Have anyone successfully invested in any franchise ?

[AliBabaa]

Have anyone successfully invested in any franchise, I have look at few websites where 100s of companies are listed but really don't have any idea what should you go far.

My budget is 20K-25k Can someone guide me please. I am willing to invest and work in any sector though i am also holding degree in Business and IT.

Calling all those who has invested please advice generously.


Thanks

 

[Chris Ashdown]

so what did you learn on your degree courses, how to make decisions!!!!

 

[ethical PR]

Why do you want to invest in a franchise rather than start your own business? Your budget will dictate the type of franchise you can invest in and yours is quite small restricting what you can consider.

What will you do about running costs (you need to allow 6 - 12 months before you can become profitable). Franchises are normally only valuable if they have strong brand awareness i.e. subway, McDonalds which you won't be able to afford.

You'd be far better working in sector/s that you are interested in, gaining experience of the business from a management and operational perspective and using that to help identify what business you want to start up.

Surely you should be looking for a business (whether a franchise or otherwise) where you have knowledge and experience in/about the sector you want to enter, you have done your market research to ensure there is a gap in the market you want to enter, you understand your competitors and what you can do differently/better to gain customers, and you know who your target customers are - age, demographics, lifestyle, which communications channels they use. And you know how to market to them and have the budget to do so.

 

[garyk]

The problem with franchising is you won't get objective views.

Obviously the franchisor will only have good things to say. Franchisee's who didn't do well will be gagged and won't say anything. Then there's the BFA, the british franchise association. Well they are self-regulating so say what they like and typicaly what franchisors want them to say!

Are all franchises bad? Nope, just most of them.

 

[JEREMY HAWKE]

There is a courier company ( They know who they are) That claim to be the best you can get !!
They are on their third franchisee in this area since they started .Each one has phoned me and introduced themselves then to explain its quieter than i thought tt would be . Then they stop and lose their money .
The company thinks about what works everywhere else and tries to apply that theory to other areas making the failing franchise to carry the hit .
There is only one way to run a courier company in Devon and Cornwall and thats know the market and run your cost very very tightly because what goes on everywhere else wont happen here !
If the area was so profitable and lucrative they would be just setting up a branch themselves and not selling the area .This goes for most franchises they are a joke

 

[KM-Tiger]

You are in danger of falling into the "choosing a franchise" trap. Wrong question, that will likely end with you emptying your wallet into the franchisor's.

Choose an area of business first, then amongst the options, look at whether a franchise is appropriate. IMHO a franchise is only appropriate where you can satisfy yourself that it gives you a competitive edge that you cannot obtain any other way, and then only if the sums add up.

I say all that as a franchisee, and a happy one at that.

 

[Mitch3473]

There are fores and againsts with franchising. If the franchisor is offering a product or service that is new to market, no one or not many have exploited or for some reason, possibly financial for a major franchise,then it can be a good thing if you are prepared to take the risk...BUT and it's a big but, so many franchisees think they can purchase a franchise and sit back and wait for the phone to ring. It wont. A franchise is a tool to work with not an instant path to success. It's a proven, or at least should be, business model and that is really where it ends, the rest is up to you. Do your homework,does it have a pilot scheme, phone up exsisting franchees and not just the ones the franchisor gives you, get your bank to check it out. The BFA , as has been mentioned, is another port of call but dont rely on it.
£20 - £25k is not a huge amount for a franchise in this day and age and you generally get what you pay for however that doesn't mean it wont be a success

 

[Gecko001]

I would do a search on this forum as this subject came up a few months ago. There were links on the thread to websites where franchises are listed/advertised giving costs etc.

 

[alasdair1982]

Its like any business, you get out what you put in. I am a Snap on Tool Franchisee which for me has been great although if anyone thinks buying a franchise is an easy way to a ready made business then they are wrong. The franchisor offer fantastic support and help all the way. However its your business and only you will make it work or fail. I can tell you that its been great for me, i hit the road running and haven't really stopped in 2 years, My business is in a fantastic shape and will be looking at expanding into more trucks over next few years and have no regrets whatsoever however for every success there are as many failing at it and i think this is due to the lack of effort being put in by the franchisee, bad money management, etc

I looked into SO purely because i was on the tools, knew the product, knew they were the most desirable and best on the market and an area became available locally to me. I would not have even considered any other franchise.

