In choosing whether a franchise or franchise opportunity is the right business choice it is worth considering just how the franchise market is built. Here in the UK the idea of a franchise for sale somehow has less kudos than an opportunity to invest in a privately owned business.
There is a level of sophistication in the Low Cost Franchise market that usually is not understood. A couple of hours investigating the variety of business opportunities available confirms that the market is segmented into a number of different offerings. In a sector that is apparently worth ?10bn and employs 360,000 the complexity should not be underestimated.
At the top of the market the bigger well know high street brands such as McDonalds (maybe the most well known franchise operation) offer an particularly successful business model and brand. A Franchise Opportunity with these sorts of market leaders is not for the faint hearted, a considerable personal investment will be required, extensive training and exposure to the companies established brand and behaviours are obligatory. In return for the large financial and professional commitment the business model is rock solid and the business and marketing plans should be well recognised and easily put into place.
Of course with such a heavy investment and moderately low risk, returns are likely to be lower than other opportunities.
The second type offers less investment, the occasion to be flexible within the defined product or service and normally lower investment. These opportunities are unlikely to be well know high street brands but may take up the secondary pitches in the central business district or even we see some internet organisations falling into this class. As with the top category there will be an established brand and plan to be adopted but there may be opportunity for a little “self–expression” as the shape of the firm is likely to be lower and the market may well be regional in nature. Franchises such as Monkey Music and 0800 Handyman would fall into this group, they are very successful franchises in their own rights but not very visible on the high street.
The final group is that of start-up franchises which offer the potential entrepreneur the opportunity to get in at the ground floor. These business ideas when offered as a Franchise For Sale are the innovative business plans that do carry a higher level of risk, in that the sales proposition, and even the management of the holding company may be not yet fully developed. The infrastructure will be in place of course but the businesses are likely to be rather new. Depending on the franchisee’s attitude to business these cheaper opportunities may well be the most eye-catching as they do allow for a degree of development and flexibility, some will even actively encourage the brand development from within the membership. If you’re seeking an opportunity to mold the franchise then getting in at the cheaper end of the market may well be a good choice.
fundamentally the franchise market is many layered, complex and provides a number of opportunities dependant on the investors available funds, attitude to risk and medium to long term targets.
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