Top Reasons to Invest in a Franchise in 2023
Could 2023 be the year you be your own boss? In the UK alone there are over 1,000 franchise opportunities. Franchises are becoming more and more popular as aspiring entrepreneurs see them as a more secure route to business ownership. So what are the pros and cons of investing in a franchise and what exactly does it mean?
Thanks to the recent cost of living crisis in the UK, many people are re-evaluating their careers. From many not earning as much as they would like, to those now in a mortgage crisis thanks to inflation, could 2023 be the time to be your own boss and take control of your career?
What is Franchising?
In the context of business ownership, business-format franchising is where a proven and successful business model makes its license, branding and operations available to another party. The intellectual property owner is referred to as a ‘franchisor’, whilst the investor buying the rights to trade is known as a ‘franchisee’.
Franchising is considered by many to be a preferable route to business ownership because you’re taking on the brand name and system of operation of an already established business. By choosing the franchising route, you bypass many of the risks associated with starting up a business alone.
Let’s take a look at some of the top reasons to invest in a franchise.
A Fully Supported Route to Business Ownership
From the start of your franchise exploration journey and due diligence, right up to making an enquiry, signing the franchise agreement and onboarding as a franchisee, you are fully supported. Ultimately, the support of a franchise network is what makes franchises so successful.
Many banks in the UK favour franchises over starting up a business alone. In fact, many banks such as HSBC and Natwest have established franchising departments that have teams in place to specifically deal with franchises. It is widely recognised that most banks can lend up to 70% of the franchise investment. Clearly, those who have a thorough and effective business plan are likely to get a better chance of support. Even outside of banking, there are many businesses out there that can also support franchise finance.
Financial support aside, the franchisor often provides full training and ongoing support as part of the franchise package. This might take the form of residential or online training, but it often includes everything you need to know about running the business. Such topics would include staff recruitment, marketing, accounting and business management. If the franchise isn’t home-based, the franchisor will often help with site selection and positioning your franchise in a way that will reach the most potential clients.
A Thriving Community
Don’t write franchises off as pyramids, scams or get-rich-quick schemes. Whilst there can be the occasional cowboy franchisor solely in it to make a quick buck, most franchises are sound investments provided you make the effort to help it thrive.
Almost every country in the world has a regulatory body – be it government or self-regulated by a trade association. From the International Franchise Association to the British Franchise Association, these trade associations are set up to support the franchising sector. Whether helping businesses franchise their brand, helping people to invest in a franchise, or suppliers and consultants looking to lend their services to the sector, the franchising community is thriving. When a franchise brand has the trusted seal of a franchise association, it demonstrates that the franchisor has gone through a rigorous accreditation process and deserves the kudos that come with the badge of approval.
Associations aside, regular events, seminars and exhibitions take place across the globe. Franchise exhibitions attract thousands of people interested in getting into business ownership and typically there are sometimes 4+ different exhibitions throughout the year in the UK. These events draw in hundreds of franchise brands and suppliers and attract considerable footfall. Many franchises look to exhibitions and discovery days not only for franchise advertising but as an opportunity to speak to members of the public and answer any questions or doubts they might have.
Many Types of Franchise Opportunities
There are over 1,000 franchises in the UK. Some franchises are widely recognised chains, whilst others are smaller brands. But as a franchise network grows, its brand and trademarks resonate stronger.
If you’ve got a passion for the highest levels of customer support, there are a lot of customer-facing franchises to suit a range of budgets. At the lower end of the spectrum, you could invest in an oven-cleaning franchise for less than £20k. Or a mobile coffee van, too under £20k, with support from the franchisor when it comes to vehicle leasing. At the higher end of the spectrum, you could run your own coffee shop either as a kiosk or high-street store.
Love pets? There are many types of franchises within the pet sector, from cat sitting to dog walking and grooming. Most pet franchises are available for less than £20k, so you won’t have to break the bank – especially with the 70% funding we spoke about earlier!
A Business in a Box
As well as receiving full training and support, the investment nets you everything you need to start up the business and get trading. For coffee franchises, that might include shop fitting, staff uniforms and launch marketing. For a van-based business, it will usually include vehicle sign writing, equipment, van conversion (if coffee, dog wash etc) and of course, a website or micro-site along with a marketing campaign to get your business off the ground.
From marketing to site selection, none of this is provided to you when you start up a business from scratch.
Ongoing you should expect to pay a monthly fee which covers ongoing support, plus national marketing campaigns that benefit the entire franchise network – for example TV advertising to newspapers and leaflet distribution.
Regain Control with Franchising
If you’re looking to be your own boss, many franchises offer flexibility that employees could only dream of. From working your hours to fully maximising your earning potential, more and more people are recognising franchising as a more reliable route to business ownership. There are many benefits of franchising over starting up alone, so why not take a look into the franchising sector? This time next year you could be running your own business, in it for yourself but not by yourself, backed by the franchisor of a proven brand.