Feature - Home-based v Mobile Franchises
This article appears in the March/April 2014 issue of Business Franchise Australia & New Zealand
Do you fancy sitting at your desk in your slippers and PJs? Or is hitting the open road more your style?
Deciding which kind of franchise is right for you is one of the greatest decisions you will make when entering the world of franchising. In this edition of Business Franchise Australia & New Zealand we take an in depth look at home based franchises and mobile franchises.
Apart from the obvious difference between these two kinds of franchise businesses, each in fact share a number of similarities – including (sometimes) lower start-up costs, and the flexibility to work around your personal schedule. First let’s take a close look at mobile franchises.
HIT THE ROAD
Ever felt tied down by travelling day in and day out to the office, staring at the same four walls? Then perhaps a mobile franchise is for you. The freedom and diversity you will gain by hitting the road and visiting your clients could be the change of scenery you are looking for.
The variety of mobile franchise opportunities is vast and ever-expanding. Everything from food vans, dog washing, lawn mowing, house cleaning, car washing, selling tools, servicing cars, package delivery, fence building, business consulting…phew! The list just goes on and on. You name it, and there will probably be a mobile franchise available for you to make all your own.
The one thing they all have in common is that they do not operate from fixed premises.
Territory, as with most franchise business, is particularly important when operating a mobile business.
With a mobile franchise, your income will be received from the clients that you establish within your specified territory, so of course it is imperative that you know the exact parameters of your allocated territory. It is also important that when doing your research into a mobile franchise that you investigate whether it is actually possible to generate the income you require – or desire!
The ways in which franchise systems divide their territories may differ – whether it is by postcode or physical boundaries – you will need to investigate the area thoroughly.
Some franchise systems offer exclusive territories, in which you will be the only operator of that franchise in that area, while others offer non-exclusive territories. In non-excusive territories you will face competition from not only other similar businesses but also from other franchisees in your network.
Always check with the franchisor as to the specifics of territory allocation for the franchise system you are investigating.
As a mobile franchise operator, you are master of your own daily schedule. Need to drop the kids at school? No worries! Surf’s up? Grab the board and hit the waves! Obviously you’re not going to make much money if you spend all your time running errands and hanging ten, but when the occasion does arise, it’s great to be able to have some flexibility in your day.
As with any business, you are only going to get out of it as much as the hard work you put into it. With a mobile franchise you can choose to work as little or as much as you want.
Good customer service can set you apart from your competitors, and is what will keep your clients coming back. When operating a mobile franchise, this is truer than ever before. Be on time, be well presented, and ensure that you have everything you need to perform the job, or have the stock your client wants, every time.
The presentation of your vehicle is also imperative. It is representative of your business – keep it clean and well maintained and it will show your clients and members of the community that you take pride in your business.
In most cases a mobile franchise will be cheaper to purchase than a franchise operating from a retail outlet, the obvious difference being that fixed premises is not required therefore eliminating the need for a lease and rent payments and the cost of a shop fit out.
Mobile businesses often operate from a home office, also keeping overhead costs at a minimum. To get started all you may need is a phone and computer.
In addition, mobile franchises often eliminate the need to employ additional staff members into the business, so the costs of doing so, and the associated paperwork, also disappear.
However, just because your investment into the business may not be as high as that of a retail outlet, this does not mean your due diligence should be cut short.
HOME SWEET HOME
Working from home is on the rise in Australia.
The rapid development in technology over the last 20 years has changed the face of business, with technology available that allows us to communicate instantaneously, even face to face via video conferencing if we desire, with people anywhere in the world. For those working from home, we are no longer isolated; we are connected, both faster and clearer, than ever before. A home based franchise could be the right way for you to skip the daily commute, leave the office grind behind, and establish a business from home using the tried and tested formula of a successful franchise system.
Whilst many of us envision working from home slouching around in PJs and slippers, watching the odd day time movie, the reality is that working from home should be treated as a normal job. Setting a daily schedule, showering and dressing as if for the office and closing your office door behind you, is likely to be a more productive and motivating way to go about your day.
Some home-based franchise systems will require you to visit your clients in person, others will allow you to conduct your work via phone calls and emails, and there are even franchise systems available that could provide passive income - meaning you can earn money by doing very little at all!
One of the greatest advantages of operating a home business is that of flexibility. These kinds of businesses are perfect for a stay at home parent; work can be completed in between school hours, late at night or early in the morning whilst the house is still sleeping, even whilst baking a cake. The little ones may be happily settled in for a nap while you catch up emails and correspondence. It’s this flexibility that appeals to those operating a business at home.
Or you may be an entrepreneur wishing to set up business but without all the associated overheads involved with employees and setting up a shop front.
SUPPORT AND TRAINING
As with any franchise, it is important to ensure that your franchisor provides adequate support and the ongoing training required to operate your business. This is one of the major benefits of being involved in a franchise system; you are becoming a part of a successful formula that is replicated again and again, and it is the franchisors job to ensure that their franchisees are adequately supported to be able to operate their business effectively.
Ensure that you discuss with your franchisor what will be provided in order to begin operating your franchise, and what ongoing training will be provided.
Regardless of the type of franchise you choose to purchase, by conducting thorough due diligence you will increase your chances of making a good decision and of future success.
Due diligence is the process of evaluating the prospective business purchase by getting information about the financial, legal, operational and other important aspects of the business.
Some of the questions that need to be answered include:
• Do you enjoy the work involved in this franchise?
• How much will you need to invest to buy and operate your business?
• What initial and ongoing training will you receive?
• What level of support will you receive with managing your business?
• What kinds of marketing activities are conducted by the franchisor?
• How will you receive leads? Will they be provided by the franchisor or will you be responsible for generating them for yourself?
• Does the franchise have the ability to remain competitive and maintain its brand value?
Evaluating a prospective franchise business is not an easy process and professionals in franchising can help you carry out your due diligence. An accountant, lawyer and your bank are important sources of advice and knowledge.
Talking to those already involved with the franchise system is a great starting point; franchisees can share firsthand their experiences with operating within the franchise system. The franchisor should be forthcoming with the contact details of current franchisees.
It’s also recommended you read the Franchising Code of Conduct to understand your rights as a franchise and those of the franchisor. The Franchise Council of Australia has an abundance of information relating to the code as well as recent changes and reviews of these changes on their website www.franchise.org.au.
ENJOY THE RIDE
So whether it’s a mobile franchise or a home-based franchise that suits you best, we hope this brief guide has given you some insight into the benefits of each, and wish you luck on your franchising journey.