General Business and Finance Blog

The purchase of a courier franchise business is different from the purchase of an independent business. As a franchisee you will be party to a long-term relationship with your courier franchisor and you will agree to run the business in accordance with the franchisor’s system.
Buying courier franchises has the advantages of offering many benefits, such as:
A uniform, consistent business that often relies on a successful formula
Support from the franchisor in respect of knowledge relating to management, industry, marketing, advertising and buying power
Use of an already established business name and format and a reduction of business risk
It also involves the payment of fees and/or percentages of turnover to the franchisor, a reduction of independence through franchisor control of management, and there may be factors that adversely affect a franchisee that are outside its control, e.g. reputation risk.
Before buying into a franchise you will need to evaluate the franchise opportunity. You will need to assess the business itself, the franchisor, other franchisees within the system, financial matters, what your obligations and entitlements will be, and decide whether you want to be a franchisee. You will need to consider the advantages and disadvantages of a franchise business, and have read and understood the franchise agreement and disclosure document provided by the franchisor.
Make sure you obtain relevant information
The following are important factors you must give consideration to.
The information provided in the disclosure document. This will give a useful insight into the current status of the franchise system.
The business model – How successful is it? Does it have a solid business plan and marketing strategy? Is there a demand in the marketplace for the goods or services on offer? Are there other competitors?
The track record and/or reputation of the franchisor – How long has it been in the business? What are its motives for franchising? Has it complied with the laws in relation to the business?
The support the franchisor will provide to you – Product supply, service support, advertising, marketing, reputation, site location, operations manual, policies, guidelines.
How other franchisees are faring in the same network? The franchisor is obliged to provide you with details of other franchisees in the network in the disclosure document. You should be able to contact franchisees directly and ask frank questions about their experiences.
How much will it cost? This includes start-up costs, working capital, operating expenses (including administration, marketing, staff, signage, customer service expenses), royalties, and other associated expenses.
If goods are supplied by the franchisor – What are the terms of trade? Can you purchase goods from outside the franchise network?
The franchise agreement – What is the term of the franchise? Can it be renewed? What happens when the franchise ends? What are your obligations?
The location of the courier franchise – Where will your franchise be located? Is there a lease on the property? If so, can it be assigned? What territorial rights will you have? Are they exclusive? Is the territory clearly defined? Will you have a choice of territories?

Because his money is involved, a prospective franchisee must be extremely careful in scrutinizing franchise offers. He should have a ready set of questions that the franchisor must be able to answer convincingly and show basis for his replies. Some of the important questions to ask a franchisor are:
How long has the franchisor been in the business? How many franchises are there at present? How many have failed? The answers to these questions will give the franchisee an overview of the business and its present franchise network.
Specifically, what will the franchisee get from paying the franchise fee? The franchise fee is usually a large sum of money paid to the franchisor once the agreement is signed. Therefore, it is important to know the advantages that the franchisee will be getting in return.
How intensive and effective are the initial and continuing training programs of the company for opening and running the franchise unit? The quality of the training programs of the company for start-up operations and running the business smoothly will determine the ease or difficulty with which the franchisee will run his unit.
What support services can the franchisee expect from the company on an on-going basis in terms of helping him deal with problems that may crop up in the course of the business? Continuing support from the franchisor is essential for the unit to run as projected. The franchisor must be able to enumerate in detail the support services that the company will provide in a variety of scenarios wherein the franchisee is confronted by different problems relative to the business. These problems may concern labour, customer complaints, equipment breakdown, and stock shortage.
Is the central management transparent in the appropriation of pooled funds for advertising and promotions? Did the past marketing programs of the company have a positive effect on sales? Part of the unit’s revenues is paid to the franchisor for the company’s advertising and promotions, therefore, the franchisee must know how well the company handles this fund and if its past marketing programs helped boost sales for its franchisees.
