While low-cost entry makes mobile franchises attractive, don't rush in without considering these key points first.
A mobile coffee van business costs as little as $50,000 to purchase, with the potential to make as much as $150,000 in revenue a year.
Mobile dog washing, accounting, beauty, car servicing and cleaning, computer services, as well as food delivery, are available more than ever, from $6,000. There’s even a franchise that has drones providing aerial photography and video surveillance services.
People don’t realise 50 per cent of jobs that exist today won’t exist in 10 years, and they may want to buy their own business to safeguard themselves from being affected.
There is more awareness about the benefits of buying a franchise, particularly as the threat of redundancy lingers in some industries. People are also chasing flexibility and a desire to be their own boss, which is driving a surge in the popularity of mobile franchises.
Existing franchisors are even extending their current business to allow for mobility and tap into the demand from consumers to access services from home. Fast food giant McDonald's is piloting door-to-door delivery and Red Rooster has already launched this.
There are 79,000 franchises in Australia, an increase of nearly 10 per cent on two years ago, and I expect that number to continue climbing. Nearly half a million Australians are employed directly in franchising and the annual sales turnover for the country’s entire franchising sector is estimated at $144 billion.
I believe mobile franchises are a viable employment option as long as you do your research:
1. Due diligence
Don’t be sold just on the story about the business providing flexibility and a good income. All franchises must comply with the Franchising Code of Conduct; they must have a disclosure document and franchise agreement and these must be read carefully.
Get advice from expert advisers who understand the industry; don’t rely on family and friends. Money spent on a legal opinion is an essential investment, so hire a franchise lawyer to be safe.
See an accountant who understands financial models for franchises, and don’t be afraid to use your cooling-off period to verify facts and figures and determine whether you want to proceed.
Learn as much as you can about the industry and the specific franchise you’re considering. Do some market research: are there any significant trends you need to be aware of? Is it a growth industry? How might it be affected in tough times? Mystery-shop the franchise and other competitors you’d be up against.
Speak to other franchisees to gain an insight into the business culture within the franchise and ensure it’s a good fit for you.
3. Your needs
Know what you want out of a franchise first and foremost, so when you look to buy one you are searching based on your criteria. Prepare a list of ‘must haves’ and ‘deal breakers’.
Consider your reasons for wanting to own your own business and understand the lifestyle and income opportunities.
Understand specifically the level of ongoing support the franchise provides in areas like operating systems, training, business development and marketing, management and business tracking, staff recruitment and training, OHS and any other important components.
4. Skills and personality fit
Running a business is different to working for someone; consider your personality, identify your strengths and consider the gaps or challenges you may face.
Be prepared and open to grow and learn. Get objective advice and support up-front from someone outside the franchise you’re considering. The most successful franchisees seek external support and don’t solely rely on the franchise to provide their development needs.
Tracey Eaton is the CEO of Remarkable Franchises, Remarkable Business and Franchise Dynamics, and the director and CEO of Remarkable Marketing.