Getting it Right: How to research buying a franchise

Off By Ed Hanna

The Military motto: ‘Time spent in recce is seldom wasted’ has never been more apt than when choosing a franchise. CEO of the BFA (British Franchise Association) Pip Wilkins, shares her 25 years of franchising experience in how to choose wisely and choose well.

The role of the BFA in British franchising
Founded in 1977 with a strapline: ‘Discover your tomorrow’, the BFA is the hub of franchising in the UK. The association strives to brighten people’s futures, by showcasing opportunities for businesses and individuals to transform their lives through franchising, while also providing an educational space and accreditations, governed by high standards and a code of ethics.

BFA franchisor members
So, how do you make sure you are buying a good franchise and not a dud? To start with, we’d suggest looking at our website: www.thebfa.org to see the list of our 300 franchisor members who have met and pledged to maintain our very high standards for ethical franchising.

Businesses inspected
Before membership to the BFA is granted, we inspect every nook and cranny of a franchise’s business, to ensure it is being run in a professional manner. But don’t let your research stop there, BFA member or not, it is imperative you do your own research to reassure yourself that the franchise is being run well and offering you a good chance to build a successful business.

Speak with the franchisor
Once you have identified the brands you want to talk to, it’s time to talk to the franchisor. Take a moment to understand the relationship between a franchisor and franchisee (you) before you pick up the phone. A good franchisor will not rush to sell you a franchise, in fact many franchisors turn down 70% of applicants, so consider this an interview of sorts. Equally you must feel comfortable with the franchisor. If successful, you will be invited to a face-to-face meeting and potentially to attend a ‘Discovery day’.

Speak with their franchisees
When the time is right, ask for a list of all their franchisees and try to speak with them all. If they are cagey about giving you a list, take it as a major red flag, because if the franchise is performing badly, the franchisees will be the first to tell you.

You should expect 5-10% to be unhappy and 90-95% to be generally happy (much like any job). Any more than that and you should be wary.

Potential problems to look out for
Here are some gripes you might hear and what could be behind them: ‘Not enough support from the franchisor’ – could mean a lack of cash to employ enough staff at head office or simply a franchisor that doesn’t care much about support. ‘Sales are bad’ – could mean the product is poor or the service not required. ‘No room for expansion’ – could mean the entire franchise network has been purchased leaving you with no room to buy more territories and expand your business.

A real gripe or a poorly performing franchisee?
As in all walks of life, some people are lazy and expect it all to be handed to them on a plate; if a franchisee isn’t performing very well, it’s easier to blame the franchisor rather than their own shortcomings. You can also get groups of gripey franchisees, so just because you are hearing negative things from more than one, doesn’t necessarily mean there is a problem, it could just be poorly performing franchisees looking for a scapegoat.

The grumbles to take seriously, however, are the ones that are repeated to you over and over again by franchisees in different parts of the country, in different geographical locations, e.g. countryside, town, suburbs etc. If everyone is complaining about the same thing, chances are it’s a genuine problem and should probably be seen as a red flag.

Take specialist legal advice
Finally, before you make any purchase, always use a specialist franchise lawyer to check over your franchise agreement. We hold a list on our website. Good luck in your research and don’t hesitate to contact our team for help, via: mailroom@thebfa.org

Case Study

Tim Corry, Guardian Angel Carers franchisee

Tim Corry joined the RAF in 2015 and piloted Puma and Chinook helicopters with 230 Squadron and 7 Squadron, leaving as a Flight Lieutenant in December 2022.

What attracted you to buying a franchise?
The quality of the parent company at Guardian Angel Carers and the support available to get going immediately.

How did you find your franchise?
After my Military career I stood for Parliament (sadly, I didn’t get elected); while campaigning I was introduced to the subject of social care and became increasingly frustrated that it seemed to be failing so many people. This led me to research the subject on the internet, where I discovered you could buy a franchise in the sector. I spoke with a couple of domiciliary care franchises and settled on Guardian Angel Carers.

How did you know it was the right franchise for you?
When I rang Guardian Angel Carers, they weren’t even selling franchises, but the positivity of the conversation I had with them was enough to tell me this was the company for me. I met their founder, Christina Handasyde Dick, who inspired me greatly. I had wanted to change the social care situation as a politician; now was my chance to do it as a businessman.

Why do you think ex-Military personnel make good franchisees?
I think Veterans are absolutely made for franchising. We like being led; ask any Military person to do a job and they will do it, brilliantly. We have so many transferable skills, particularly in people management, including the determination, tenacity, and resilience to succeed.

What are some of the best things about being a franchisee?
The support and knowledge that you always have someone to call for advice. Starting your own business is a scary thing, but with a franchisor beside you it is much less daunting.

What advice would you give to someone about to leave the Forces who’s thinking of buying a franchise?
Accept every piece of training and education you can get while in Service, it will stand you in great stead when you leave. Then, do your research, speak with other franchisees within the organisation and ultimately, be prepared for long hours and lack of sleep. It’s worth it!