What most prospective franchisees want to be sure of is that the franchise you are considering is a good opportunity – that everything needed for success exists. Here’s a checklist based on many years of franchise experience.

If you want to know that you’re looking at a solid franchise opportunity, check the following factors carefully:

1. Responsiveness – You want a quick, professional and thorough response to your enquiry and questions about the franchise. It is not a good sign for your future business if responses are slow, incomplete or unprofessional when you enquire.
2. Growth – This is especially important in the current economic climate. Are franchise unit sales growing? How have tough times affected the business? Have new franchises opened in the last year or two? What opportunities are there for your business to grow within the franchise, e.g. start from home, build to a commercial operation or own multiple units?
3. Product/service – The customers need to give rave reviews about the franchise’s products / services – check out client testimonials here. To stand still is to fall behind. Does the franchisor regularly introduce new products or services? How does the range of products or services compare to other franchises in the sector? See how Smart compares
4. Management – Check the franchisor has enough experience as a franchisor and business owner to give you the support you’ll need in a new business. Make sure that you’ll have easy access via email, skype, phone, etc. to management at the franchise office – and that you can work with them. Check out an experienced Management team here.
5. Visits & meetings – You’ll have the best chance of success if the franchisor visits the franchisees on a regular basis and provides improvement suggestions, and has regular meetings to get feedback from franchisees – weekly skype or phone calls, monthly franchise owner conference calls, a regular schedule of visits to your franchise and an annual conference.
6. Comprehensive training – You need to make sure that the franchise training program covers all that you’ll need to successfully operate the franchise. You’ll need operational training to learn how to deliver the product or service, and you’ll also need to learn general things about running a business – marketing, sales, employing staff, payroll, how to manage the business accounts. What software and technology does the franchise use to improve business efficiency and results? Make sure these areas are all covered in training so you are completely prepared to run your new business.
7. Marketing - What does the franchisor do to help generate leads for your business, and what flexibility will you have for local marketing and advertising?
8. The attitude of the existing franchisees – This is the most important indicator. In a good franchise the majority of franchisees are happy with their business, satisfied with the training and support, the marketing, the results they are achieving and the relationship they have with the franchisor. Are there a number of franchisees that have been there for a long time? Check out franchisee feedback.

When you find a franchise that scores well on these indicators, you have indeed probably found a solid franchise. Any other signs you would add to this list?

What are the advantages and disadvantages of buying a franchise vs. buying an existing stand alone business?

Deciding whether to buy a franchise or buy an existing business can be a difficult decision because both a franchise and an existing business are alike in many ways:

Both are (presumably) successful business concepts. If they weren’t, you wouldn’t be considering them now.

Both require you to pay a premium to acquire that successful business concept. You’ll pay goodwill or franchise fees for the previous track record of successes.

Both have name or brand recognition. The existing businesses name may be recognised locally while the franchise will have local and possibly even regional or national brand recognition.

Both may provide some initial training. Training will be an inherent part of a franchise purchase. Training generally isn’t included in the purchase of an existing business but can be structured into the deal by retaining the seller to stay on for a period of time (vendors assistance).

Here are a few things that buying a franchise will give you that buying an existing business won’t:

Ongoing management support. One of the key benefits of a franchise is that the franchisor will give you management support for the term of the franchise. Even if the seller agrees to remain for a period of vendors assistance when you purchase an existing business, that is for a limited period of time. After that, you’re on your own.

More exposure. A franchise will usually provide more exposure to potential new customers through brand name recognition and national promotions such as email newsletters, website, and readymade marketing tools.

Lower costs. A stand alone business does not have the purchasing power of a group. Franchisors will negotiate with key suppliers, so you can all take advantage of group discounts.

Less risk. A franchise is based on a previously successful business model in many locations. In comparison, an existing business has no history or experience other than its own. Although an existing business is successful for the current owner, that success may not transfer over to a new owner (you).

Complete business system. A franchise will provide you with a complete business toolbox – operations manuals, training to teach you about operating the business and the tools to do it with – even if you have no prior experience.

In choosing between a franchise and an existing business, you’ll have to decide whether these extras are worth what you’ll pay for the franchise, versus the cost you’ll pay for the assets and goodwill of an established business.

Looking to buy a business? Check out these Franchises For Sale and Business Opportunities available nationwide. Get FREE franchise information today!

What are the pros and cons of buying a franchise vs. starting a new business from scratch?

In deciding between purchasing a franchise and starting a new business, one of the best places to start is to ask yourself this question:

Q – why do you want to own a business?

