Franchise Exhibitions & The Pros & Cons of Franchising
8g) Is it My Business to do as I Will?
You are always under some degree of control and this could mean growth, sales target levels, opening days and, of course, an on-going fee.
8h) What if I Want to Quit?
If you feel that you cannot continue, or it is not profitable enough to carry on, the Agreement should allow a sale to a new franchisee. There should not be high transfer fees and the franchisor should not be allowed to refuse a fair and suitable applicant. The franchisor may have first refusal, and you may want an arbitration clause in the Agreement if you cannot agree on valuation.
8i) Launch
The franchisor should have a planned launch campaign that has been used in similar circumstances and has proved to be successful. This period in any business is crucial: being exceptionally crucial to a franchise as you are letting people know that a recognized brand leader is now operating in their area. Maintaining a high-profile for the first few months, at least, is a cost you must budget for: if you don’t need the anticipated budget, great! Even brand names have to go and get customers and you will soon see the tie-up between marketing budget and revenue.
8j) The Pros and Cons
Pros: Proven brand and product, your own business and own boss, product and management support, purchasing power, marketing power.
Cons: You still answer to someone, must use franchise supplies, continuing fees, local competition, lack of marketing, poor and costly service backup, renewing Agreement every 1, 3, 5, 20 years? The ‘pros and cons’ are subjective as a franchise is a franchise: you enter into an agreement and you know the rules, and those rules are unlikely to suit you 100%. If you are an ‘entrepreneur’ you may never be able to settle into a role where you have an ultimate boss: likewise, if you are a competent manager you may relish in the opportunity of ‘running’ your own business with the support of a large organization!
8k) Visiting Franchise Exhibitions
Franchises, like most business that are for sale, can be found in a range of different media but keep an eye out for those franchise exhibitions that are regularly held all over the country. These exhibitions allow you to meet the franchisors who will set up their own presentations and will be far more informative than say, reading an advert in a newspaper. They will give you a chance to learn about the franchises in more detail and will also give you the opportunity to speak to the franchisors personally. Exhibitions will usually be attended by a number of franchisors and therefore it is important for you to prepare which type of franchises you are looking for. Preparing will allow you to confine your time into those franchises that are more suited for you: otherwise you may waste time being talked into something that you have no interest in at all. You should also compile a list of questions that you may want to ask the franchisor should they not cover any of your concerns in their presentation.
When attending the exhibition, take notes and collect as much promotional information as you can to help you review the franchises in your own time. It is also an idea to take the franchisor’s business card so that you can contact them if you have any further queries. Be sure that you visit each presentation for every franchise that you have interest in: do not feel pressured if the franchisor claims that there are limited offerings and time is of the essence (this is rarely so). Give yourself the time to visit and compare the franchises and be confident that you have chosen the one that is best for you. Should you decide at the time that you have found the franchise you are looking for, there is no need to sign a contract or make any payment (see next heading) until you have investigated the franchisor’s offerings in much more detail.
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