Franchise Sales Advice and Opportunities

What is a franchise?

A franchise is a great way to get into business but not on your own. With a franchise you run the business, using the systems that have been developed, refined and proven by the franchisor.

There are many franchise sales opportunities; take care to research their performance and suitability for your skills and needs. Decide if you want a franchise resale (an established franchise business), which has the benefit of cashflow and clients from day one, or if you are prepared to develop a franchise from scratch by buying a new franchise with no immediate cashflow or clients.

Franchises usually give you exclusive ‘territory’ or ‘rights’ to use its brand, systems, technology, know-how or products for a defined term, that is usually on a renewable contract. Once accepted and signed up as franchisee you get training, operation manuals, generally marketing help and sometimes accounting or administration services. In return, you agree to run the business according to the franchisor’s systems and standards. You will usually pay a fee to buy a franchise and in some cases, also pay ongoing royalties.

Why get into franchising?

Franchising can be a low risk way of getting into business. Franchises are now believed to employ over 70,000 people throughout New Zealand and are responsible for over $10 billion of our national turnover. NZ franchises boast a 90 per cent plus success rate, making owning a franchise business a very attractive proposition.

6 good reasons to buy a franchise:

1. Something for everyone. There are a wide variety of franchise sales opportunities; franchised businesses range from multi-million dollar operations to part-time businesses run from a spare room at home.
2. Franchising is one of the safest ways of getting into business compared with start-ups or purchasing an existing business, and is usually quicker to turn a profit.
3. Franchises have a higher rate of success. A good franchise will offer you well tested and proven business systems with training, support and terms that will help you succeed.
4. A franchise will have history, an established brand, systems, manuals, and knowledge that has been developed and proven to work. Let someone else test the market and make the mistakes.
5. The franchisor will understand the market, and will provide support plus leverage via marketing, sales and advertising initiatives to promote the franchise brand and network.
6. As part of a franchise you are also likely to benefit from group buying power so your costs are less, and possibly gain better access to finance because banks like the franchise sector.

Before you buy a franchise consider your skills, needs, amount you have to invest, your managerial ability and ambition as these all play a part in determining what type of franchise opportunity is best for you.
Check out our franchises for sale for one that suits you.

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Before you buy a franchise do your homework:

• Decide whether franchising would suit you - running a franchise is not for everyone.
• Determine what you can afford - you have to pay for the franchise and will need working capital.
• Check what kinds of franchises are available - there is a huge range so find one that suits your interests and needs.
• Looks at different sectors - find out “who” does a good job, and about their concept, successes and failures.
• Pick the right franchise sales opportunity for you - running a franchised business can sometimes be hard work so you have to be fully committed to it, or it could become drudgery.
• Make sure the franchise excites you, and you feel the values of the organization are consistent with your values.
• Big brands can lead to big success - working under a well-known brand name such as McDonalds or Subway has obvious benefits for franchisees but no guarantees.
• Cost to purchase and ongoing fees: Franchisors will charge new franchisees a lump sum to start a business using their brand name. Sometimes there are additional costs where the Franchisors will take a regular slice of your takings as royalty fees - ensure you are happy with these.
• Check out Franchisor / Franchisee Relations. Find out if the franchisor is supportive, caring, trustworthy, responsive, effective and focused on the success of the franchisee.
• Know where to find out about franchising and get professional help. See our list of franchise specialists to help.
• Make sure it will provide the training and on-going support that you need to be a success.
• Talk to existing franchisees in this sector to find out what it’s like, what the rewards are and if there are any things to watch out for.
• What can you expect to earn from your investment? After all you have mouths to feed and a lifestyle to maintain.
• Have a professional check out the franchise agreement or licence and ensure you know what you are getting, how much it’s costing and what’s expected - what happens it if doesn’t work out?

1. Determine what type of franchise would best suit you.
2. Search our franchise for sale listings.
3. Contact the franchises that you are interested in.

Being a franchisee can be a safe and potentially very profitable career; however there can also be downsides. Before buying a franchise make sure you are doing something that you will enjoy and that will work for you. While buying a franchise is considered to be a lower risk business option, like any business there is no guarantee of success. Before you decide to buy a franchise, do your homework, and use professionals to assist you in getting it right.

More on Franchises

Check out our articles on franchise businesses for sale
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