A – You want to be your own boss. If your answer is that you want total freedom to do your own thing, in your own way, maybe you should start your own business and go it alone. A franchise will provide standard procedures and business systems that determine much of what you have to do, when you do it, and how you do it. That’s their proven recipe for success. If you want to own your own business but have a support team, and don’t want to have to re-invent the wheel, consider a franchise. You’ll get the format for opening and running your business, guidelines and advice. You should look particularly hard at franchises if you don’t have a great deal of hands-on experience running a business.

A – You want to try out your own ideas. If your answer is that you want to put business ideas you already have into practice, a franchise may not give you the opportunity to fully utilise these ideas (try telling McDonald’s that their golden arches ought to be purple with green polka dots). You may be better off starting your own business. Some franchisors are more flexible than others. Check how aligned their ideas are with yours and whether there are opportunities for franchisees to contribute to the business system and brand development – usually via a franchise advisory group.

A – You want to make lots of money. If your answer is that you want to secure your financial future, you should look long and hard at a franchise. Franchises don’t necessarily make more money than other types of businesses, but they do have higher success rates. You’ll pay for the higher success rate in the fees you’ll pay to the franchisor. Franchises allow you to build the value of your business by combining your own business results with the added value of their brand.  Their systems make it easier to transfer your business to a buyer for a capital gain in the future.  Banks are more likely to favourably consider finance applications for a franchise with a proven system and a track record of success, than for an independent business – especially if you have never been in business before.

Looking to buy a franchise? Check out our Smart Franchise Opportunity and get FREE franchise information today!

Click here to use our FREE self assessment tool to help you decide whether a Smart franchise is for you!

1. Thriving industry

Select an industry which is currently performing well or will in the near future.  Is it stable?  Consider sales and investment levels, potential of that industry. Are benchmarking statistics available on the industry? If so, how does the franchisor compare?

2. Growth potential

Is there a large fragmented market? For example, New Zealand is predominantly a nation of small and medium sized businesses –  there are over 470,000 businesses with 93.9% employing less than ten people. Has the franchisor recognised a significant gap in this market?

Is there a growth trend?  What trends could impact this business going forward? Will those trends contribute to business increase or decline? E.g. the world outsourcing market grows 11% yearly. Business process outsourcing has experienced exponential growth in the past decade.  Despite the recession, business processing still needs to be done. Statistics show that there are more and more companies trying to cut costs by outsourcing.

3. Technology advancements

Today’s technology and internet access provide businesses with the ability to work from almost anywhere in the world, anytime. This has changed the “rules” and many businesses no longer operate from a brick and mortar office or at set times. If a franchise relies heavily on technology, how will you and the franchisor keep equipment up-to-date and what will it cost? Is technology used to improve your business efficiency and provide information that’ll improve your business results?

These are three key factors to consider before buying any franchise in todays market.

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Two things stand between most of us and our ideal business: First, we wouldn’t know it if we fell over it. Second, our minds are filled with barriers— beliefs that prevent us from getting what we want.

1. List what your business would be like if you could wave a magic wand and have exactly what you want.

Write down the number of hours you want to work, the type of work you want to do, the time of day or night you work most productively, where you want to work (professional high-tech office, or home based),  whether you want to work alone or with others and how many others. Write everything down — the more details the better.

2. Be willing to change your business or place of employment.

If the type of work environment you desire can’t possibly occur in your present situation, have the courage to leave.

Other articles you may be interested in:

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Which is better: job or franchise

4 top reasons to buy a franchise

According to Greg Nathan of the Franchise Relationships Institute it is a well researched fact that self employed adults are significantly more satisfied with their work than corporate employees, despite facing higher levels of financial stress and longer hours.

You may think this is because they are making more money, and of course franchisees want to make money, but most are also strongly motivated by the following four factors:

1. A desire for independence and flexibility. Many want to buy a franchise to escape the politics, rigidity and frustration of working for an over controlling boss.
2. To achieve a personal challenge. They are highly motivated by benefitting from the  results directly generated by their own hard work.
3. To make a difference. Many franchisees treat their staff as extended members of their own families and talk passionately about the satisfaction they feel in helping clients and making a contribution to their local business communities.
4. To achieve the respect of friends, family and peers. Never underestimate the importance of status and pride. People buy franchises because they want to be associated with successful brands and business models. Because they want to be a white collar professional business owner. Because it’s something they feel excited and passionate about – proud to be associated with and comfortable talking to anyone and everyone about.

If you’re looking for independence and flexibility, want to make a difference to New Zealand business owners, and seek a white collar professional business opportunity  - check out Smarts franchise escalator programme

Click here for Greg’s full article

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Are you cut out to be a successful franchise owner

In this climate, the question of whether to choose a job over a franchise changes because the goalposts have moved, along with the ‘usual’ pros and cons.

The greatest advantage of a job has always been that it is perceived to be a lower risk.

