Bizstartup.ie - Start Up Kit

There are over 300 franchise systems operating in Ireland, and it can be a good route for someone looking to invest their money in a proven business model, says Tom Shanahan, executive director of the Irish Franchise Association.

Basically franchising provides a proven system for starting a business as a franchisee, or a blueprint for the expansion of an existing business as a franchisor by means of a set contract.

Do your research

“It is important that you do your research before considering becoming a franchisee, because you will be tied into a contract or partnership arrangement for a reasonably long period of time,” says Shanahan.

“The franchise route is not for everyone. Some may find the prospect of signing a five- or 10-year contract off-putting. However, it is a model to which banks are favourably disposed, and research has shown that over 90pc of franchises will still be in business five years after start-up.”

Tried and tested

Many see the tried and tested element of a franchise system attractive. It provides a half-way house between going it alone and working for someone else within a franchise framework, with all the support that entails. 

Research is key, says Shanahan. “You might be in a hurry to start a business because of redundancy or job insecurity, but make sure you pick the right model for you. There are literally thousands of franchises worldwide to choose from.”

What to expect

He says there are certain things that you should expect to get from your franchisor in return for your investment.

“First and foremost you should get a legal agreement from the franchisor which is on average for a period of five to 10 years.  Training is vital. This can be anything from on-the-job training to a formal classroom situation. You should get an operations manual, which is your bible. It tells you how to run the business in detail. Fourthly, you should get ongoing support in the form of advice, promotional materials and links with other franchisees. If all of these elements are present it allows you to be in business for yourself but not by yourself,” says Shanahan.

Choosing the franchise for you:

• Do your research. Don’t jump at the first opportunity that comes along
• Ensure the total investment required is something you can meet
• Ensure the business is one you will be proud to be associated with
• Choose a franchise that fits in with the needs of your local area
• Ensure the franchise has a proven track record
• Look for information about the franchise’s profitability
• Check that there’s a strong branding strategy in place for the Irish market
• Ensure the franchise offers an excellent training regime
• Check the track record for ongoing support and back-up from the franchisor.