What to look for when buying a franchise?

We give you 3 tips for buying a franchise!

Many people buy their first franchise when they are working for someone else and are looking to start their own business and become their own boss. This is a big decision to make; as there is a large variety of franchises available in Australia. Should you aim for a product/service that you already know well, or should you consider learning new skills and jumping onboard a franchise that is on the rise?

Personal Suitability

One of the great things about buying a franchise is that you don’t necessarily have to have experience in that field. Franchisors will usually have a structured training program to ensure that new franchisees gain the skills and knowledge required.

However, this does not mean the decision can be taken lightly! Before looking at franchise opportunities you need to ask yourself:

• What type of skills do I have?
• What business types/industries would these skills be transferable to?
• Do you have management skills?
• Do you or would you enjoy managing other people, or do you prefer to work on your own or in a smaller team?
• Do you prefer to be working in an office, a retail environment, an industrial environment or outdoors?
• Do you enjoy physical work? Working with your hands? Or do you prefer less physical work, such as talking to people or working in front of a computer?

Review the Industry

After reviewing yourself, you should have some sort of an idea as to what industry/s you would consider. Some industries present far better opportunities than others!

Are there any serious threats to the industry? Threats include current competitors, likelihood of new entrants to market, or even new technology that may make your current business model obsolete (how many Blockbuster Video stores do you see these days?). Is the demand for this product/service growing, declining or is there a constant level of demand?

IBISWorld is a great place to start your research on industry outlook.

Review the franchise/s available within that industry

When you buy into a franchise, you are making a long-term commitment. Therefore you need to ensure that the franchise is likely to stick around for the long term and give you a solid return on your time and money.

Things to look for:

• Do they have a good financial history? (E.g. have they gone bankrupt, or had to borrow excessive amounts to keep their heads above water?)
• What are the backgrounds of the directors? Have they been previously associated with any franchises or business which have performed poorly?
• Does the franchisor currently have any franchises in areas which that have very similar demographics to the area you are considering? If yes, are these franchises performing well?
• Does the franchisor provide suitable training? What does the training cover? Does it include business administration/management? Is it once-off or ongoing?
• Does the franchisor provide marketing and sales leads?
• How many franchises have failed and why?
• Do you receive a guaranteed geographic area? Is it a suitable size? (Are you likely to be competing against another franchisor?)
• Read the legal agreements. Read these carefully and get a second opinion.

If you have found a franchise that meets all the following criteria, you may have found an excellent opportunity! While it will be hard work, and require a level of commitment that goes above and beyond that of an average job, you will have the opportunity to reap the rewards of your hard work!

Triple O Property Maintenance has franchise opportunities throughout Melbourne. Franchisees have the opportunity to work close to home in their own large, exclusive territory, receive induction and ongoing business, practical and WH&S training, and have leads and marketing provided. Find out what our franchisees have to say, or take our quick online test and find out if you have what it takes to become a Triple O franchisee.