Make sure you have a good idea of the franchisor's track record. Go out and speak to existing franchisees, get an understanding of the relationship between the franchisor and the franchisee. Is the franchisor concerned with the franchisee's profitability? You will invest in the purchase of the franchise and you will also pay a royalty fee, but sometimes these arrangements are not in favour of the franchisee.
However, it can be daunting to take the leap from full employment to self-employment, from relative stability to a degree of uncertainty. Many South Africans stay in jobs where they are not stimulated or underappreciated simply because they are too scared of taking the step towards entrepreneurship.
Starting a new business is a major career move, so before you hand in your resignation, it is important to ask yourself a few critical questions. You have to ask yourself honestly if going it on your own, as well as employing other people, will make you happier. Is the timing right? Do you have the cash flow to sustain your business for at least the first year? Do you have a good support system? Are you disciplined enough to be your own boss?
Most importantly - make sure you know your rights. The Consumer Protection Act makes it a legal requirement for franchisors to provide potential franchisees with access to financial projections and results, and a legal disclosure document outlining the opportunity. Also, look at the state of the economy to assess whether or not there is an appetite for the franchise you are considering. Are there multiple revenue streams within the franchise? Is it a brand you and the public can trust? Ultimately, the most important aspects of any franchise are its profitability and its success record.
Cash Converters has a tried and tested global formula with intellectual capital from 21 countries. All retail businesses face cash flow risks, but the Cash Advance and PayDay Advance products act as a buffer if retail sales fluctuate. This means our franchisees are not simply selling second-hand goods - they also need to understand finance and the changing market dynamics, so we offer intense training and support to our franchisees.
It is without a doubt that entrepreneurs are the lifeblood of South Africa's pressurised economy. We cannot simply wait for the government to create the change we need. Those with an entrepreneurial spirit must take the initiative to create new opportunities, a chance to give their very best to the country. For many people, the best option is to take the leap into the safety net of franchising.
