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What to consider when investing in a franchise

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Investing in a Franchise

1.    Define your investment
Before you start to investigate franchising, you must establish the level of investment you can comfortably afford to make. One of the biggest reasons for business failure in the UK is the proprietor not having the correct levels of funding. Some banks specialise in franchising and are listed on the BFA website (, you may want to speak to them for advice.

2.    Does it suit you?
Far too many people forget to judge their own stability for a franchise opportunity, yet this mistake can lead to years of unhappiness for you and your family. You must consider whether a franchise suits you, your needs, your wants and your family. For example, if you are looking at the convenience retail industry then you may need to invest a lot of hours on evenings or weekends to meet the needs of your customers.

3.    Choose the industry sector
Carry out some market research, looking at what business model best suits you. Try to avoid fad industries, consider the boom/bust cycle and address any market or statutory changes. This form of commercial investigation is the easiest and cheapest exercise to conduct but far too many potential franchisees overlook it when investing in a franchise.

4.    Seek professional advice
Advice will come in three forms:
– Legal: From BFA approved solicitors
– Financial:  From BFA approved accountants and banks
– Commercial: From existing franchisees, the franchisor, the British Franchise Association and other industry bodies.

5.    Understand the franchise
Thoroughly research the franchise opportunity you are considering and try and get as much information as possible. Speak to the franchisor and franchisees and find out as much about the franchise as you can. They should be open and honest and will help you to make an informed decision.

6.    Evaluate the information
Objectively compare your options on paper using the standard questions and a formatted system. It often helps to seek outside assistance at this stage from someone who has not become emotionally involved in the research.
Remember: Franchises can be more successful than other business models but it takes a lot of hard work a determination to succeed.

Remember: Franchises can be more successful than other business models but it takes a lot of hard work a determination to succeed.


Author: retailaccounting

CounterBooks is an online retail accounting management suite which is used by retailers across the world.

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