Is there a guarantee from the franchisor that the quality of the products and services offered by suppliers through him will be consistent and delivered promptly? The reliability of suppliers will be a big factor in the successful operation of the business. Hence, it is important that the franchisor is willing to guarantee the dependability of his suppliers and the quality of their products and services.
How long will it take the franchisee to recoup his investment? Naturally, every franchisee is very keen on knowing the company’s projection on this matter. The franchisor’s estimate must be supported by documents giving credence to his projection. However, it would be wise for the franchisee not to merely take the franchisor’s word for it but to research on the matter with other franchisees.
How well has the company studied the marketplace in terms of the ideal number of franchises in a given area to ensure the success of each? Is there a guarantee that the company-owned unit will not compete with the franchises? If it does, what will the company do? There are instances wherein the mother unit directly or indirectly competes with its franchise perhaps due to lack of a proper market study. In any such case, the company must be prepared with a viable solution that will be beneficial to both parties.
How receptive is the company to the idea of adapting its products and systems to the culture and preferences of the market in a given location? If the franchisee is considering a business site wherein the culture and preferences of the people are markedly different from that where the mother unit and other franchises are located, it would be detrimental to the success of the franchise if the company will persist in strictly adhering to its original product line.
A franchisee must carefully list the questions before arriving at the final decision. The aforementioned questions are only some of the most basic among the crucial questions that a sensible franchisee must ask. The manner by which the franchisor answers them can help determine the level of his sincerity. In addition to asking the franchisor, the franchisee will be able gather valuable insight into the actual state of the franchise from the other franchisees themselves. More often than not, they are more than willing to share their problems, frustrations, and advice. Asking the right questions will certainly help the prospect make the right decision

Delivery franchises are a good business model that lets you tap in the resources of a successful business. All you need is to meet the requirements of your franchisor and you’re set to start a brand new delivery franchise. A delivery franchise also minimizes the risks of failure by letting you use the tested procedure of your franchisor. You need not worry about how to run the delivery franchise because the necessary training will be provided. Likewise, you will also be able to source the raw materials from a trusted supplier so you need not worry about the quality, price, and delivery options of your supplier because all these are already made available for your convenience.
While statistics suggest that the success of a delivery franchise is greater than that of an independent start up business, it is also important to note that this success cannot be easily duplicated without perseverance, dedication, and hard work. These characteristics are needed to succeed in this endeavor. The success of a delivery franchise would also be dependent on other factors like the location, the demographics in your area, and the living standard where your outlet is located. For example, if you are selling high end products then it is not going to sell in a low end market. But the franchisor would also give you assistance in determining which area their franchise would most likely be successful so the risk of establishing an outlet in a wrong location is minimized.
Delivery franchises also gives you several benefits including being able to use the trade name, the logo, the marketing concept, and you will also benefit from the advertising that your franchisor does. Another advantage you will gain from availing of franchise opportunities is that the products or service you will sell already has public recognition and acceptance. In addition, your franchisor will provide for the necessary training that you need to run the delivery franchise.
The franchise cost of availing of a devlvery franchises opportunity would vary greatly on how popular the establishment is. The kind of product or service that you are interested in franchising would likewise be a factor on what the franchise fee is going to be. Most franchisors also require that you pay a royalty fee to them for every product that you sell. The royalty fee can range from two percent to ten percent, sometimes even greater depending upon what you agreed upon. But depending on the kind of establishment you are interesting in franchising, the royalty fee is overall a small price to pay to have the right to run a successful and popular business establishment.
Most delivery franchises also have a successful formula that enables them to compete in the market. And being a franchisee of these establishments will give you the edge over the competitors in your area that provides a similar product. It is no wonder then that franchising is a widely popular business model that is adapted from a variety of business establishments all over the world.

Kids franchises have to be one of my favourite franchise opportunities on sale in the UK today. Quite simply they are all bright, fun, loud, in your face and in all cases I have seen, run and managed by caring and considerate franchisors.
