Interested in setting up a franchise, particularly an estate agency franchise? At first sight, getting involved in this area can appear complicated. So here are some of the essential things you need to know before taking the plunge.
What exactly is a franchise?
A franchise is a collaboration between two independent partners. The first of these, the franchiser, gives the second, the franchisee, the right to use an existing business formula, or make use of it under certain conditions and in exchange for some form of remuneration.
The advantages of franchises and the obligations they involve
As a partnership between two independent parties, the franchising system imposes particular obligations on the franchisee, but it also offers numerous advantages. As a franchisee, you will need to comply with certain franchiser requirements. You will have to pay them for the use of the brand licence, or for the ongoing help and training they provide. Furthermore, the franchisee is obliged to apply the franchiser's commercial strategy and to both respect the norms of the business concept involved and maintain its quality standards.
All these obligations, however, are accompanied by significant advantages. Firstly, this arrangement enables the franchisee to benefit from the franchiser's public brand image and reputation and also remain independent, as they are the sole owner of the business. And secondly, the franchisee gains access to the franchiser's commercial management system and professional expertise, giving them an advantage over completely independent estate agencies, which do not benefit from the advice, help and experience provided by a franchiser.
Are you the right kind of person to run a franchise?
The key to the success of your franchise is you yourself. In addition to good business sense and an aptitude for management, you need to take the time to ask yourself certain questions, such as: Do you have any funding available? Do you have any assets at your disposal? Are you prepared to borrow? Are you mobile? And also, what will your long-term aims and ambitions in this future profession be? This little self-assessment exercise will help you decide whether franchising is for you or not.
The franchising network
Though the role you play in the franchise set-up is an important one, the role played by your future partner is no less important. It is essential to find a franchising network that is reliable and trustworthy.
Of course, you will need to evaluate the franchising network with respect to particular criteria such as, for example, the quality of the services sold and that of the help and assistance, the communication between the different members of the network, and both the franchiser's management capabilities and the training they provide, whether initial or ongoing.
A good way of finding out about the franchise contract and the system surrounding it before committing yourself is by approaching the franchisers themselves and their franchisees directly. As well as doing all this, you can also find reliable franchisers by looking at whether they are members, for example, of the Fédération Belge de la Franchise (Belgian Franchise Federation) – as this requires them to adhere to certain practices – or whether they comply with the European Code of Ethics for Franchising.
Additionally, and to ensure you are fully aware of everything there is to know before signing a contract, the franchiser is required to provide you with a Document d'Information Précontractuelles (Precontractual Information Document), aka DIP, at least one month before signing the contract and prior to the payment of any bond, deposit or any other sum of money. The DIP provides you with essential information about the franchise company, the operating network, the financial results, the clauses of the contract and the market.
Now that you have an overview of all the key points you need to focus on, all that remains for you to do is get yourself started. Because information is absolutely fundamental in making the franchising experience a positive one, the Belgian Franchise Federation organises seminars and meetings with franchising experts and also has numerous useful resources available on its website. Armed with all this knowledge, you will now be able to confidently take that first step towards becoming a franchisee yourself.