Buying a Franchise, and how to buy a franchiseWant to be your own boss but concerned about risking it all in starting your own business? Buying a franchise is an increasingly popular and safer option when considering self-employment, and our franchise for sale opportunities continue to grow with the popularity of this form of business model.<
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 franchise opportunities boast a 90 per cent plus success rate, making owning a franchise business a very attractive proposition.
A franchise is a business system that has been proven and refined with a set formula that works. When you buy a franchise, there is usually support in the way of marketing, management advice and training. Buying a franchise will provide you access to a franchise license or agreement, which allows you to use the franchisor's business system, tools and 'know-how' often for a particular area. You will usually pay a fee for this and in some cases, also an ongoing royalty.
There are four main methods of franchising; all have different needs and terms of agreements:
Single-unit franchising - buying a franchise business that would allow you to operate your business in a specified location or area.
Sequential franchising - a franchising arrangement where you can add additional franchises to your business. Based on your success you can acquire more franchises, however now need to hire and manage employees to run your services or stores.
Area development - similar to sequential franchising but as an "area developer." Here the franchisor would provide you (in return for a fee) the rights to multiple franchises. The franchisor may seek a commitment on the how you develop your area.
Master franchisors - are often responsible for several other franchise operations and are like a franchisor in that they will usually be responsible for recruiting and providing ongoing support to franchisees. However in some cases they may only be responsible for a district and not the entire country.
Also determine if you should buy a new or green-fields franchise with a proven system but no immediate customers or cashflow. These will hold a little more risk but are usually a cheaper option than buying a franchise resale (an established franchise), which has an established customer base and cashflow from day one.
In buying a franchise consider your needs, skills, amount you can invest, managerial ability and ambition as these all play a part in determining what type of franchising opportunity best suits you needs. Check out our franchises for sale for one that suits you.
In buying a franchise you'll get:
- Proven business systems - tried and tested, allowing you to get involved in doing the business.
- Existing reputation – a market presence, brand reputation, and credibility to attract customers.
- A track record – evidence of other successes, your likely return, and the input required to succeed.
- Training and support – mentoring to get you started with tools and help to keep you in business.
- To be your own boss - Franchises offer a lower risk and usually supported business option.
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Before buying a franchise make sure you are doing something that works for you, and that you will enjoy. While buying a franchise is considered to be a lower risk option, like any business it is no guarantee for success. Before you decide to buy a franchise, you need to do your homework, and use professionals to assist you in getting it right.
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