Ranging from education franchises through to care, sports, music and arts there are a multitude of options to choose from.
Deciding on which one is for you can be difficult so really it’s a case of matching your own interests with your investment level to the corresponding franchises to narrow your list down some. Hopefully after doing this you will have at least 3 to ponder over. From here it is time to get a collection of franchise packs and begin your research.
With your 3 + packs in hand, review the procedures, training options and monthly management / license fees and weed out any which are immediately unattractive to you. What you should be left with are your prime choices and it is now time to contact the franchisor direct to organise a meeting.
Come prepared! Before you go write down a list of questions, some / all of the following should be included:
1. How long have you been in business / how long have you been franchising? Reason: You want to establish 2 things. 1, was the business a long term profitable company BEFORE they franchised or were they a “made to franchise” business and 2, Are they a new company starting out in franchising, if so then they may well be a little inexperienced.
2. How many current franchisees do you have and can I have a list of ALL their contact details. Reason: You can pick a few at random to phone and ask them about their experiences, the ups the downs etc.
3. How many franchisees HAVE you had… i.e.. What is the turnover rate of franchisees. Reason: A turnover rate shows an unhappy franchisee base.
4. Out of the current franchisee list, how many are profitable according to your financial projections? The reason for this is: Some franchisors boast a large franchisee base but this could be due to their selling powers and not the profitability of the franchise.
5. What is the policy on
a) Territory size
b) Exclusive territory
c) Reselling my franchise
6. What previous companies have they owned and were they franchised businesses too. The reason for asking this is: Are they in the habit of creating businesses to franchise, making some money and moving on leaving their franchisees in limbo. Yes, this happens.
7. What marketing campaigns are done on my behalf and what will I be required to do myself? Here you are looking to learn more and national advertising done by the franchisor and what systems they recommend for local advertising.
These are just a few questions and you will have many you will want to ask however I would recommend getting the answers to the above so you can feel sure that this is a long term opportunity for you. Franchises are not a cheap option by any means; however either is setting up a business from scratch. You are going to be spending anywhere from £8,000 to £250,000 of your hard earned cash or loans so you really want to be sure you are spending it in the right place.
All that said – I could not recommend more a sector of the franchise industry to get involved in that kids / children based franchises. Definitely a respectable, fun and profitable option

There are many advantages to Franchising. When you buy into a trusted name, take on its fame and programs, you can be sure to have a business that people will recognize quicker than a start-up mom and pop-type business. In fact, it’s one of the most common business expansion tools. Not only this, but entering into Franchising is like entering into a family: there are other people there who will help you with everything from day-to-day operations of your business to buying your business’s equipment at the lowest price possible.
One of the biggest advantages of Franchising is the draw of the brand name. People recognize brand names, and because of this, the name of a business is worth quite a bit. People come to trust names they see again and again because they associate this frequency with quality and consistency. Soon, people become loyal to certain brand names. Franchising helps develop a brand name’s worth by upping the number of businesses popping up around the world.
Buying into a franchise is smart because it will make dealing with banks easier. A bank is more likely to give you money if they know you’re investing in something that has found success before. Additionally, if people know the name of the franchise, it will make it easier to attract customers to your establishment.
Another great plus to Franchising is that a person doesn’t have to market their business or learn how to do such things as accounting or distribution: The business’s model is already firmly in place. Many statistics say that as many as 90% of new businesses fail in the first few years because it’s hard to get the business generating funds while learning the ropes of what works and what doesn’t work. A franchise’s model is proven – it’s why people what to buy into the business – and it makes it easier to keep your business afloat. Once you’re in charge of a franchise, you’ll have a manual that explains the business’s ins and outs and will make day-to-day operations easy as pie.
When it comes to a franchise, it’s easier to buy your equipment and materials because people know the name. The other folk involved in the franchise system will be a great support system when it comes to buying materials. Additionally, one of the biggest advantages of Franchising is that you don’t have to spend as much on marketing and publicity: the more franchises there are, the more publicity you’ll receive. The sheer number of businesses helps establish a brand’s credibility.
