What to look for in a franchise opportunity
This article appears in the Jan/Feb 2016 issue of Business Franchise Magazine Australia & New Zealand
Searching for a franchise opportunity? Narellan Pools Chief Operating Officer, Peter Baily shares his tips on what to look for.
It all begins with you
Before you begin exploring all the franchise opportunities in Australia and New Zealand, the first thing you should do is assess whether you are the right fit for franchising; the right kind of person to own a business.
The truth is, franchising is not for everyone. There are a few characteristics that will set you on your path to becoming a successful franchisee.
A passion to own your own business
A passion to own your own business is usually the first thing a franchisor looks for in a franchisee. You need a lot of it. It is important to understand the significant commitment involved in running a business, and have a clear sense of purpose around why you want one of your own. The life of a franchisee, particularly in the early years, may not leave much room for lifestyle. When faced with the challenges of working long hours, solving problems and managing a team, it is often the big “why” that will keep you fronting up for work day after day. Most franchisors will be keen to know what your motivation to own a business is.
Desire to build wealth
One of the many advantages of franchising is the opportunity to build wealth. The franchisor provides amongst other things an established brand, sophisticated operating systems and a wealth of knowledge - all fundamental tools for success - but the rest is up to you. In order to truly build wealth, you need the ability to sell the dream. This again comes back to passion; passion for the brand and the product you are selling. You need to believe in what you are selling, and inspire others to buy into the dream.
You know how to lead a team
If the franchise needs more than just you to operate, then imperative to a franchisee’s success is the ability to lead a team. Good leadership is hard to define: it’s a blend of skills that make others want to follow your path. You must be able to problem solve, motivate others, prioritise tasks and delegate accordingly. These skills are not something that can be gleaned from a text-book, but rather they come from experience in managing and leading a team. A good leader sets standards, can embrace change and can keep a team focused during challenging times – of which there will be plenty. Speak to former colleagues, friends and families about whether you have what it takes to lead a small business.
Strong organisational skills
There can be a lot of administration that comes with taking a franchise opportunity. You need to be organised! No matter how great a franchising system is, if you are not organised and actioning what needs to be done, it can quickly become unstuck.
You are an ‘intrapreneur’
By definition, an intrapreneur has the ability to be creative and entrepreneurial, but remain within the boundaries of a brand and system. Remember, with franchising, the system is a large part of what you are investing in, so it is important that you can respect the policies and procedures that have been developed and proven over time by the franchisor. An intrapreneur knows how to work within these boundaries, but is constantly on the look out for smarter, more creative ways to execute within these boundaries to grow and improve their business.
You have the right team behind you
It is important that you have the right team around you. Whether it is your advisors, your staff, other franchisees or your friends, a group of supporters is important to your success. It is especially important that your family is supportive of what you are doing. Research has shown that franchisees with highly supportive families perform better than those who don’t have this.
Finding the right opportunity for you
Once you have established that you are the right fit for franchising, the more detailed questions begin:
What sort of investment you want to make? Typically, you can expect to invest anywhere between $20,000 and $500,000 in an entry level franchise business. Assess your finances, talk with your bank and decide how much you want to spend before you start looking.
What kind of business would you like to align with? What are you looking for in a franchisor? Longevity? An international brand? A strong sense of community and culture? Write a list of key characteristics you are searching for in a franchisor, and check them off as you assess opportunities. Do you have a preferred industry? Franchise opportunities span many industries. Are you interested in retailing? Hospitality? Construction? Services? Once you narrow down the industry that ignites your passion, the field will narrow significantly, giving you a more qualified source of options to explore.
What lifestyle would you like to lead? It’s no secret that often there is not much room for lifestyle when you run your own business – particularly in the first few years. But, some industries can be particularly all consuming. For example, the idea of running a café can appear glamorous, but the reality is days will start early and finish late, seven days a week. Having a great team can mitigate this to some extent. Be sure about what you are willing to sacrifice in terms of lifestyle, before you commit.
What potential does the business have? When you are investing a significant amount of time and money, you need to have a clear understanding of the potential return. Spend time speaking with other franchisees within the brand. Ask them, where are the financial opportunities? How do I maximise the potential of the business? How innovative is the franchisor? Does the company respond to changing needs in the market? What is the marketing like? Regardless of the business you are in, you have to be able to sell, and you need a very clear picture of what the profitability of the model you are buying is. Any investment should be made based on a strong understanding of the potential financial returns.
Understand the role of franchisor. There are clearly defined roles and responsibilities for both the franchisee and franchisor, and it is important to understand where the franchisor stops, and your role starts. For example, at Narellan Pools, our marketing activity generates leads which we provide directly to the franchisee, and then it’s their responsibility to convert those leads into sales. Take the time to understand what will be expected of you, and assess whether can deliver on that expectation.
The strength of the franchisor. Remember, it is the brand, the systems and the culture that you are buying into. Understand the strength of the franchisor. Again, this is where existing franchisees can educate you. Important attributes of franchisors are the ability to listen and respond to the needs of franchisees. Do they treat all franchisees equal? Is the franchisor committed to your success? How many franchisees are in the network? What support structures are in place for franchisees – particularly new ones? What training will you receive both initially and ongoing?
Do your due diligence. Treat buying into a franchise network the same as you would making any significant investment. Do your homework. How long has the franchisor been in business? What has the performance of other franchisees in the network been? Have many franchisees failed? What structures are in place? Do they have a strong team? The franchisor should be backed by sophisticated business people. Ensure you review all of the legal documentation and engage a lawyer with strong franchising experience to review and advise.
My number one tip: Look for an established brand with recognition in the marketplace, great leadership, strong operating systems, successful franchisees and powerful marketing. The rest is up to you.
Peter Baily is leading Narellan Pools through aggressive expansion. He is credited as the driving force behind some of the Australian franchise sector's most successful growth stories and has a clear remit to develop and grow the Narellan Pools business across Australia and the world to be a best of breed franchisor, manufacturer and construction business.
Iconic in-ground fibreglass swimming pool brand, Narellan Pools was established over 40 years ago. With proven business systems, world-class training and strong marketing, Narellan Pools is committed to the success of its franchisees.
Franchise opportunities in Australia are now available.
From Business Franchise Magazine.