possible franchise opportunity...

[moredoor]

Hi all,

Will try make the query short and summarise to the best of my ability..

I have been offered the possibility of a business opportunity within a franchise,

I am currently in full time employment working in the motor trade as a 'smart' repairer, i.e mobile bodywork repairs and is steady but i have been interested in business for a while and have always been interested in working for myself etc

I enquired about a franchise opportunity within my similar career path, (smart repairs), as it seems quite an opportunity at a glance, i was sent a prospectus and contacted very soon after to say that there is an opportunity within my area and if i could go for an informal interview/ coffee to discuss further.


initially the agreement is an upfront cost and on going fees, 3 months training but no real contracts or work , its up to the franchisees to find the work.

I do know one of there franchisees within my area and does seem to do well, and is very busy!
so that could mean potential?

There is obviously a certain level of risk with any venture, but am i barking up the wrong tree or could a good business be developed?

any advice greatly appreciated as Im at abit of a loose end!

thanks

 

[alasdair1982]

Hi

Franchise's can be great or an utter disaster. The key is research and then more research. Personally i would be looking into the stability of the company, their finances, history, what people are saying online about them etc. I would presume that you've looked into Chips away or similar. I have previously been in touch with these about the same thing but decided against it for several reasons.

Ask yourself what are you paying for? What does the franchise fee cover? I know from chipsaway when i looked into it that the fee approx £30k was for a designated area and training, Everything else was chargeable, ie marketing fee, van lease, stock etc. Plus ongoing royalties i think were approx 10% of turnover.. I decided against it for these reasons.

You could easily set up your own smart repairs business with less money without the restrictions of territories.

Personally i think smart repairers are ten a penny. There everywhere and a you will have a lot of competition, I know there are a fair few vans that operate where i am based.

I did end up becoming a Franchisee with a world wide company that offered far more with no ongoing fee's and importantly no royalties or commission. I simply have to purchase my stock from them, But as they sell and manufacture the best products that the majority of customers prefer this is okay.

I done a lot of homework and research into franchising before i took the plunge and i don't regret it. Financially it has been a good decision, I should add though that i had previous business experience running a workshop so am ok with the business side of things.

My advice would be do your homework. Speak with current franchisee's not the ones the company put you in touch with. Look into the finances of current franchisee's, you ll find most will be limited so this is pretty easy to do using companies house or duedil.

You need to make sure that the Franchisor are not in the business of selling franchises over selling their product. This was the key for me, I chose the biggest tool supplier out there because their main aim is to sell tools not franchises and there selection process takes a year to ensure the people who join are dedicated and the right person for the job.

 

[AT700]

Hi,

In some scenarios I think Franchising is a good option but some I don't.

Here like many other franchises you'll have to pay an initial fee and then pay ongoing support fees.
If there's no garuantee of work supplied from the franchisor then why would you pay these fees?

Wouldn't it be more beneficial for you to start up on your own, develop your own business as you would with the franchise but save on having to pay any ongoing fees?

It may be a little tougher when starting out but in long run not only will you have created and established something of your own but you'll have saved a great deal of money too.

 

[Mitch3473]

Personally If you have experience in that area I wouldn't bother with a franchise. All the equipment,paint,colour charts etc etc and chemicals can be bought easily today. Back in the 80's I bought a franchise from an outfit called Rapid Paint and tacked it onto my valeting business. There was only Chipsaway operating in my area and business was good dealing mostly with the 'trade'. 3 years later everyman and his dog was up and running and the trade would take anyone who would undercut me by 50p per car.Even body shops had mobile units. Today there are thousands doing it and I would imagine competition is even more fierce. Having said that you could probably be up and running with a decent van for £10k including all your marketing etc and the profits would be yours and the one saving grace is that people are far more aware of the service nowadays.

 

[garyk]

I'd agree with the other posts that as this is a franchise that relies on your 'skills' rather than selling a product which is unobtainable unless you have a franchise (snap-on) then you might as well setup on your own and use the money you save from the franchise fee marketing your own business. Plus you have no restrictions whatsoever.

Unless its MacDs, KFC, Subway, Starbucks or Snap-on do not get involved in *any* franchise.

 

[Mitch3473]

Would tend to disagree. I've been involved in 3 franchise operations,all successful, for me anyway. Where franchises do score is training and selling, a subject that can be quite daunting whether or not you have the basic hands on skills. If you are confortable and confidant and can put yourself in front of the right people and market it correctly then go it alone. It's all down basic common sense.