So, you’re considering becoming a home care franchisee? This is a great time to be thinking about this, as the demand for this service is growing. More and more people are seeking high quality home care for their loved ones. However, it’s important to go into the buying process with your eyes wide open, being as fully informed as possible. So Home Instead has defined four key steps involved in buying a home care franchise.
Research, research, research…
Before you make any kind of move towards buying a franchise, make sure you’ve done some thorough research first. If you want to be a really successful franchisee, it’s vital that you’re fully prepared and have all the facts at your fingertips. You’ll need to know as much as you can about the home care sector: the current market nationally; the likely demand and competition in any area in which you’re interested; and the different opportunities available.
For instance, details of the national growing demand within the home care sector can be found by searching online for the market statistics. You can also find reports that will explain the current trends and any issues affecting the industry. To find more about the specific franchise offerings that are currently available in your chosen area, take a look at the websites of franchisors such as Home Instead.
Other issues you should be considering are the fees and funding involved and the regulations set by the Care Quality Commission (CQC). You’ll need to comply with these when you become a franchisee. It’s also worth checking out the UK Home Care Association and its code of practice.
Choose your franchise carefully
Before you make any decisions about what organisation’s franchise you should buy, compare several different franchisors to see which would be best for you. Have they got a good reputation for quality home care (Home Instead scores heavily here!)? Do they have a business model that’s in line with your own values and standards?
Why not call one or two of the best franchisors to find out more about what they’re offering potential franchisees? For example, these are some typical questions which you could ask:
In addition, take a look at their marketing campaigns (as public awareness of their brand will affect how successful your franchise could be). Have you heard of the company? Do they feature largely on Google? Have they done any national advertising? See if they have any case studies with examples of existing franchisees and how profitable their business is. Can you find any examples of employee satisfaction levels?
Carry out due diligence
Before buying a franchise, you need to have clear understanding of the legal and financial aspects involved. Your potential franchisor will provide you with a Franchise Disclosure Document (FDD). This is a very important document that should tell you all you need to know about the franchisor, including their business experience and financial performance. It will help you to decide whether this is a company that you’d be happy to invest in as a franchisee.
Apart from this, you’ll also need to have a clear understanding of your financial commitments as a franchisee, both initially and in the future. And you’ll need to know how to manage your finances effectively.
The other key aspect of the due diligence process is having a good understanding of your legal obligations. These will affect how you run your business and how you look after your employees and ensure they’re suitably qualified to carry out their tasks. You’ll also need to register with the CQC.
There’s a host of other regulations relating to issues such as health and safety, employee rights, taxation, contracts of employment and confidentiality of information. It’s therefore advisable to consult legal and financial advisors who will see you safely through the legal and financial minefields. They’ll also check over the franchise agreement and associated costs and will help you to keep in touch with the latest rules and regulations that could affect your new business.
Consider the costs
One of the most important aspects of buying a franchise is your ability to pay for it. As well as the initial investment fees, there are other costs you’ll need to take into account – such as equipment, marketing, royalty fees etc. Make sure you’ve checked all of these as thoroughly as possible – chat to your franchisor and, if possible, some franchisees as well.
Fortunately, there are loans available from banks and other financial institutions. However, first you’ll need to demonstrate that you have a strong business plan, along with healthy projected revenues. If the business looks viable, a bank could offer to lend you up to 70% of the funds you need. The government also offers Start Up Loans, which could cover up to £25,000 of your costs at an interest rate of 6%.
Get ready to sign…
So, you’ve researched everything involved in buying a franchise and have chosen your franchisor. Before you sign on the dotted line, take some time to review everything. At this stage it’s also advisable to ask your legal consultant to check the franchise agreement. Make sure you’ve looked through the Franchise Disclosure Document again and checked the potential turnover and the expected period within which you should be able to recoup your initial investment. Don’t forget (if you haven’t already done so) to quiz the franchisor about the training and support they’ll provide. Again, it’s worth talking to some existing franchisees about their views of the franchisor. If you’re happy with all the answers, you’re ready to sign!
Take the first steps now
If you’re keen to learn more, book a call with our Franchise Development Manager Luke Spellman. Click here to submit your details and you’ll receive a link for you to book a call.