Owning your own franchise will have more appeal in 2009 as jobs are hit by the financial crisis, but there is a lot to consider before acting, experts say.
Jason Daniels, franchising partner at accounting firm PricewaterhouseCoopers, says all parts of the economy has been touched by the financial crisis and franchises are not immune to difficulties faced by other businesses.
“When looking at a franchise it is not just buying yourself a job, but you need to make sure you get a return on your investment, your capital, and are getting a wage from it,” Mr Daniels says.
He says it is important for potential franchisees to research diligently, and that they choose business models they understand, are familiar with and have a background in.
“I think franchising presents a good opportunity to prove you can operate your own business within a structured framework, but don’t just fall in love with the sales pitch,” he says.
“But the advantage of franchising over starting your own business is that you’ve got the advertising engine behind you, you are given a business system and it’s up and running out of the box.”
Jason Gehrke from the Franchising Advisory Centre says that for every thousand dollars a potential franchisee plans to invest in a new business, there should be one hour of research, so a $200,000 business would require five weeks of full-time research. More.