Has lockdown made you reconsider your life…? Could a franchise help you realise your dream of owning your own business.
Are you considering franchising as a way to start your own business…..
….. of realising the dream of handing in your notice….?
….. or, getting back up and running after being lay off, to show people what you can do….?
…….then you must understand the costs involved, BUT more importantly why you would invest in a franchise.
The basic upfront cost of any franchise is only part of the overall financial obligations and commitments if you join a franchise, and a small part of the overall package, YET it is one of the biggest deciding factors for many.
You see, most of us understand the value of money because we can all see the figures. For example £10,000 of cash = £10,000 in value (nothing more, nothing less).
Now for your £10,000 could be a life’s savings and for another it could be a months salary so I do understand that money has a relative value to each of us.
But why does EVERYONE focus on the cost of the Franchise ahead of anything else…?
As I say, the initial Franchise Fee is only part of getting into a franchise and there are so many aspects that should be considered.
You are not simply a product from Amazon or Ebay.
Please do read my other blogs in the series Financing a Franchise and Is Now a Good Time to Start a Business?.
And, the one aspect that is not fully understood is the knowledge that is imparted during the training and beyond. It is this knowledge and know-how that you are investing in so that your business gets a head start.
I mean, how do you value the ability to be set up, trained and trading within 3 weeks of starting your own business….? How much is that worth…?
How do our value the sharing of knowledge and capability that will mean more leads and more business from the start…?
How do you value the 25 videos recorded during Lockdown that could in themselves provide you knowledge to pay your franchise fee back multiple times if you follow the actions and activity shared…?
How do you value not making the same mistakes as others that can cost you £000s…? That said even as a franchisee you will make mistakes. No matter what we teach people do have a habit of burning their fingers in the fire, despite the nurturing warnings of “don’t play with the matches”….
How do you value the combined business experience of the network of other franchisees that runs into hundreds of years……?
You cannot buy this stuff on Amazon!!!
Last year we were chatting to a prospect about joining as the franchisee despite the fact that he had already built his own business without a franchise. He was now looking to expand his current operation into new geographic areas and wanted to buy into the franchise. When I asked “why do you want to join a franchise if you already have a successful business…?”. His answers was “because it will save me a lot of money…..”.
His assessment was that the time to build a presence, reputation etc… in a new area would end up costing him more money than buying into a brand and getting a warm start.
He knew he wouldn’t need to spend so much on marketing, he knew we would take care of stuff behind the scenes and he knew we would be earning quicker as part of the franchise. Less outgoings and money coming in quicker….. win / win.
OBS – For the sake of clarity the person did not join the franchise as we felt there would be a conflict of interest with the persons current operation being in the territory of a current franchisee. Nevertheless I think it highlights the point.
And while we talk about all the value passed onto you in training and throughout the franchise you should not forget that the purchase of a franchise is an “investment” that can be sold to another person.
For example our franchise currently sells for £16,500 plus VAT. Of this we put an estimated price on training and onboarding at £6,500 plus VAT and £10,000 plus VAT on the franchise ownership (the territory). Essentially the training is a one off cost whereas the £10,000 asset that can increase in value as you grow the income and profit within the franchised area.
So if you are thinking of starting your own business then franchising could be just what you need and while you will need to invest in the right franchise, it is likely to pay back quicker than you think.
For more information and advice give us a call.