So, you’re considering starting your own business? It’s a bold move but one that’s being made by more people than ever before as self-employment continues to rise in the UK.
Whether you’re familiar with the concept of franchising or it’s something you’re only just starting to explore, we’re here to help you decide if it’s the right path for you. There’s a whole host of benefits to starting your own business with a franchise – higher success rates, ongoing support and lower initial investment (check out this blog to find out more about the benefits of choosing a franchise), but with so many franchises and homeworking companies out there, how do you decide which one’s right for you?
Let’s take a look at some of the things you should consider when choosing the right company for your future…
1. How long has the franchise been established?
It’s important to choose a franchise that has a successful track record and proven business model, so finding out how long the business has been established for is a good starting point. If the franchise has been operating for many years, it goes a long way to demonstrating that the business model is tried and tested and not just a trend before you invest your hard earned cash. If a franchise isn’t well-established yet, there’s a risk that their model may not be as “fine-tuned” as others.
Check out their credentials too – have they been recognised both inside and out of the industry with awards from reputable organisations?
2. What training will you receive?
Most franchises will typically provide some form of training before you launch into your new business venture. Comprehensive and well-structured training in essential if you’re going to be successful. The quality of the training, as well as the knowledge and experience of those who will be delivering your training is certainly an important consideration when choosing a franchise. Don't be afraid to ask questions either - What is their experience? How long have they been in industry? Are they qualified to deliver professional business training?
You may be a seasoned travel professional with years of experience selling holidays to your clients, but do you understand the ins and outs of running a business? At Travel Counsellors, we don’t just teach you how to use systems, we’ll coach and develop you in all areas of being a successful business owner.
If you’ve never worked in the travel industry there’s a great deal of knowledge you’ll need acquire, which requires much longer and in-depth training if you’re going to become an expert – it’s certainly not something that can be achieved in a week or two. With our Travel Academy, you’ll receive the highest level of training available in the industry over the course of a 32-week training programme – and that’s just the start of your journey to becoming a fully-fledged travel professional.
3. What support will you receive?
Typically, most franchisors will offer a level of ongoing support to help their franchisees build their businesses, but the finer details of what that support actually consists of could be what clinches the deal when weighing up your options.
There’s a great deal involved with running a travel business beyond booking a holiday. Some key questions to ask include; Will I have to do my own administration? Who is responsible for chasing client payments? Do I have to pay suppliers myself? What happens if there’s an issue while my clients are on holiday? What happens if I have IT issues? Do I have to worry about regulations? Be sure to understand exactly what support is included in your franchise fees, and what comes with additional costs.
Visiting the franchisor’s Head Office is a great way to see the scale of the support available to you first-hand and meet the people who will be key to the success of your business. At Travel Counsellors, we regularly open our doors to potential franchisees for our regular Discovery Days and actively encourage potential franchisees to meet existing Travel Counsellors. They will give you their honest account of their experience, including the challenges they've faced along the way. Come and take a glimpse behind the scenes at one our upcoming events.
4. Is the business in financially strong?
This is arguably one of the most important aspects of your research when looking into potential franchise opportunities. Don’t rely on a company’s latest press release to assess how financially stable they are – take the time to dig a little deeper.
The stronger a company is financially, the better equipped they’ll be to support their franchisees and continually change and adapt to meet the needs of the market – something that couldn’t be more important in an ever-changing industry like travel. It also has an impact on the company's buying power which could have a big difference on your bottom line.
And it's not just your own financial security you'll need to consider. Ensuring your customer's are financially protected when they book travel with you is paramount. That's why we introduced our own Financial Trust which offers the highest levels of protection in the industry. In fact, it provides better protection than ABTA. The recent failures of Monarch and Low Cost Holidays proved just how effective it is when put to the test, with all of our customers re-booked and re-protected - in many cases, before they were even aware there was an issue.
A quick search on Companies House will provide a wealth of company financial information free of charge.
5. How much do they invest in their franchisees?
As with all franchises, a percentage of your revenue will be paid to the franchisor. In the travel industry, franchises or homeworking companies often work on a commission-based model, where the franchisee and franchisor each retain a proportion of any commission earnt. The commission “split” varies from model to model and when taken at face-value, some models can appear to be offering a significantly larger piece of pie to their franchisees.
The question you should be asking any potential franchise partner, is how much of that revenue are they re-investing back into their franchisees to help strengthen their individual businesses? Do they have any other interests besides their franchisees? Are they competing with their own franchisees and homeworkers by having a retail presence or online booking tools?
6. What do existing franchisees say?
There’s nothing better than hearing it straight from the horse’s mouth. Speaking to existing franchisees is an important part of your own due diligence when deciding which is the best franchise for you. They can provide you with an honest opinion about the support the franchisor provides and ensure the reality lives up to what you’re being told. After all, they’ve been in your shoes before.
It’s a good idea to speak to someone who has come from a similar background to you as you may find it easier to relate their experience to your own and also speak to people in different stages of their business. Try and speak to someone who has started their business quite recently, as well as someone who has been operating for a long to get a variety of different perspectives.
We’re always happy to put you in touch with an existing Travel Counsellor or you can reach out to someone in your local area.
7. Are you getting good value for money?
Inevitably, the cost of the franchise is going to have a big impact on your decision. First and foremost, you must be able to finance your new venture. That includes any working capital you may require whilst you are establishing your business as it can take time before you start seeing a significant income.
The initial investment and ongoing costs of a franchise vary dramatically depending on the type of business you’re looking to start. Even within the travel industry you’ll find opportunities ranging from no initial joining fees to £50,000+. So how can you be sure you’re getting value for money from the investment? A lower investment might look a great deal on the face of it, but as with anything, you get what you pay for. Weigh up the cost of the initial investment and any on-going fees with what you’re going to get in return.
8. Is there a demand for the product/service?
Market research is essential to ensure there’s demand for the product or service you want to provide. The good news is, holidays are something people are reluctant to forego, making travel a pretty resilient industry, even when we’re watching our purse strings.
We know what you’re thinking… why do people need a travel agent to book a holiday when we’ve got the internet? Demand for knowledgeable travel experts is higher than ever, especially with growing concerns over untrustworthy travel providers. Not only that, customers are increasingly seeking more unique experiences when they travel, with highly a personalised service that’s tailored to them – and that’s something the internet simply can’t provide. With double-digit growth for the past 15 years’, we’re living proof that the future for travel professionals is bright!