Ultimately, there’s less risk involved with opening a franchise, and this is perhaps Franchising greatest advantage. Though the cost may be high to buy into a well-respected name, the possible rewards are much higher. As always you need to ensure your research is done in a manner which means you have all the facts in place, doing your due diligence will ensure that not only the franchise is right for you but that it is one that is going to be value for money too.

Is buying a business franchise a right step for you? This question tends to crop up as the most crucial query in your mind, once you are struck with the idea of taking up a business franchise. Here, the point lies in recognizing your passion and interests in a particular field of business, and the willingness to accept the ongoing risks and other demerits ’sportingly’. Business franchises in general is one of the best means to earn loads of money. However, as mentioned earlier you must spend considerable time to understand the intricacies of running a franchise, the selling aspects, the risks, the potential returns and other details – before you settle on to purchase a franchise business.
Here are some easy tips to help you decide ‘whether a business franchise is your cup of tea’.
Area Of Interest – The very first and significant point while selecting a business franchise you have to consider is buy a franchise that you are interested in. This will further instigate you to gain further knowledge and skills required in the business. Once you become an expert you are more likely to succeed in your trade, since a specialist knows the essentials to run a successful business. While you blend pleasure with your task, your business turns a task of joy and not a chore. Eventually, your love will picture the enthusiasm you infuse in the trade and your customers will certainly notice this. People prefer to deal with enthusiastic sellers. Business is all about gaining the faith of your customers, and faith can readily come from the expertise you display. Since customers always trust experts. Thus, recognize your area of interest before starting a business.
Investment – Now, once you recognize your passion and field of interest next comes your investment part. Every business franchise has its individual cost. While selecting or planning to take up a business franchise, ensure that you can put in the requisite investment to initiate and continue the trade.
Knowledge – A true business owner must acquire selling skills. Yes, once you settle on to own a business training franchise you must know the basic marketing skills. To flourish your business and take it to the next level, professional selling skills are the need of the day.
Staff Selection – Apart from the above-mentioned aspects, another major section is selecting the best professionals to run your business training franchise. Pick up the best team members and make sure you have regular discussions sessions with them. Communicate your ideas and to-dos to run the trade, and make sure you welcome suggestions from the franchisors too.
If you find the above criteria’s manageable then business franchise is definitely for you, so what are you waiting for there are numerous franchises for sale. Pick up the business franchise that interests you the most today.
When buying a franchise opportunity the choice is yours as to whether you are set up for life or losing your life savings so investigate, investigate, investigate.

We have all heard it, recession proof franchise. It is being used by hundreds of franchisors now in their marketing material but what does it really mean?
Quite simply it means a business which is not affected by slow growth and cuts in spending. This sounds as simplistic as it does stupid, how can a business not be affected; surely all businesses must be affected to a certain extent? It is however possible that where someone may not pay thousands of pounds for a holiday, instead they may pay a few hundred pounds on a new TV (home luxuries), and if we go down the line a bit, someone with less resources may not pay hundreds of pounds for a new TV but may pay for a new Xbox game, and one step further, someone who can no longer pay £30 for a new Xbox game, well, in all intents and purposes is broke.
There is no such thing as a recession proof business. Every business is going to be affected in one way or another, the recession proofing of a business is entirely dependent on the upper management’s ability to adapt to current spending and demands. This however was not the subject of the article.
