor has to have a passionate interest in the welfare – especially the financial – welfare of its franchisees. Conversely, if the franchisor looks to make money first (before the franchisee) they will not have a group for very long.

Franchisors are not in the business of selling franchisees

A franchisor is in the business of a particular product or service and has to be about making their own business healthy. Their business will not work by selling more franchisees if the core product, service and business model is not strong.

If the price is high, the chances are the franchisor is high falutin’ too!

If the cost of a franchise is unreasonably high, the chances are it’s a get rich quick scheme for the franchisor. If they are desperate to sell, with low criteria for entry, then the chances are they are too interested in selling franchises, and profiting through that, than the actual welfare of the franchisee.

Pick a franchisor that is picky about you!

If you’re asked to jump through more hurdles than you expect – for example lots of questions about finances, where the money is coming from to fund it, your experience and motivation – that’s a good thing. It means the franchisor cares. Some franchisees don’t work out – that could happen in any business situation. It’s the franchisors job to catch them before they’re accepted as franchisees.

Be a super sleuth

Go and have a word to a number of other franchisees in the group – but not the ones the franchisor suggests – pick your own. Prepare your questions beforehand. For example, how much support does the group give? What’s the mood of the group like? Are they interested in you as a business person and not just in their own outcomes? Are there quality inspections done on the products? What’s the training look like? Importantly, check the financial health of the franchisor.

What exactly are you getting?

You need to consider whether what they’re offering is a full system and supply chain or just an idea or product. Business is not just about the brand. The brand is just the start.

Be entrepreneurial

Entrepreneurialism is not necessarily about making money. It’s about having a dream and achieving it. Money hopefully is one of the outcomes as is satisfaction. As you grow in your business, a good entrepreneur stands outside him or herself and analyses where the weaknesses lie. They surround themselves with people that are better than them. Be pragmatic in the long term – there is no room for ego.

Bob Beaumont has been at the helm of Beaumont Tiles for 38 years. His philosophy of ‘don’t think big, think huge’ has resulted in a small South Australian business growing into a multi-million dollar enterprise with 108 stores across most of Australia. Bob oversees a company owned and franchised retail model. For him, business success takes drive, vision and risk taking, innovation, uniqueness and a dash of unconventionality.

For more information contact Franchise Recruitment Manager, Marcus Allchin on:

0418 791 088