Chris Roberts, co-owner of Franchise Finance Limited has specialised in the franchise market since 2004.
Chris has successfully helped hundreds of people to start and grow their franchise businesses. Reed Commercial interviewed Chris during the National Franchise Exhibition.
We asked for his expert advice.
What do you think the financial benefits are of becoming a franchisee?
‘Statistics show that the failure rate for businesses that are not franchises is very high. 90% of businesses that are franchises are profitable and around 85% of franchisees are happy with their franchisor.
Good franchises are basically businesses that have been proven as a successful format. There is guidance and support given [to franchisees] and ultimately that means that the chances of success are going to be much higher.’
What would you advise someone before they become a franchisee?
‘Well before you actually part with your money, I would say that it’s important to research the franchisor.
Make sure that they’ve got enough money themselves to be able to deliver the promises that they’re making on their websites and glossy magazines.’
What’s the best way of getting that information?
It’s important to ask for contact details of franchisees that are currently trading within that network. Visit them and ask them questions.
Don’t just rely on two or three specific names that a franchisor gives you. Choose the ones that you see, so that you are not being shepherded towards someone that is a fan.’
Do you think franchising suits a variety of different lifestyles?
‘There are franchise opportunities to suit a part time lifestyle, I would say in the main, certainly the franchises that I’ve come across, require your full attention.
Once you embark on your own business, you’ll probably find that you end up working more hours than you did for somebody else.’
‘The fact is, you’re working for yourself – you may be working extra hours, but you’re the person that’s going to benefit from it.
If it’s something that you enjoy doing, that inspires you and floats your particular boat, you will actually find that you don’t mind extra hours.
Do you need to understand business to become a franchisee?
‘There is a requirement for somebody who is going to start a business to have three characteristics:
They’ve got to play the part of a manager, they’ve got to play the part of a technician and, they’ve got to play the part of an entrepreneur or sales person.
What financial advice would you give to a franchisee?
‘You have got to be really organised and make sure that you have a good business plan.
You need to make sure that you have got enough working capital, so that when you turn the corner and there’s a big bill ready to pay, you are ready.
Finally, you need to monitor your progress as you go against your business plan. Make your mistakes on the computer rather than in real life, as it’s a lot less expensive that way.’
Want to find out more about how to finance your franchise dream? It’s time to explore the franchise business plan.Tags: business, financial, franchise, franchise finance