Buying a Franchise
Learn what you need to know before you sign up
Buying a franchise can be a great move for a would-be entrepreneur wanting to acquire a business model that already works on every level, from branding to pricing to marketing. It is fast becoming a strong way to enter and grow a business within New Zealand – we’re the most franchised country in the world* with $27.6 Billion of business format franchises. But making it work as a successful franchisee can be a lot more complicated than simply finding an appealing franchise brand and buying into it, therefore confidence with whom you franchise with is crucially important. *per capita. GDP figure from Statistics New Zealand
If you’re thinking of becoming a franchisee, how should you prepare yourself?
1. Take our FREE Franchisee Pre-Entry Training Course
We suggest before applying for franchise information and engaging in advice that you first complete the online Franchisee Pre-entry Training Course. This programme consists of 6 short, easy-to-follow modules that can all be completed at your own pace. The course has been designed to help you better understand franchising, your suitability for it and important information and guidance to consider when evaluating the purchase of a franchise opportunity.
2. Seek advice
FANZ has many experienced and knowledgable Affiliate Members that can assist you in getting set up in a franchise. Talk to a few different advisors to see who you feel you easily relate to and who demonstrates that they understand the role you require of them. It is important to choose who you feel is a right fit for you as they guide you through what is an important life decision.
Ask your adviser if they are a member of the Franchise Association of NZ. FANZ has a comprehensive list of Affiliate Members who adhere to the FANZ Codes and Rules and have been independently checked prior to being approved as a member. The advisors that you will most likely need to engage with are Franchise Specialist Consultants, Accountants, Lawyers, Bankers and Service Providers.
3. Buy from a FANZ Member
Signing up with a FANZ Member gives you the security that the Franchisor is bound by the Franchising Code of Practice and the Code of Ethics, therefore is committed to best-practice franchising, has high standards and is dedicated to keeping them that way. All FANZ Members offer a seven day cooling-off period, which means you have time to reconsider if you realise it‘s not for you. FANZ Members offer a dispute resolution process in their agreements to protect your ongoing relationship. As a member franchise, both you and your employees are supported and can request direct support from FANZ. FANZ cannot support you if the franchise system you buy into is not a member.
Questions to consider
- What time do you have available for the business?
- Are you prepared to give up the security of a regular income?
- Are you prepared to take on the responsibility of managing a business?
- Do you have the total support of your partner?
- What should you do if the business fails or does not perform up to expectations?
Other key areas to investigate
- Research franchising as a business format
- Decide what Industry and type of role you are interested in
- Understand the evaluation/recruitment process – refer Pre-Entry Online Education
- Prepare for the interview
- Complete a Site/Field Visit and talk to other Franchisees
- Understand the contents of a Disclosure Document
- Understand the contents of a Franchise Agreement