Small Business Franchise
The Road to Independence

Tired of your 9 - 5 job?

The Small Business Franchise can be the ideal opportunity for the budding entrepreneur with little or no business experience to say goodbye to his corporate job (or demanding boss) and become his own boss.

Or you may have built up a very successful business and the ideal way for you to expand may be to Franchise Your Business!

business plan folder

The small business franchise has a lot going for it as is evident from the vast choice available in the market.

It can vary from a small franchise such as printing or sign writing with a relatively low capital outlay to the international fast food franchises that demand a much larger capital investment.

The franchise agreement will be particular to the specific franchise but there are clauses which are common throughout such as royalties, territory, training, intellectual property etc.

You will generally find the franchise agreement very one-sided in favor of the franchiser, which is aimed at protecting the brand!

There are, however, clauses within the franchise agreement which may be open to negotiation (such as the territory) but in some states or countries you may find the entire franchise agreement cast in stone.

The information shared below has been gained through twenty years personal experience, so having decided to go the small business franchise route or to franchise your business, consider the following before you Get it in Writing!

Which Questions to Ask when Exploring a Small Business Franchise

Explore the possibilities and opportunities offered for the small business franchise on the internet, franchise trade shows or from your personal experience in dealing with one of them. Having done your research and decided on a potential franchise - start asking questions!

Get hold of current franchisees and ask the following:

territory graph

  • What advice can they offer on territory and location of the business.
  • Was the training offered by the franchiser sufficient and does the ongoing support meet their requirements.
  • What are the general headaches of the business such as unions, stock availability, currency fluctuations, health regulations or whatever is pertinent to that specific franchise.
  • What are the demands of the business on the franchisee such as previous experience or skills, time, cash reserves etc.
  • What are the restrictions of the franchise agreement that they find most irksome and were they able to negotiate any part of the franchise agreement.
  • What is the failure rate (or even marginal stores) within the group and their opinion as to why a specific business failed. Was it the operator or the location or any other reason?
  • Does the capital layout as specified by the franchiser cover everything or are there further hidden costs such as a telephone system, computer network, high category safe etc. etc. Are the opening stock levels as prescribed by the franchiser adequate to ensure a good trading start or are they marginal.
  • Do they find staff with the necessary skill readily available and what is the staff turnover rate (If not supplied or if you franchise your business you can click on the following link to download your Free Employment Contracts)
  • Does the franchiser supply efficient point of sale and stock control systems and what are the ongoing costs involved.
  • Do they have a formal franchisee forum where they can speak with a collective voice to the franchiser and does he listen to their recommendations, address their concerns or does he only pay lip service.
  • cost and value graph

  • Does the small business franchise generate enough profit to also repay an investor or loan (should you happen to need one in your business).
  • Did the profitability of the business meet their expectations.

If you generally find positive remarks from franchisees, it is obviously a good sign. However, very few franchises have a 100% success rate, so get hold of a disgruntled or failed franchisee and ask them the same questions.

By following the links below you can get still some more small business franchise information:

Advantage-Disadvantage of a Franchise

Buying a Franchise - The Territory and Location

Calculating Franchise Royalties

Financing a Franchise

How to Franchise your Business

Finding the Most Profitable Franchise

Termination of a Franchise and Restraint of Trade

The information supplied on this page is just part of the small business franchise information you need. Refer to our Franchise Consulting Page for information on:

  • Disclosure Documents
  • Obligations of the Franchiser
  • Obligations of the Franchisee

A critical look at the small business franchise and everything else to do with franchises can assist you on your road to independence.

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