Buying a franchise

Getting a superb one like McDonald's is a guarantee of success. If they let you do it, you'll do brilliantly well seems to be the case. My understanding is that McDonald's ask for no money to open a franchise, but instead put bigger barriers and challenges in place to get the chance.

I know several people that have taken franchises where the marketing of the franchisor is incredibly poor (website etc). That inevitably leaves the franchisee not only with a poor looking product, but rather than making the massive effort to succeed in building a business easier, they make it harder, much harder!

Morning simon,

I think you will find you need a rather large amount of cash to become involved,    I think homework is the key with any business opportunity, franchise or other.

The problem with the smaller brands, especially website based, is people think they are buying a successful business. They are not, what they are buying is the manual / booklet and possibly tools, the rest is down to them

You need just a mere 330k (140k needs to be liquid) to buy into dominos....

Agreed.

I see quite a few businesses who fail on their own, then spend their last £10k/whatever buying into some franchise nobody's heard of because they naively believed all the sales spin from the franchisor.

It breaks my heart, as a lot of people seem to buy into franchises out of desperation rather than research.

The two essentials to consider when you are investing in a franchise:
the brand's standing in the marketplace
a proven business system
 

If either is absent/below par - you would be better off starting on your own.

 

 

 

 

 

 

 

That only goes to show the value of the Dominos brand.

 

 

 

As a franchisor, I agree with most of what is said.

There are two types of franchise - brand name franchises and business process franchises.

Buying a franchise is not buying a money stream. It's buying your own business that uses a proven business system/product/service that makes you money if you apply it properly. Nor is it about buying a job.

 Many people have the technical ability but use a franchise to show you how to turn it into a profitable business. As an example and not a blatant ad, The Flying Doctor system shows you proven methods to get clients and we help you to get clients. It shows you how to then do the job using the flying doctor process. Result - profit.

If you sit back, a franchise will fail. It will fail even if the franchisor gets the sales for you. However, 90% of businesses are shut within five years while 90% of franchises are still open through the benefits of being part of a team.

However, too many franchisors see it as an easy meal ticket, don't put the ongoing effort in and that gets us all a bad name.

My thoughts are:

• Is what the franchise does something you want to work in? You have to be enthusiastic;
• What ongoing support do you get? I've talked to loads of franchisees of other systems over the last three years and this is the number one concern;
• Can you afford it? It will take some time to make the money that the leaflet tempts you with.

A good franchise will make you lots of money. Choose carefully

The first thing to do is to talk to as many of the existing franchisees as possible. If they have physical premises spend a week doing a tour.

I've been involved with several companies in the franchise model, and the reality is usually that the promised service / training / back up / experience / lead provision etc is hyped, sometimes massively so.

So talk to the people that know at the sharp end.

Not disputing that for a second. If i had that sort of money lying around idle i'd be up to my neck in tomatoes and mozzarella by the end of the month!

 

I can see value in being a part of the Dominos brand. They spend a fortune on advertising and their online ordering system is brilliant. If you you get a share of all that then it represents great value.

However like most peopel here I pick up a franchise magazine in Smiths and I dont see anything in there that couldnt be set up fairly quickly and easily by anyone who does some basic research.

Simon, what do you think of those estate agency franchises?  e.g. winkworths, bairstow eves etc. Would be interesting to hear the comments of someone from within the industry.

 

 

Winkworth is a cool franchise.  I know someone that was doing poorly, took on a franchise (same office same place) and is now market leader by quite some way.  Don't know anything about the Bairstow Eves franchises.  I do follow someone on Twitter that has a couple though.  I'll ask him how he gets on with them.

It must feel like being imprisoned if you take on a poor franchise. And having to pay for the pleasure!

 

 

I'll echo what David said.

My first business was a franchise in a very specialist niche. Unfortunately the lovely, supportive franchisor I bought from sold up and the new owners tried to milk it for every penny they could. So even if you do your homework, things can change and you are very dependent on the quality of support.

 

Wife worked for them in the big smoke many moons ago. Interesting tales . . . ;)

I would have thought the corrupted nickname would harm them but is it only those of us who have been in the trade who call them that?!