These days in both Australia and New Zealand, you’ll find franchises operating in almost every type of business and industry. The good news? If you’re looking to buy a franchise, you’re literally spoilt for choice. The other news? The more choices you have, the harder it can be to actually make a decision. And, while there are plenty of franchises to choose from, all with varying levels of complexity and cost, not all franchising opportunities are created equal. We know a thing or two about franchises, and we want to help you make an informed decision. That’s why we’ve put together this article, which features a quick and handy checklist for buying a franchise, so you can be confident in your decision when you decide it’s the right time for you to buy. .
First things first: do your background research. It definitely helps if you already have an idea of the business or industry you want to get into. Once you’ve got that in mind, it’s time to do your research. If you live in Australia, you’ll find a comprehensive web-based listing of over 1,300 franchise systems on The Franchise Business Directory. If you live in New Zealand, you can head to Franchise New Zealand for all the information you need to know about franchises in NZ. Each website contains a directory of franchises available to invest in, cross-referenced by category, so finding a particular franchise or type of business is simple! Spend some time checking out the different opportunities available to you, taking note of things like cost, training and so on.
When it comes to the costs and fees involved with buying a franchise, every franchisor is different. However, in all franchise programs, franchisors either directly or indirectly collect payments from franchisees for the right to use their brand and systems. The cost of buying a franchise can range from as little as $5,000 to as much as $1 million or more. Depending on the franchise, franchisees are also often required to pay ongoing fees for franchise support, which is usually either a fixed monthly amount, or calculated based on how much you earned for the month. Fixed monthly fees can range from $50 per month and up, while percentage fees can range from 2 – 15%. Before buying a franchise, make sure you know what the fees are and how they’re calculated.
Another vital thing to consider before buying a franchise is the position of the franchise in the market. You should not only look at the particular franchise in relation to its own activities, but also make an informed assessment of the forecasts of the overall industry or trade it falls under. Franchise businesses usually fall under two categories: goods or products, or the provision of services. Do your due diligence and make sure there is a need in the market for what the franchise is selling or providing. You don’t want to buy into a franchise that looks good on paper but in reality, isn’t an in-demand product or service.
Once you’ve found a franchise you feel pretty confident about purchasing, you may be ready and eager to sign on the dotted line. However, it’s vital you do your research and make sure this seemingly ideal franchise is the right one for you. Below are 22 yes or no questions to tick off before you commit to investing in a franchise. If you answer no to any of the below questions or are unsure, it’s important you carry out some further investigation of the franchise to make sure it’s the right fit for you.
This is certainly not an exhaustive checklist of things you need to tick off before buying a franchise in Australia. However, if you work through this checklist before you make your decision, you will certainly be at less risk of rushing headfirst into an ill-informed and possibly disastrous decision. Click here to learn more about ActionCOACH franchise opportunities!