Thinking about starting a business in France but also feeling daunted by the challenge? Here’s why buying a franchise could be the right option for you
Sally Stone is CEO of Les Bons Voisins
What is a franchise?
A franchise is a way of buying into a well-established business. A franchisor grants a license to a third party for the conducting of a business under the trademark and trade name and provides them with support and a brand.
Why are franchises popular with expats?
A reputable franchise can offer you a ‘leg-up’; a proven business opportunity and support which is invaluable when you are undergoing a significant change in lifestyle by moving to a new country. It’s no wonder that franchise opportunities work so well for expats moving to France – franchising there is very well regulated, franchisees are regarded as having an immediate professional standing, and there is ongoing handholding for the new entrant – the importance of the latter cannot be underestimated when you are faced with the challenges your new lifestyle might bring.
From my own experience, most of the people needing to earn a living in France have no option but to be self-employed (it is hard to be employed in France when unemployment is running at over 10%, unless you are bilingual with a niche skill). A franchise could be a good route to running your own business with all the freedom and benefits that it brings to your new way of life, without the stress and strain of inventing the actual business itself.
What advantages are there to buying a franchise instead of setting up my own business?
If you were planning a one-off business, then you would need to carry out research to find whether a market exists in France for that service or those goods you were intending to supply, and if it did, whether the people who might love what you are offering have the budget for hat you want to provide. The latter is something which is often overlooked. People might love what you are offering, but they also have to be able to afford it for you to make a living. All of this research will have been done for you by the franchisor, leaving you to devote your time to your own involvement in the business rather than working on the background essentials. A franchise should provide a framework within which you can retain what you might call the ‘fun’ of running your own business, without needing to lay the foundation itself before you can start to enjoy it.
There will also be sufficient marketing and advertising already in place, which all businesses need, and which can be a huge drain on the finances of any new business. The fact alone that this element is looked after for you can make the investment in the franchise worthwhile, as there will be an established brand image (internet marketing, a name and logo), meaning you have a business in a box ready to go.
You may of course have an idea of something in particular you want to do but it’s untried and untested, in which case, you could consider a franchise with a proven track record to put bread on the table, while you slowly build up contacts and credibility in the area allowing you to run alongside the franchise; a secondary activity as an adjunct to the ‘main’ business. I have seen this scenario repeated successfully time and time again.
How do I know if I’m choosing a good franchise?
If the franchise works to the rules and regulations of the French Franchise Federation (whether or not they are actually a member), then you can be assured that the documentation you receive will walk you through not just the individual opportunity, but also give you the background and history of the business involved. It will provide information on any franchisees who have left the business in the previous year, with the reasons for their departure, and will provide a complete picture of the stability of the business, and any part it might play in your own future.
It’s important to speak to existing franchisees, and any franchiser who doesn’t encourage this should be regarded with some healthy scepticism, since it’s only by talking to people at the ‘coal face’ that you will really learn whether or not the franchisor provides what you believe they are going to.
It is important that you research how the franchise is managed. The franchisor/franchisee relationship is a unique one – you are both, in some senses, clients of each other. You are joining an established business and must do your bit to uphold the standards and levels of service. At the same time, the central office of the franchisor must provide you with the exposure, support and equipment (whether that is know-how or actual goods) which you need.
How does the process of buying a franchise work?
You will be taken, one stage at a time, through the information gathering (necessary on both sides) with the opportunity to formally request the document d’Information Précontractuel, known throughout the industry in France as the DIP file. This will be posted to you in hard copy, and you are given a three-week ‘cooling off’ period during which time you are not allowed to make a decision as to whether to invest or not. However you are encouraged to keep in contact with the franchisor and their team to complete your information gathering.