If you’re looking for a business opportunity this year, you might be considering joining a franchise. Not only does a successful franchise provide a return on investment sooner rather than later, but you can also take advantage of being a part of an already established brand. Both of which means you have reduced business risk.
But, if the world of franchising sounds confusing – Bridgewater Home Care is here to help you understand it. Read our blog to learn the essentials of owning a franchise, important terms you might come across, and the steps to joining one…
What is a franchise?
A franchise is a type of business model where a recognised company or brand sells parts of the business to an individual, so they can run an exclusive location of the franchise themselves. This enables the person buying the franchise to use its brand/products/services in their marketing.
Put simply, the individual paying to use the business purchases the rights to market or distribute the company’s products/services in an agreed location.
What are the pros and cons of owning a franchise?
Like any business model or opportunity, there are several pros and cons you should be aware of before you decide to take part. For example:
Pro: support from the franchisor
One benefit of joining a franchise is that it can provide you with more support than you would receive if you were to set up a business on your own. This is because the brand is already established, and will likely have encountered issues previously.
So, if you run into the same issues they’ll be able to help you navigate them. On the other hand, if you were setting up your own business, and experienced problems – you won’t have a helping hand to guide you through it.
Pro: funding can be easier to gain
Another pro of joining a franchise is that funding can be much easier to acquire. This is because there’s typically less risk associated with a franchise business model.
According to The Franchise Show, banks are more likely to provide funding to franchises as investors are joining a brand that has proven to have a significant level of success.
Con: time-consuming investment
One con of joining a franchise is that it’s a hands-on investment. It requires you to make time to manage it to ensure the success of your territory. But, with the support of an involved franchisor, the managing of your territory will be made much easier.
For example, at Bridgewater Home Care, our franchisees are given 1-1 support from our founder, Phil Eckersley, for the first year of their partnership. This provides them with all the tools they need to run a successful franchise, such as time to answer any queries they might have, help with compliance, experience to tap into, and support with recruitment.
Con: royalty payments
Another factor you might consider a drawback of owning a franchise is that you will likely have to make royalty payments. These are payments you make on a monthly/annual basis to the franchisor to access certain resources. To find out more about what franchisees usually pay, you can check out our blog.
It could be considered a challenge if these payments don’t provide you with anything helpful to your franchise. But at Bridgewater Home Care, our royalty fees provide our franchisees with access to:
- Bespoke software to make the day to day running of your business simpler
- A market leading CRM system specifically built for Bridgewater Home Care franchisees
- Processes, policies, and procedures so you can run your business as effectively as possible
- Marketing resources to help advertise your business in your local territory
- Online systems so you can work anywhere
- Ongoing, unlimited support, advice and guidance in all aspects of your business
What are the different types of franchises?
There are several different types of franchises you could be a part of. Below, we’ll explore some you might come across in your research in more detail:
Business format franchise
This type of franchise is common and involves a franchisor allowing a franchisee to use their complete business model. This includes (but is not limited to) branding, software systems, training and materials, and any necessary resources and training that help the franchisee succeed.
Product distribution franchise
A product distribution franchise is a little different from a business format franchise. Whilst in a business format franchise, franchisees imitate the franchisor’s entire business model, including branding and marketing – a franchisee within a product distribution franchise will sell the franchisor’s products/services under their own chosen name and branding.
Job franchise
A job franchise is different from the above. It’s a franchise where the franchisee is typically the only employee – acting as a one-person show. It requires lower investment than other franchise models, but means the franchisee performs more of the day-to-day operations.
What are the steps to buying a franchise?
Buying into a franchise should be something you consider carefully, so you know you’re making the right decision. Typically, the steps involved are:
1. Determine your goals
Figure out exactly what you want to achieve from your franchise. For example, is it a high return on investment? Or would you simply like to make a difference in your community? These questions will help you determine which is the right franchise for you.
2. Research different franchises
You need to consider a variety of franchises before figuring out which one you want to take part in. Ensure you evaluate the different types and do your due diligence when it comes to figuring out which one is the right type for you.
3. Assess your financials
Once you’ve decided which franchise you want to invest in, you need to assess your finances and confirm that you have enough to make the initial payment. The initial cost will vary depending on which franchise you join, to find out more about the investment opportunity with Bridgewater Home Care, visit our page.
4. Choose a franchise and sign an agreement
Now you’ve chosen your franchise – it’s time to sign the agreement. Here you’ll establish exactly what is expected of you and the franchisor. It’s also a great opportunity to ask any remaining questions you might have.
To find out more about the advantages of being a franchisee, visit our blog.
A glossary: key franchise terms you should know
To help you better understand what a franchise is, we’ve written a glossary highlighting the terms you’ll likely come across when researching it. Take a look below:
Franchisor definition
A franchisor refers to the person or business that sells the rights to its products/services/operations to another person or company, so they can use their brand in a specific location. To find out more information, you can visit our FAQ page.
Franchisee definition
A franchisee is an individual or business that purchases the rights of a franchise so it can use its goods and services within an exclusive location.
Franchise agreement definition
A franchise agreement is a contract between a franchisor and a franchisee that lays out the terms and conditions for both parties when it comes to the buying/selling of the franchisor’s brand/goods/services. Essentially, the legally binding agreement establishes expectations, and the relationship, as well as protecting the interests of both parties.
Territories definition
When talking about franchises, you’ll likely see the term ‘territory’ pop up every now and again. Territory refers to the exclusive location in which the franchisor has allowed the franchisee to operate their franchised business.
Contact Bridgewater Home Care to begin your franchising journey now
If you’ve been looking to partake in a successful business investment, joining a franchise in the home care industry might just be the right opportunity for you. And at Bridgewater Home Care, we’re ready and waiting to speak to you about taking you on our franchise journey.
The experts in our team are dedicated to helping franchisees establish their own exclusive territory, with access to our business model and branding. You can take advantage of being a part of a successful, established brand straight away.
Interested in finding out more? Contact us today by making an enquiry on our contact form, or call 01942 215 888.
