LISTEN before you buy
All franchise agreements put a lot of power in the hands of the franchisor. Whether a franchisor uses that power wisely or carelessly comes down to their character. Their character will have a huge impact on your experience as a franchisee and may be the most important thing you should assess before buying a franchise. It’s also the hardest thing to assess. But you can learn a lot by asking smart questions of other franchisees and listening closely to how they answer. Ask about how the franchisor communicates and how they act when challenged or wrong, how they introduce change, how they respond to franchisees struggling under personal circumstances and how they demonstrate that they have their franchisees’ best interests at heart. Listen to what is said, how it is said and what is perhaps glossed over.
LOOK BEFORE You’ll begin to get a sense YOU of how LEAP things really operate in that franchise system.
Franchising is a powerful way of doing Michael Bright business, but the same forces that make Specialist Franchise Lawyer franchising great also create vulnerability 021 2666 395 and risk. We know what works, what doesn’t, and how to respond to the issues that arise. We help with: · Assessing franchise opportunities · Advising on franchise agreements and other contracts · Franchise sales and purchases · Dealing with difficult situations
FRANCHISE LAWYERS Auckland Phone 09 303 3764
North Shore Phone 09 414 9800
www.gazeburt.co.nz
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Buying A Franchise: Choosing Wisely
Strengt number Franchisees are feeling much more positive than independent small business owners. Why does buying a franchise give you such big advantages over going it alone?
T
he last 18 months or so haven’t been easy for anyone, and that’s especially true for small business owners. Lockdowns, online sales and contactless delivery have created challenges, and, while small businesses can move fast, they don’t always have the resources, the systems or the expertise on hand to cope. ‘As a result, my estimate is that 40 percent of small business owners are seriously stressed,’ says psychologist Greg Nathan. ‘But the figures are significantly better for franchisees, where over 80 percent report that they are functioning well, or are slightly stressed but functioning normally. Independent owners are struggling because they don’t have the business and social support that good franchise networks provide. Franchisees feel part of a wider group, part of a team, and that can be very reassuring – they know someone has got their back.’ So if you are considering buying your own business, buying a franchise makes more sense now than ever. Starting a new business – or even taking over an existing one – is hard. You need a viable business model, a reputation and the right equipment and connections. You need finance and you need customers. You need to be good not just at doing whatever you do, whether that’s holding classes or making coffee, but at running a business: marketing, managing cashflow, pricing and negotiating, to name a few key activities. Not many people have all those skills when they start, which is why many small businesses never get off the ground. If you’re used to having a team of specialists around you, being your own boss can also make you feel very isolated. Buying a franchise, on the other hand, means that you will have strength in numbers. Although you still own your own business, you’re also part of a much bigger operation. You’ll get the training, systems, marketing, help and support you need to have the best possible chance of success. You’ll have more options when it comes to funding, because banks know the value of good franchise models. And when something goes wrong (as inevitably happens sometimes), you’ll have all sorts of help and support available. The survey of one franchise group described on page 16 shows what a difference having trust in your franchisor can make. Buying a franchise also means that you can take your existing experience and abilities and channel them into something new. It’s just a question of matching your skills, goals and attitude to the right opportunity. Franchise New Zealand
Spring 2021
Year 30 Issue 03
