Automotive Franchise Opportunity, Mobile Alloy Wheel Repairs, Australia

Automotive Franchise Information

Here is what our consultant, Garry Williamson, says about franchising and what to look for in a Franchisor.

The first step in deciding whether franchising fits into your future is to make some tough decisions about yourself. Most people hate change and yet at some point people who are successful have to make some tough decisions, and have to step out of their routine. The thought of finding out about how franchising actually works, generally slides into the options picture, if the level of frustration has grown to the point that you have to make a major lifestyle decision. Maybe you have been made redundant, or come into some extra cash, or maybe its just time for a major change!

The thought of owning your own business has often crossed your mind. Most of us dream about being our own boss, and you only have to look at all those bored and frustrated faces of drivers sitting in traffic jams across the cities of Australia to realise how many people would love to change IF they could find something that gave them financial freedom with minimal financial risk

So if you are at that point in your life where a change is what you want, and that dream of being your own boss, is becoming stronger by the day, maybe reading this article will help clear up some of the issues that could mean buying a franchise is the best educated decision you have ever made.

Firstly let me tell you, nobody knows exactly how many franchises there are in Australia, although this Franchise Directory will be a big help, remember new ones are popping up all the time.

You should also read the papers in your area under the Classifieds section for Businesses for Sale/franchises and the big city papers do have an extra section following on from those Businesses for sale section on franchises. Small business magazines are sold through the Newsagencies and do carry particular advertisements for various franchise offers, or you might just approach some business you like the look of and ask them if its part of a franchise group. The Franchise Centre have been advising on all aspects of setting up franchise systems and also helping people just like you who are seeking information on what to look for in buying a franchise, as that is our speciality and has been, for the last 30 years so please also add us to your investigation list.

Currently we have 1500 franchisors listed on our database and those franchisors cover an amazing variety of business types both retail and service.

If you call us, we will ask you to come in for a chat. Okay our offices are in Sydney and you may be from some other part of Australia, but we can often achieve the same result if you send us some comprehensive background detail on yourself by mail or email and we can advise you at long distance just as effectively.

I know you want to know who the 'good franchisors are' but before we get too carried away it will help us greatly to first know a little bit about your past work experience, your likes and dislikes, your timeframe of decision making, by that I mean when you want to start a business, and of course what do your finances look like and how much of that capital you are prepared to put at risk in going into a small business venture. There is absolutely no point in getting all excited about buying a McDonalds franchise if you have $10,000 to spend!

While you are dead keen to find the best possible franchisor in a type of business that you are excited about that franchisor has some stringent pre qualification criteria they want to apply to you first.
Franchisors regardless of what type of business they are in are all actually looking for the same type of person. This is raw honesty time now. Does this sound like you?

1. You are definitely a team player. You enjoy being part of a group and are not a loner by nature.

2. You are a realist, which means you know it's going to take a while for your business to become strongly profitable. Plan on that being at least one tough start up year.

3. You are a relatively quick learner. You have to quickly pick up on the proven methodology of the way the franchisor has been running their proven business model.

4. You are ready and willing to make a decision to buy the franchise after you have satisfied yourself that it is what you want.

5. You have the necessary funds to get started. A professional franchisor will be looking for you to have at least a third of the purchase price of the business start up cost, in cash savings. So if the overall ingoing investment to start your franchised business up and running, is $100,000 they would expect you to have savings of $30,000 and be in a position to either lease the equipment or take out a bank loan for the balance.

6. You have a great outgoing personality, speak English well and enjoy working with people. Remember you will have to build your own customer loyalty. Repeat business is what any successful business thrives on

7. Your immediate family must be totally supportive of your decision to go into business. After all they know you far better than the franchisor you are talking to. Listen to their advice. Maybe you will not be able to handle the hours with a young family to also look after? Will dad and Mum help out with a loan .They will if they think you will be a great success at whatever you decide to do!

8. You will be expected to ask lots of market research type questions of the franchisor. They want you to be as sure as you can be that this type of business opportunity is what will make you happy and you have done some strong investigations of your own.

9. You are not afraid of selling! I know you may never have done this before but you have to understand the franchisor will teach you how to find and get customers, but it's your business so you who will have to sell the customer and keep them happy and coming back for more...