Do your homework, then do some more and then some more and then find and contact current franchisee's. I know most SO dealers will happily tell anyone what its is really like once the dust settled.

 

[MBE1]

Franchises are often sold as a guaranteed way into business, truth is as with an independent business you are still responsible for obtaining the business 99% of the time. Some franchises have a good name and offer a certain amount of business from a well known name, but they tend to cost a lot.

As mentioned, think about what line of business you wish to do first, then look at franchises and ask what extra they offer over doing things yourself. Franchises often go belly up as with any other business, so what are they offering for the franchise fee and on going fees to make them worthwhile?

 

[cjd]

Why would you want to work to promote someone else's business?

 

[Mark T Jones]

Why would you want to work to promote someone else's business?

I think that question has been well addressed in the above posts

Good franchises are all about the brand if you have faith in the brand, if it can add value to it and it can add value to it. Franchising can be highly effective

 

[Gecko001]

Franchises are more than just a brand. In fact many successful franchises are not at all well known. Have a look at some of the franchise sites and see how many brands you recognise? You will be lucky to recognise 10% of them. Franchises offer basically a system of how to do something successfully. They offer inside knowledge on all aspects of the business. Things that the franchisor has leaned from operating a successful business. Yes the McDonalds and Starbucks trade on their name now, but did they do that when they first started up.

 

[garyk]

Franchises offer basically a system of how to do something successfully. They offer inside knowledge on all aspects of the business. Things that the franchisor has leaned from operating a successful business. Yes the McDonalds and Starbucks trade on their name now, but did they do that when they first started up.

That's what they *should* do, and some do no question. The problem is many unscrupulous franchisors taken un-proven model and realise that the only way to get cash out of their business is to franchise it. With no operating procedures or methods.

Its really high time the BFA provided some sort of audit/controls to ensure the quality of franchises to give new franchisees a fighting chance.

 

[Gecko001]

That's what they *should* do, and some do no question. The problem is many unscrupulous franchisors taken un-proven model and realise that the only way to get cash out of their business is to franchise it. With no operating procedures or methods.

Its really high time the BFA provided some sort of audit/controls to ensure the quality of franchises to give new franchisees a fighting chance.

The problem with any non-governmental organisations is that they do not really have much control over their members other than at time prospective members apply to join or expelling them after they join. Assessing prospective members is time consuming and expulsion would be expensive in legal costs if the expulsion was challenged in the courts.

 

[Chris Ashdown]

And papers like the Daily Mail advertise it as the holy grail every week and the Banks seem to think their all good companies

Many people seem to have forgotten how to go to a library or use google to learn about any subject in the world and do their own research, even gardeners seem to want to buy a magical franchise

 

[Ashley_Price]

I'm not a franchisee, but I bought my business from the previous owner, rather than started a brand new business in the same industry, and there were three main economic reasons for this:

1/ Taking over the current business meant I was able to negotiate the same credit terms and prices with the suppliers. If I had started afresh, I would have had to pay for everything up front for six months and at a higher price. This would have meant needing a large sum of money put aside and be charging current customers a higher price, meaning I would have lost them.

2/ The business had a current customer base. Okay, it wasn't big, but I had a stepping stone to get me started. I get regular orders from those customers while I am building up the new customers. (That's not to say I'm not providing customer service or ignoring the current ones.)

3/ I was took on the current website - there was no need to pay to have one of my own designed.

As many have said, there are for and against reasons for franchising, buying a business or starting a completely new one, and you have to decide which will work for you. But research it very, very careful, make sure you do your due diligence. Get advice from legal beagles and financial ferrets, etc.

 

[Ashley_Price]

Why would you want to work to promote someone else's business?

Well, there are thousands of people who do that everyday... normally they're called "employees".

 

[Dave.F]

Why would you want to work to promote someone else's business?

Like we all do here, this forum is a business!