stepping into the franchising space during the pandemic


Many people are attracted to the franchising model, with good reason. This small business option is comparatively low risk. You get the chance to hit the ground running as opposed to starting from the ground up. Since you are part of an established brand with a set business framework and processes, you don’t have to struggle with aspects like advertising and marketing or training and set up.

The franchisor provides the support you need and a strong foundation so you can focus on running your business profitably. If you have always dreamt of running your own business, but with lower financial risk, franchising is a great option. But the pandemic has made people wary and many have put their business plans on hold.

While it’s important to be prudent, the past few months have shown that the franchising sector has fared much better overall than standalone companies and other similar businesses. Becoming a franchisee can be an excellent pathway to becoming your own boss. You can reap the benefits of a well-established brand with a recognised service or product and a good reputation.

You can streamline your business by using the operation manuals from the network. As mentioned earlier, you will also have support and access with aspects like marketing and advertising. While there are some distinct pros to being part of a franchise network, you must recognise that it gives you less control of where and how you run your business.

Tips To Follow

Like any other business venture, it’s crucial that you consult a franchising lawyer and business advisor so you will be on firm footing while venturing into this space. These are some things to consider before you commit to becoming a franchisee:

  • Learn all the things possible about the franchising business model and how it works.
  • Ask questions, clear any doubts you may have and ensure that you understand how this business model could impact the way you conduct business.
  • Once you have contacted a franchisor, go through the franchise agreement. This is the contract that you would have to sign and agree to for a specific timeframe. It would have all the details related to how you would operate your franchise.

    As stated, you must understand your responsibilities and rights under each clause. At the end of the franchise agreement, the franchisor doesn’t have an obligation to renew it. So, any goodwill and business that you have built can be useful if you want to continue with the liaison.

  • Go through the disclosure statement very carefully. All franchising businesses in Australia have to abide by the Franchising Code of Conduct. So, before you enter a franchising arrangement, you must read through the code of conduct as well as the disclosure statement.
  • It’s important to ask plenty of questions and make sure you understand how the franchise model could affect the way you do business.
  • Identify what your financial risks are, especially with reference to aspects that are out of your control. Things like the local and national economy and competition are some things that can change very quickly. Being aware of these risks is crucial when you are planning to become a franchisee.
  • There could be certain unanticipated costs that crop up during your franchise agreement term and you need to have extra funds to cover them. For instance, the franchisor might alter their branding, the appearance of their stores or even how certain systems function. Typically, you would be responsible for the costs associated with these changes.
  • Know that every geographical location will have very specific consumer demand patterns. One particular location or type of franchise could perform well, while others, not so much.
  • Every franchising network will have a specific supply chain from where you would have to procure the raw materials and products you need.
  • You also need to determine whether you would be able to recover all your upfront costs, while making a decent profit during the franchise agreement term.
  • In addition to all these things, you must understand your territory and be aware of all the outgoing fees. The one way to make a success of your new franchise is to go into it with your eyes open. If you want any more information about setting up a franchise, contact the experts at The Franchise Institute. You can call us on 1300 855 435 or fill-in this contact us form, and one of our experts will contact you as soon as we can.

    Thanks for reading,
    The Franchise Institute Team
    1300 855 435

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