The franchise model is unique. It is both a chance at financial independence but also offers the bonus of built-in support. It’s because of this appealing mix that more professionals are turning to franchising as an alternative to their corporate jobs.

As head of franchise banking, I’ve witnessed this trend first hand as an increasing number of mid-career professionals opt to switch out their corporate roles for a shot at financial autonomy. Many are discovering the appeal of multi-unit franchising, recognising its potential for scaleable growth and wealth creation.

Taking the driver’s seat: The critical success factors 

The transition from corporate to franchise ownership requires both the right skillset and mindset. While you might have specialised in specific areas in your corporate role, franchise ownership demands a broader perspective. You’ll need to understand and often be involved in every aspect of operations, from staff management to local marketing to financial oversight. Consider whether your experience and capabilities match the industry and business model you’re interested in. 

Before taking the plunge, here are four important steps to take:

1. Master the due diligence 

One of the most valuable tools at your disposal is the Franchise Disclosure Document for each brand – what I call the “golden star” of due diligence. This document gives prospective franchise buyers, current franchisees and professional advisers critical insights into the franchise system’s health, including new store openings, closures, territory sales, and any legal issues. 

At NAB, we’ve developed a comprehensive brand accreditation process covering thirty major franchises. While the bank conducts their own research, it’s equally important for prospective franchisees to take an active role in thoroughly investigating the opportunity, ensuring they make the best-informed decision for their future.

2. Understanding the business

You not only need to understand the key pieces of information, but also ask yourself, “is this a brand I want to partner with for the next 10+ years?” Are your values aligned to the business you are entering? Does the business excite you? For couples or partners entering a venture together, it’s essential to clearly define roles and responsibilities upfront. Immerse yourself in information days, training courses and talking to other franchisees.

3. Getting expert support

Working with specialists is crucial. Engage accountants and lawyers who have specific franchise experience. The best professionals will provide objective advice without taking sides, helping you make an informed decision. They will also help with structuring your facilities.

4. Your financial foundation

Due diligence extends beyond reviewing documents. You need to have detailed conversations with the franchisor about all upfront costs, ongoing fees, and working capital requirements. Many prospective franchisees underestimate the financial demands and cash flow requirements of starting a new business.

Understanding your financial position is paramount – and this is where your bank becomes a crucial partner. We look for realistic assumptions in your business planning and forecasts. Your break-even analysis is particularly important; you need to clearly understand at what point your business will become profitable. 

Tools for your success

NAB has developed practical resources to support your franchise journey. Our comprehensive business plan template guides you through the essential elements of planning your venture, while our cash flow forecast template helps you map out your financial requirements and projections. These tools are available on our website and can help you structure your thinking and planning effectively.

Remember, successful franchising isn’t just about capital – it requires active involvement and the right mindset. Even with a manager in place, your engagement and oversight are essential. Take time to evaluate your readiness, conduct thorough due diligence, and build the right support network. 

The rewards of franchise ownership can be significant for those who approach the transition with careful planning, realistic expectations, and a commitment to the process, all while leveraging their own strengths.

Important information

This article has been prepared by NAB and contains general information only.  It is not intended to be relied on as advice.  The information provided does not take into account your objectives, financial situation, or needs.  Before acting on the information in this document, you should seek independent legal, financial, taxation or other professional advice.  Information correct as at February 2025.

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