Starting a business is a daunting, scary and stressful affair, especially when it’s your first. Even if you have the money, premises and ambition, what if your idea isn’t in demand? This is where franchising comes in.
Franchising in essence is renting the brand name, look and model from the franchisor for a monthly fee. The business is in your name, you own all equipment and make all the business owner decisions, but you’re following a proven model for success with brand support from the franchisor. Not only this, franchising also offers the opportunity to open multiple locations easily, providing you work hard of course!
So in this, we will talk about the upsides and downsides to franchising.
Your chosen franchise obviously must be successful to open more than one centre, let alone franchising the concept as a whole. The franchisor is essentially giving you a recipe for success, and as long as you stick to that recipe, and work hard, you will own a thriving business where the sky really is the limit!
People have been in your situation. Opening a new business and feeling in over your head. You have more questions than answers and you can’t seem to find those answers anywhere! Well, franchising comes with support to guide you through these difficult steps, a dedicated team on hand to help with any questions you could have.
While there are many franchises that you’ve never heard of, having multiple locations helps brand awareness and get word out there about the business. If a customer moves residence and they can no longer visit their old location, they may search for their nearest one and hey who knows, that could be yours!
Depending on what franchise you choose, depends on what type, and how much training you receive. Here at Gymophobics, we provide initial training for all our franchise owners and instructors. Then ongoing training is provided for the owners, while bi-annually top-up training is run for the instructors to ensure they remain highly qualified and knowledgeable.
For using the brand image and model, you must pay franchise fees to the franchisor. Every franchise fee is different, McDonald’s for example charge a monthly service fee of 5% of net sales and a further 12% to 21% for your standard franchising fees. Straight away, a possible 26% of your income goes to the franchisor. This is on the extreme side of course as McDonald’s can pretty much charge what they like, smaller franchises will have smaller fees but that is a set amount of profit going to the franchisor every month.
Let’s say you have an amazing idea to alter your business that you think could bring more customers in, just hold on a minute; you can’t! You’re paying the previously mentioned franchise fee to use the business model, so you can’t just go and change it when you like. You must keep within the brand look and model as stated in your franchise contract.
Now this can be looked at in a positive, or a negative light. Let’s say you sign a 10-year agreement to use the brand model and look, you have a business for 10 years, where the sky is the limit for profit. However, what if you are 5 years in, and decide you no longer wish to continue with this business venture? There of course exit clauses, but they will occur some costs to get you out of your agreement.
So it really comes down to what you want out of it. If you’re young, have limited, or even no experience in business, a franchise would seem like the obvious choice. You get support, a proven model and training to guide you through the steep learning curve of business ownership and management. It also provides invaluable experience and knowledge you simply wouldn’t have without owning a business. However, if you’re slightly older, or have plenty of business experience, it can easily be a 50-50. Franchises provide a less stressful business ownership experience which can be good, but if you have business experience, there may be aspects of the franchise you believe you could improve upon. Of course, you could always submit your ideas to the franchisor as a possible change, but you wouldn’t have full control over it.
At Gymophobics, we offer all the support and the lowest prices in the industry. From as little as £15,000, you could own your own centre and be your own business owner.