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Buying a franchise? Don’t forget about these 4 things

Article provided by MiWay

A recent poll, conducted by BusinessTech, showed that South Africans are showing increasing interest in buying franchises.

If you have been thinking of starting your business, buying a franchise can be a great and safe move for entrepreneurs who may be a little wary to start a new venture from scratch.

Becoming a franchisee will help you acquire a model that has already proven its success. You would also acquire clientele eager to use the services of a business that has withstood the test of time – be it a restaurant or a tyre replacement business.

However, becoming a successful franchisee can be more complicated than simply spending some money and choosing a franchise at random. Here are some things to think about:

  • Franchisees have to follow rules and operate within a highly regulated system.If you are creative and free spirited, you’re probably not cut out to be a franchisee.
  • Ask yourself if your expertise will match the service the franchise offers. If you’re thinking of buying a beauty salon franchise, but have never gone for a beauty treatment in your life, do you really know what you’re getting yourself into?
  • Be sure to speak to other franchisees. Speak to other franchise owners. Ask questions like how long it took them to become profitable; how did their budget and actual expenditure match up; what was the toughest part of building the business; how supportive was the franchise head office, etc.
  • Make use of professional help: Have a lawyer and/or other professionals review your financial health and how it will be affected by the franchise arrangement before you sign a franchise contract. An independent accountant, for example, can help you assess the health of the business case. Having the right business insurance in place will also give you peace of mind that your investment is protected.  Some insurers offer value added services like MiWay’s MiBusinessAssist that can help you source new or pre-owned vehicles, give you access to pre-negotiated deals on a range of services and even provide you with HR advisers and labour lawyers.

If owning a franchise sounds like the right fit for you, have a look at these eight South African franchises you can open for less than R1 million.

MiWay is a proud Partner of the NSBC.