What the Franchise Consultants won’t tell you and Why

The 5 things you need to know before you considering buying a Franchise!

Franchises are often portrayed as an easy option to traditional business and while it is true that they have some compelling advantages in terms of systems, branding, sales and marketing. As in any business success is not guaranteed and a great deal of commitment and hard work is needed to make the business work.  All Franchises are not equal and although many will succeed there are a large number that will fail and bankruptcy follows.  

Consultant Commissions



You need to be aware how the consultants are being paid. Are they working on a voluntary basis? Are you paying for their services or are they receiving a commission from the franchise owners. Are they brokers rather than consultants. If they are on commission they may be influenced by their commission rather than the suitability of the franchise and its match to your requirements.


Just in the traditional business most franchises will hRecruitementave an application process and these can be quite rigorous in terms of experience and financial status. It is in the interest of the Franchise Owners to choose the best candidates to minimise the chances of failure. Franchises, that are less particular about their recruitment process, should be objectively reviewed and ensure that your skills, experience and finances are relevant.


The franchise fee is just a small part of the investment nedownload (1)ed to operate the business. The true extent of the finances will depend on the size of the operation and the type of franchise, premises, number of staff, stock, equipment and also the capital required to cover the cash flow deficit prior to the business opening and supporting the business until it becomes profitable. Underestimation and lack of preparation of a contingency fund are often the cause of failure. Look at financial obligations like ongoing fees that may be liable even if the business is not operating. linked to this are your get out clauses.


Training is an extremely important part of any franchTrainingise and even more so if you are new to the franchise and have limited business experience. Some franchises over months of training but most the training is limited to a few days and is focused on learning the systems and developing a business plan that takes into account all the applicable restrictions. Lack of experience coupled with lack of training and support will make running a franchise a real challenge. Ensure that you have the relevant experiences and that you get a lot of training and support for all aspects of the business including finance and human resources as well as sales and marketing.


Although you will be responsible for the business many of Recruitementthe decisions relating to the operation will be out of your control. The image of the business, colours, decor, and products are examples of areas that you will have to follow the requirements of the franchise owner. You may also be tied to purchasing goods from their outlets or partners. Operating times, uniforms, and many other areas of the business may be impacted by the restrictions. Your territory and rights may be part of those restrictions.

when starting any franchise business it is important to examine the contract disclaimers and legal advice should always be sought. Be aware of the full financial as well as legal implications and what the franchise will and will not do.  Have you protected yourself by setting up the right company structure?

Consider an online franchise. Click here to find out more 

Recommended Posts