Franchising 101: Finding The Right Fit
To franchise or not to franchise
Deciding on whether to start your own business or become a franchisee depends on many factors, but the most important is your personality. If needing to make decisions on every detail of a business is essential to you and deep down you know you could have difficulty following someone else’s direction, especially when you don’t agree with them, then franchising may not be for you.
Having said that, becoming a franchisee of a solid, reliable franchise system offers many advantages over starting your own business. It removes much of the guesswork of running a business and helps you avoid most of the mistakes that independent startup business owners make. Top franchisors offer a recognised name, a successful concept and a proven business model, and they provide training and support. Part of what you are investing in when you join a mature franchise system is a proven system of operation that already works, making it a recession-resistant model that is especially relevant and attractive in the current economic environment.
Thorough research and due diligence are essential when making your franchise investment decision. Put in the time to get the information, assess it and reassess it to make an informed decision. One of the first considerations when selecting a franchise system is deciding what sector to buy into. In this new normal, there are some sectors that are expected to thrive:
- During recessions, automotive franchises tend to thrive as people generally take longer to replace their cars, resulting in vehicle repairs and maintenance being much-needed services.
- Increasing consciousness of health, fitness and personal appearance has boosted the demand for professional services of this nature. Male grooming salons, in particular, are on the rise.
- Covid-19 has highlighted the need for cleaning and sanitation, both at home and in the workplace. Even when lockdown ends, our new hygiene standards mean cleaning, hygiene and sanitation are viable businesses to invest in.
- In the current economy, our homes are our castles. With people spending more time at home, they’re spending more on DIY and upgrading their homes, which is good news for businesses such as hardware and DIY stores and nurseries.
- There is amplified demand for independent education solutions providing individual attention, quality of learning and a safer environment. Tutoring and other educational support franchises are in high demand and will remain so in the years to come due to the education deficit caused by lengthy school closures.
What about the money?
Look beyond the initial investment needed to buy into a franchise, usually listed as the franchise fee and cost of equipment. Getting a franchise up and running can involve hefty upfront costs and the need to survive on break-even books, or even net losses, before your business catches on. Even if you’re franchising a well-known brand with considerable marketing support behind it, customers have to discover your new location. Fortunately, Nedbank recognises that franchises are relatively safe business opportunities, so financing is readily available.
Nedbank has a highly experienced, specialised division that fully understands the challenges and opportunities faced by the franchise sector. Talk to one of our Business Managers or contact us on email@example.com to find out more about how we can help you grow your franchise business in 2021 and beyond.