Usually a job guarantees an income in exchange for work, with little risk of losing the job unless the employee decides to quit. Most people are naturally attracted to this promise of financial safety.

But times have changed and these assumptions are being challenged. If the long term continuation of employment is in doubt, if the compensation and benefits of employment are lowered, or if career pathways are blocked because the people above you are staying right where they are – the safety of choosing a job over a business is considerably lessened.

In this market, many people are coming to believe that the job they once viewed as the safe option is in fact an illusion.

The advantages of a franchise, on the other hand, have always been threefold.

First, it is assumed that the business will produce a significant income, though the owner will typically have to work very hard building the business before this income becomes a reality. Second, the business will create wealth by building an asset that can be realised when the business is sold at a future date. Third, there are tax advantages available to franchise owners that are not available to employees – particularly for a home based franchise.

The advantages of franchise ownership can still hold true in today’s market, but prospective franchisees need to be far more careful in selecting the right opportunity. Verify all your assumptions and determine exactly how the business has done during these hard times.

If you use this level of care in investigating a franchise, the best course for you may in fact be a franchise business rather than a job.

The reality of threatened job losses or blocked career paths has become the game changer for many Kiwis who are evaluating their plans for the future – and encouraging more and more of them to take their own shot at the New Zealand dream of business ownership with a franchise, not a job.

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Why Smart is a top business opportunity

The sheer dread of returning to an unrewarding office job after the Christmas holidays, combined with New Year resolutions, spurs many people into action to become their own boss.

According to Adrienne Pierce, founder of Smart, “We certainly see an increase in franchise inquiries in January as people are back in the office but aren’t really enjoying being there. This is the best month to act,” she says. “Start researching business opportunities and talking it over with friends and family as you’re getting back up to speed this month. Develop your game plan and lay the groundwork to make your move this year.”

When Is the Right Time to Start a Business? Now.

Now definitely appears to be a great time to start a business. And the current economy is a big part of the reason for that. There were fewer new businesses opening last year. This is important, because it means less competition for employees, customers, attention in your marketplace, and everything else you might need to get your business off the ground.

And, while the bank finance tap is not flowing as freely as it might have in the past, finance is still available out there to the obviously great businesses and business buyers.

So if you have that urge to own a business, we can’t think of why you wouldn’t get started. Now.

Take the leap

The hardest thing you’ll do is to take the leap. If you don’t leap into business ownership, you’ll be depending on someone else for your earnings for the rest of your working life – a life’s work without ownership or upside.

You’re better than that. That’s why you’re reading this article. So go for it.

If you’re ready and willing to start a business this year, why not try a Smart franchise? Check out what our franchise owners have to say

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7 reasons why now is a good time to start a business

Finding the right franchise

Will a franchise suit your lifestyle?

Do you love to watch the kids play rugby every Saturday morning? Does your club meet every Thursday evening?  You may well not be able to do that with a retail business.  Do you want a seven day a week business, or your weekends free?

Our franchisees enjoy lifestyle hours

Choose which of the following two options will suit your lifestyle and business aspirations:

As a Smart home office franchise owner you work the hours and days you choose from home. You don’t have to have a retail location and need very few employees, if any.

A Smart commercial office franchise is open during normal business hours, five days a week with weekends off. You can have employees to deliver the services while you manage the business.

Not 24/7. Not retail or mall hours.

All Smart franchises close over the Christmas and New Year period so you can relax and unwind with your friends and family…and prepare for the next year in business.

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Smarts escalator programme – from home to commercial office

Even when only one member of a family is directly involved in the business, support from the rest of the family is still critical. Include them in your decision to buy a franchise.

Do you have the support of your family?

Ask your friends and family what kind of business they see you succeeding in, and listen to the answers!

How does the family feel about your choice?  What does your partner think?  Are they completely supportive?

Can they help you when you need them?  Is your business plan based on them participating? If so, what happens to the business if they change their mind or have other commitments? 

Most franchisors interview both partners.  They know that even if you work hard you’ll need the support of your family to keep up the effort in running your business and making the business work. Do they share your commitment and vision?

Who will do what – in the business, and at home? If you are relying on a family member to do the bookwork at home – do they want to do it? Are they good at it? If not, what impact will that have on your business? Business service franchises can provide practical day-to-day support for you as a business owner.

Remember why you’re going into business in the first place.

If you ask any business owner why they work for themselves the responses are pretty much the same – to make money, share it with those they love, spend more time with family and friends, have the freedom to do what they want when they want…to build something that can ultimately be managed or sold. That’s a lot easier to achieve if you love what you’re doing, and you’re family is right behind you every step of the way.

The message is clear. Don’t underestimate the impact of family issues on business success.

Other articles that may interest you:

Finding the right franchise

How to buy a franchise

Working with your family by Greg Nathan