In choosing whether a franchise or franchise opportunity is the right business decision it is worth considering just how the franchise market is planned. 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 complexity in the Low Cost Franchise market that usually is not understood. A couple of hours investigating the selection of business opportunities available shows that the market is segmented into a number of different offerings. In a sector that is reputedly worth ten billion pounds and employs 360,000 the complexity should not be underestimated.

At the top of the market the larger well know high street brands such as McDonalds (probably the most well known franchise operation) offer an enormously successful business model and brand. A Franchise Opportunity with these sorts of market leaders is not for the faint hearted, a major personal investment will be needed, extensive training and exposure to the companies established brand and behaviours are mandatory. In return for the large financial and professional commitment the business model is rock solid and the business and marketing plans should be well established and easily implemented.

Of course with such a heavy investment and quite low risk, returns are likely to be lower than other opportunities.

The second tier offers less investment, the occasion to be flexible within the clear product or service and typically lower investment. These opportunities are unlikely to be well know high street brands but may make up the secondary pitches in the central business district or even we see some internet businesses falling into this type. As with the top category there will be an established brand and offer to be adopted but there may be opportunity for a little “self–expression” as the outline of the business is likely to be lower and the market may well be regional in nature. Franchises for example such as Monkey Music and 0800 Handyman would fall into this category, they are very successful franchises in their own rights but not hugely visible on the high street.

The final category is that of start-up franchises which offer the potential entrepreneur the opportunity to get in at the ground level. These business ideas when offered as a Franchise For Sale are the innovative ideas that do carry a higher level of risk, in that the sales plan, and even the management of the holding company may be not yet fully organised. The infrastructure will be in place of course but the companies are likely to be quite new. Depending on the franchisee’s approach 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 looking for an opportunity to form 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 gives a number of opportunities dependant on the investors available funds, attitude to risk and medium to long term goals.

Trackback URI | Comments RSS