How can the franchise industry benefit from an economic downturn? Again we have a simple answer:
As more people are being made unemployed, many with redundancy packages, there are more people available for employment and purchasing a franchise, a ready made business to take the place of their old job and one with a track record of success. In particular B2B franchises are taking off as seeing an increase in sales due to more small businesses being set up to cope with the demand of higher unemployment
Is it as simple as that though? No, of course not. Although franchise sales “may” rise, and I am expecting this to be the case come the summer of 2009, the income that it is possible to generate per franchise is likely to drop. This does not mean the franchise business is not a viable option but it does mean that the expected turnover figures for each franchised business should be modified accordingly. This drop in turnover for each franchise outlet will mean a decrease in the overall turnover for the franchisor, a drop in their monthly % of profits and despite the expected boost in franchise sales cutbacks are likely to be made in areas of IT, and staff. The only area I foresee staying the same is marketing. Marketing gets pride of place in franchising, most franchisors get a monthly marketing fee from their franchisees and as such their overall budget “should” stay on a relative plateau.
All franchises are based around expansion and branding, if the expected increase in franchise sales happens, along with it comes increased brand awareness as the network grows. This is good news for franchise buyers and existing franchisees as more money gets added to the marketing pot and due to the increased presence across territories the brand goes through a burst of organic growth.
The Good News
For the franchisor
An upsurge in unemployment and redundancy packages could lead to higher franchise sales
For the franchisee
It could well be that despite a change in peoples spending habits; organic growth and paid for marketing could be a real boost for franchise owners and buyers.
The Bad News
For the franchise buyer
For those franchise buyers who do not have the required capital, and/or are experiencing negative equity on their house, raising the capital through the normal method of bank loans could prove tricky.
For the franchisee
Expected turnover could see substantial drops in 2009/10
For the franchisor
% of profits from franchisees are likely to drop over the next 2 years (boosted however by franchise sales)

The more I look into the Franchise Industry, the more it is apparent that most Information is geared around selling franchises. The Business Franchise is exactly that – big business.
If you do a search on Google on ‘franchise’ or ‘franchise information’ then you are likely to be presented with thousands of pages of franchise advertisers, franchise consultants, franchise marketplace websites and possible a franchise association.
I have been seriously researching the industry for a number of years now and the number of good information sources I have found are few and far between. There are a number of good books on Franchising on amazon and I strongly suggest that if you are seriously examining buying a franchise then you read as many as you can. You can never do enough research.
I have just come off the back of two days solid of research on google on franchises and I have yet to find any information sites that are not in some way ’sponsored’ or funded by franchises or consultants.
Why is this? Do you know any?
The franchise Industry is big business and the opportunities to get impartial, informative advice and information are few and far between.
If you are considering buying a franchise then the biggest piece of advice I can offer is to consider the motivation of any article, web site and ‘guru’ that you come across. Do your due diligence and ask what their motivation is for providing that information.
To begin that process, let me give my honest answer:
I am writing a blog to give impartial advice from some one who has been a franchisee. I have seen the good and the bad of the franchise industry and have lost a lot of money.
I have spent the last three years, and more, fully researching the franchise industry and have been struck by the lack of impartial advice and information. I have a small vested interest as I am writing a manual on my experiences and how you can avoid them and will be launching it soon. Apart from that, however, I have no other interest in providing you information other than making sure you make the right decision for the rest of your future.
Learning about the franchise industry from honest people can give you every chance of success when researching and buying a franchise. Using the Internet to it’s full potential as a tool for your research is a must and at the end of the day with the right knowledge in hand you can come away with a fantastic business for life which can support your and your family in the way that you want to live. Without doing the proper research it is likely you will buy into the wrong type of franchise for you or one which may well collapse in the near future, leaving a gaping hole in your pocket and with little no no resources left to set up fresh.
To your future business success.

20 years ago a franchise would have cost you an arm, a leg, and probably your house. However things change and technology now means we can work from home without the need for expensive offices. Types of franchises have changed also and the widespread use of the Internet now presents us with a whole new range of online franchises.
A low cost franchise is generally anything under the 15k mark. Still a lot of money but compared with the shop front £250k franchises they are well shy of the hundreds of thousands it can cost to buy into the likes of McDonalds or Burgerking.