10. You are hungry. By that we mean you want and expect to make a strong success of your business. Wanting to make good profits for all your efforts is a natural goal for you to aim to achieve.

How are you feeling right now? You should be feeling 65% excited and 35% terrified. Believe me that mix of feelings, is very normal. Just imagine for a moment how the franchisor management team you are talking too must be feeling about you. Every time they decide to accept a particular applicant they are putting their hard earned franchised marketing image on the line. They can't afford a failure any more than you want to be one!

So do you have all the right characteristics to become a franchisee?

What about the franchisor? How do you tell if the one system you are attracted to is professional? Here are some indicators:

1. They should be interviewing you themselves. The selection process is very personal and they should not be using third parties such as Business Brokers or consultants to do that work.

2. The franchisor is going to ask you lots of questions and insist you fill out a comprehensive application form, meet your family and this process of selection will take at least two months. If they seem to be pushing you to make a quick decision that is a really bad sign.

3. The franchisor should be encouraging you to speak to all their existing franchisees. You should understand from them first hand how their businesses are going and the benefits they believe they receive from being part of the franchise system. Try to meet some of them as body language is also important in how they talk to you!

4. If there have been any franchisee terminations the franchisor should tell you exactly what happened and you should also speak to those people too!

5. If you are buying a retail franchise we believe the franchisor should hold the head lease of the premises and take the risk along with you that the site will be commercially viable.

6. When they give you the breakdown of your set up costs you should be able to go to other suppliers and do a comparison pricing exercise to see how effective the franchisors ability has been in negotiating the best possible buying deals for you.

7. When we set up franchise systems we always insist the client puts a clause in their franchise contract that gives both franchisor and you as the franchisee the equal right to pull out of the contract if during the training period either party decides the relationship is not going to work out.

These are key points so make sure you ask lots of questions and if you don't get answers that make you feel comfortable, stop right there!

Making dramatic change in your life is always going to be scary, but if you decide to buy a franchise the professional franchisor you decide to go with should be offering you a business "security blanket".

However they should also be telling you there are no guarantees in life or in ANY business, but they have a vested interest in your success and for that matter every franchisee that is part of the group you are joining.

Most franchisors make their money by charging you a fixed percentage of your sales so if their ongoing management fee was 10%, and your sales a week where just $500, they would only receive a fee of $50 a week, to help you manage and grow your business. This you would agree is a very small return for them so, they have a very strong financial and moral obligation to show you how to sell more, and to effectively maximise your sales and profit opportunities in the specific area you are running your business.

The whole point of you buying a franchise and being part of a proven method and operating way of doing business is to find a strong business mentor who can lead you in the right direction and minimize the pain and costs of your start up learning experiences. Its true, the majority of independent businesses end up going broke. Why is that you ask, well it seems most of the reasons they do, either boils down to a poor choice of location if it was a retail type business, or perhaps the owners were undercapitalised and did not have enough start up capital to hang in there until the business started to make good consistent sales. But I personally think many small businesses fail because the owners were not cut out for the ups and downs of being in small business, in the first place and had no one to talk to, or help them when times where tough or had anyone to compare operating results with.

Yes buying power advantages are an obvious benefit of being part of a growing group of franchisees, but just as important I think, is the ability of lateral sharing of operational information amongst all the franchisees who should also feel they are receiving strong leadership from their chosen franchisor.

So it's up to you really. If you are ready for a major lifestyle change, and are drawn to the idea of running your own show, I strongly suggest you give the idea of buying into a franchise system, a serious look. Finding out what type of franchised business system might suit your personality, timeframe and finances, is a great place to start. Remember the franchisor should be also treading carefully. If you think you are being pushed by the franchisor and generally getting the hard sell. Run away. Listen to all your warning bells... We don't sell franchises so our advice to you, is totally without bias. Our job is to make you a VERY educated buyer and we are fairly rare, as we are known for our candour and expert knowledge on what is happening right now in the world of franchising.

All the information on this page was supplied by our franchising consultant, Garry Williamson of The Franchise Centre, who has 30 years experience in franchising in Australia and throughout the world. For more information about Garry Williamson and his team at The Franchise Centre, please visit www.franchisecentre.com.au.