Your choices when buying a Franchise

Julie Finch-Scally, Founder, The Duster Dollies

If you are looking for a franchise with low overheads you will need a business you can run from your own home.

You will also need an office, a computer with internet connection, a separate phone line and transport, but as you will already have most of these, your start up costs should be minimal. Your greatest expense will be the purchase of the franchise.

There are many franchised businesses that can be run from home and most are in the service industry. They include various types of cleaning; gardening and helping with pets. Some franchises have now been established in electrical and car maintenance, even book keeping. So when it comes to choosing which industry you would prefer, pick an area in which you know and will feel comfortable.

Many franchised operations run from home are owner/operator businesses. This means you do all the quoting, work and invoicing, unless you choose to employ others to help you with the day to day operation. Most successful home franchises have the female partner taking the phone calls and doing the accounts, while the male does the physical work. Of course it doesn’t have to be this way, but always seems to fall into this routine. This generally is because the work itself is more male oriented and the female usually has a natural flair for talking with prospective customers and balancing the books.

There is one industry that doesn’t fall into this criteria and that is domestic cleaning. When it comes to strata and commercial cleaning, carpet cleaning and the cleaning of pools, one always expects a man to turn up at the door, but with cleaning inside the home everyone automatically expects to see a woman. Men are just as capable of cleaning a home as women so there are many home cleaning franchises where a male/female couple does the work. In fact having two people working is quicker, more homes are cleaned in one day, thereby increasing the income.

But what does it mean to be running a franchise? Why wouldn’t you do it yourself, when anyone can start up a business and purchase the required equipment?

The reason behind purchasing a franchise instead of starting on your own is knowledge, support and security. Getting yourself established with a regular clientele takes time and because a franchise has a known name and brand you are generally provided with customers from day one.

A franchise is a carbon copy of a business with a well established working system. When you purchase a franchise you will be trained in that system. Having that behind you is not only a form of security it is part of the brand that gets you the work. There will also be benefits in generic advertising (sometimes carried out by Head Office) and stationery printed in bulk, cutting down your costs.

Taking on a franchise makes it easier for you, but you will be expected to assist both the franchisor that started the system and other franchisees by upholding the companies’ standards and protecting the brand.

Choosing the best franchise will be the hardest part. Do you want to work inside, be outdoors all day or work with animals? There are so many different franchises to choose from, you will need to put some effort into evaluating what is available. When doing your homework into what franchise to purchase there are certain things you should look for in the company. Is there the opportunity to see how the franchise operates? If there is you will probably be expected to sign a confidentiality form saying you will not disclose or use any of the information you discover.

Find out about the training and whether they have a manual outlining all their systems. To ensure the system is adhered to most franchises have manuals describing how everything is done. Will they include training on how to keep your accounts or do they expect you to work that out yourself?

Budgeting and cash flow are the backbone of any business. If you don’t know anything about that you need to find out how it is done. Balancing income with your expenses can’t just be left to an accountant; you need to learn how much money is coming in each week to cover your weekly expenses. Income isn’t necessarily your profit; expenses have to be taken into consideration. A well established franchise should be able to give you some indication of how much you can earn and your expected expenses.

Being with a franchise you will have a stipulated charge for all jobs covered. Knowing how much you will make on each job, helps you evaluate the number of jobs per week required to cover costs; and make a profit. If you purchase a lawn mowing franchise you work on how many cuts you do a week. Should you be doing domestic cleaning where the charge is by the hour, you work on the number of hours you clean per week. With dog washing it is so much per animal, depending on size, so the number of different sized dogs gives you an estimated income. All this information is useful for working out a business plan.

Support when you first start a franchise is more than important. Knowing you have someone to ring and discuss problems with, gives you confidence. When you have confidence you will not only do the job better, you will communicate better with your customers thereby establishing a good relationship, which means continuing work.

Any franchise you look at should be able to advise you how much support you can expect during your first few months.

The other form of support you will need is from your fellow franchisees. If the organisation holds annual conferences where all the franchisees meet and discuss problems and new ideas, there is more chance of the business growing. Every company needs to change and utilise new ideas. Annual conferences for franchisees generate lots of camaraderie, new concepts and the desire to work with and for each other.

The final and most important part of your research is the resale value of the franchise. You should go into business not to buy yourself a job, but to build up an operation which after a period of time can be sold and make a profit on your investment. This can depend on the success of the brand you are purchasing. The more well known the company; the easier it is to resell the franchise. If you are one of the first franchisees of a company you truly believe will grow and become a household name, you should still make money when comes the
time to sell.

Discovering these things about an existing franchise is the reason why you do your homework.

One more important thing to remember, if you are thinking about buying into a franchise, is the franchisor will want to know whether it is worth their while to have you invest in their company. A franchisor grants a franchise. That grant allows you the right to the use of the brand, name and system. This is what you are purchasing. So don’t be surprised with the questions you will be asked.

Very few people who purchase a franchise lose money; where as many of those who have started a business on their own have closed their doors within three years. If you want a business, franchising is the best option, but do investigate the type of business you want to work in and what that franchise has to offer before making a decision.

Julie Finch-Scally recently retired as founder/Managing Director of The Duster Dollies. Discover her blog, cleaning book: The Third Oldest Profession and Ebook: The Cleaning Business Guide is available on her website.


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