Buying A Franchise
JUST CUTS NEW ZEALAND A CUT ABOVE THE REST
RISK ver Philip Morrison has evaluated more franchises than most. Here he shares some of his experience
henever I tell anyone that I’m a specialist franchise accountant, I always get asked the same question: ‘What’s a good franchise to buy, then? You must know, you’ll have seen heaps.’ So what sets Just Cuts apart from the rest, and keeps happy Clients coming back for our Style Cuts? Backed by a global hair brand Even as the largest hairdressing group in the southern hemisphere, Just Cuts doesn’t cut any corners when it comes to style. Just Cuts Clients know they are only served by fully qualified hairdressers. Integrated support from the award winning Academy Team Just Cuts just won the prestigious 2021 Global Franchise Award for Best Lifestyle Franchise, adding another accolade to a list that stretches back three decades. However, nothing about the Just Cuts model is dated, we’re constantly refining and evolving our model and completely digital support. Work life balance and culture You don’t need to be a hairdresser to become a Just Cuts Owner, with support available for every business and operations function of your salon. In the same way we make haircare easy for Clients, we simplify your business. In fact, over half of Just Cuts Owners run more than one salon.
Well, yes, I have seen hundreds of different franchises, and I’ve seen thousands of different franchise buyers, too. And that’s why my answer is always rather unsatisfactory: ‘It depends.’ You see, what defines a ‘good’ franchise depends as much on the individual buyer as on the franchise itself. Everyone has different skills, everyone wants different things from a business and everyone’s financial profile is unique to them. That means what works for one person may not work for another.
Benefits and drawbacks Franchising offers a lot of potential benefits for a new business buyer. You’ll be selected for your ability to run the business; trained how to run it successfully; given proven systems to follow; benefit from group buying power and group marketing; and have ongoing support to help you maximise sales and profitability. But at the same time, any business – franchised or not – has risks, and you have to evaluate those, too. You also have to be aware that franchises have some specific limitations: you can’t usually change the system or the products to suit your own desires, you may have a limited marketing area and, of course, you will have to pay ongoing fees in one way or another to fund that support. Whether the advantages outweigh the disadvantages is something you need to weigh up with the help of an experienced professional advisor.
Unicorns don’t exist
There are currently 12 NEW business opportunities available across the North and South Island.
Of course, what everybody is ideally looking for is a high reward, no-risk business. I’m sorry to tell you that, like unicorns, they don’t exist. If you want no risk, put your money in the bank or in government bonds, but be prepared to get a very low rate of return. As the old saying goes, ‘Without risk there is not, and cannot be, any reward.’ It’s therefore important that, when choosing a franchise, you have realistic expectations around risk and reward and can find a balance that you are comfortable with. As far as the risk side goes, there are two areas to consider: your own level of comfort with risk, and the risk profile of the business you are looking at.
Your appetite for risk
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If you haven’t been self-employed before, moving from the ‘safe haven’ of a job to the excitement and uncertainty of owning your own business can involve a major leap of faith. It can be a time of great personal growth when you leave your comfort zone and put your trust in your own abilities. If you are buying a franchise, you are also putting your trust in the franchise system, people and process. Franchise New Zealand
Year 30 Issue 04