3 Top Tips when researching franchising
Auditel Head of Recruitment, Nick Tubb, has worked in franchising since 2000. Aside his experience in the consultancy franchises sector, he has also run since 2006 his own business, under managememt today, providing guidance and support to people considering starting out for themselves through franchising Nick outlines some of the most important stages of the franchise research process that people should ensure they undertake in any franchise that they are considering partnering with.
- Speak with existing franchisees
It is very important that you speak with several existing franchisees, for a number of purposes, once you have been through initial exploration of the opportunity with the franchisor. It is important to have a solid overview and understanding of the business model and services first as speaking ‘too soon’ to franchisees would likely mean asking questions of them that could have been answered by the franchisor, and therefore not asking for experiences and feedback in the areas that are most suited to franchisee discussions. This could waste your time but especially theirs.
It is important to speak with franchisees of mixed experience so that you can get feedback in different areas. An established franchisee will not be able to offer much feedback in respect of the current training and support programme, though will be able to feedback on ongoing support services, developments and network events, as well as the long-term benefits of the franchise. Contrastingly, a new franchisee who is in the development phase of their business will be able to give guidance in respect of the hard work and graft needed to build a business. They are also a recent experience of the training and support programme and so will be able to offer their feedback on these areas in particular.
At Auditel, not only do we utilise a wide array of our affiliates for these conversations, in order that the feedback that prospective franchisees receive is as realistic as possible, we have also engaged many franchisees who have provided feedback in the form of videos, articles and case studies. A franchisor should be proud of its network and therefore keen for you to engage with their franchisees, and therefore if you speak to any franchisors who don’t encourage you to speak to franchisees or are very limited in who you may speak with, then of course this is something to be cautious of, and you should ask to speak to a mix of franchisees before committing to anything.
These conversations are It is a very important part of Auditel’s franchise research model as of course it is a two-way process. The feedback that franchisees offer to us after a conversation is part of the application process that ensures that a decision to become part of the Auditel network is in the best interests of both parties – this is also why it is very important to speak with key personnel and directors, which brings about the next point….
- Speak with the Business Owners and Directors
Franchising is a partnership that will likely lead to a business commonly for ten or more years for most Auditel affiliates, certainly a minimum of five. Therefore, it is vitally important for both you and us that we both feel that we wish to be partners in business. Chris Allison, Founder and Executive Chairman; Chris Aston, Managing Director, and Fiona Steels, (Director of Network Support) have fifty-nine years of franchising experience between them, and it is imperative that you speak to all three as part of the due diligence process.
In Auditel the overall support team members collectively have decades of experience too, and some of the Auditel network have been running their businesses for over twenty years (many more have happily retired also!). Knowing that the franchisor cares about the success of your business and has vast experience that is being opened up for you, is a massive advantage for you as a franchisee.
Ultimately, feeling that the franchisor and leadership team are people that you like and get along with is a vital component of your decision making. Afterall, you will likely be working together for the next ten years or more.
3 – Build a conservative business plan
I have spoken to thousands of prospective franchisees over two decades and the majority recognise that franchisng does not offer a ‘get rich quick’ scheme. I say the majority, as there are sometimes occasional indivduals who feel they have discovered an opportunity elsewhere that promises big returns for minimal investments. Of course, such companies usually disappear as quickly as they pop up. If you have followed the first two top tips then you’ll be pleased to have avoided the ‘too good to be true’ opportunties – but be careful, they are always out there!
Of course, every business model will vary in terms of speed of cash flow. Auditel offers significant profitability as the costs within your business can be so low, so once your business is becoming established and you have a portfolio of clients and multiple income streams, few franchises can rival the profitability, but it will take some time to get to that point. We work with you to create a realistic business plan that ensures you have the funding necessary to pay the bills at home whilst devloping your business. Be wary of any franchise business plans that promise quick returns and profits, and this is part of the essential reason to speak with a number of franchisees and get their feedback in this respect.
We have very good relationships with the ‘franchise banks’ and they can provide funding to cover up to 75% of your total start-up costs including working capital through the development phase, and borrowing rates are very low right now.
It’s important to remember that the relationship between franchisee and franchisor is a partnership. Both parties are dependant on each other to succeed. We are committed to making your business achieve the objectives you desire. Find out for yourself, start the exploration process in more depth by scheduling an initial call, and you’re then most welcome to continue to research further from there. Log into the Auditel Franchise Portal to see more information