Franchise Bulletin: June 2015 – 5 top tips for start up franchisors looking for serious investors

For businesses considering starting to franchise in the UK – whether already established here or coming from overseas – there are some key points to consider if you want to attract multi-unit investors to your brand.

Put your money where your mouth is

Don’t expect serious multi-site operators to invest their funds in your franchise if you haven’t done so yourself.

Operating company owned sites prior to launching a franchise demonstrates:

• Commitment to the brand
• Experience or knowledge of the local market. Vital points for the serious investor to consider your brand.

Get your price right

Be prepared to justify the basis on which you are charging your fees given that your brand is not yet established and is therefore no better than a start up in the eyes of the serious investor. Inflated management fees will put serious investors off.

Figures, figures and more figures

Be open, honest and almost overly cautious when mentioning performance figures relating to your brands – breakdown the detail – these guys know their stuff, demonstrate that you know yours too.

Join the club

Whilst you won’t be able to join the BfA straight away get associated with them through publications, use of their recommended lawyers, consultants and other suppliers to strengthen your brand.

Build covenant strength with the banks

You won’t grow if potential franchise investors can’t get finance to take on your franchises. Open a dialogue with the leading franchise banks in your sector. Get them on side to help your business grow and support your potential franchisees.

Whilst every effort has been made to ensure the accuracy of this bulletin, it does not provide complete coverage of the subjects referred to, and it is not a substitute for professional legal advice and should not be relied upon as such.

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The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.