The myth that a low cost franchise is unlikely to bring you in much money is true in ways but quite simply you get what you pay for, however I would be wary of unsubstantiated claims of earning £150,000 per year for a franchise that costs £7,000. However as with many franchise you get what you work for and it is very possible to pay from 3,000 – 15,000 for a franchise and with a lot of hard work have a business with £30,000 + per year returns.
Some low cost franchises are nothing more than a system, you can pay a few thousand pounds for someone else’s business plan and method and you are then given limited training to go out and follow the plan. although there is nothing wrong with this type of franchise there are certainly many out there who make money from selling the system only and not by running the system itself. Be careful of anything which looks to be multi level marketing opportunities as these in many cases just do not work and you will find yourself in the position where you have just lost your franchise fee and have no way of getting it back. I do use the word “franchise” very loosely for all multi level marketing “opportunities”
As with all franchises you really do need to do your research before diving in head first. Contacting other franchisees to ask them how they are getting on with their franchise is an absolute must and asking the franchisor how long they have been in business before and after franchising will give you an idea on whether this is simply a fresh start up on a long established company. We highly recommend you make a list of up to 10 franchises and start whittling them down to three or four that you find are genuine opportunities, once you have your short list you can then really start to put some proper research into action and make a decision on which is the right franchise opportunity for you.
Low cost franchises give everyone the opportunity to be in business for themselves and in this day and age not everything costs several hundred thousand pounds, even many shop front franchises come in at very reasonable rates now so look at your available capital and make your choices partly based around that. Here is to your success!

The concept of franchising is in itself a sound business idea. Many have become rich because of it. However, not all franchise businesses become a success story. There are several factors that may contribute to the problem.
Some franchise units, although parented by large corporations, failed to make the mark due to the failure of the franchisee to strictly adhere to the program and terms of the franchise. Following the system of the company and the provisions of the franchise agreement is crucial to the success of any franchise unit because it is the essence of franchising.
Some companies venture into franchising with little experience and limited resources, hence they are unable to develop an effective franchise system. Although they may be able to sweet-talk prospects into buying a franchise, some, if not all, of these franchises are doomed to fail because of the flawed system of the company.
In some cases, the company did not place much attention and effort to market research specific to the franchise because its main concern is selling as many franchises as possible, without studying what the ideal number of units in a given area should be to ensure success.
The market is affected by many external factors that are beyond the control of business. These include the condition of the national economy, the outbreak of war or local civil unrest, market demand or shift in preferences, disease outbreak that affects raw materials supply, natural calamities, or anything that would cause sudden and significant decrease in the supply of goods or the market demand, or both. Unfortunately, business cannot do much about these conditions. The key to survival is adapting to prevailing conditions and being able to take the blow, until conditions are better. Sad to say, not many businesses can do both so they eventually succumb to the pressure.
Other franchises ceased operations after some time because they failed to obtain a firm commitment from central management to provide adequate, substantial, and continuous support to the franchise.
Some failed to get the commitment of their own employees to support a new business strategy or develop new employee and management skills to help them cope with new market demands.
Failure to handle and manage change is also another factor in the collapse of a franchise. The franchisee may not have sufficient insight about the staff’s resistance to change (new strategy, management style or policies) to be able to detect it right away and handle the situation properly.
Moreover, the franchisee may lack the required knowledge in technology, operational systems and organization that he loses credibility among his employees. In such a situation, employee morale will be low and a high rate of employee turnover can be expected. This dissatisfaction will certainly reflect on their initiative and work quality, and will be mirrored in the overall performance standard of the unit.
Franchises may also lack adequate reporting and control systems particularly those that were abandoned by the parent company after the business has opened. Any business that does not have a strict reporting and control system will most likely be operating on vague estimates, until it finally closes shop.
There are many reasons behind the failure of a franchise but all these can be avoided with a thorough study of the company, its existing franchise network, proper training, and strict compliance with the terms of the franchise agreement.