Buying a Franchise in NZ | What to Look For
What Should You Look for When Buying a Franchise in NZ?
If you're thinking about buying a franchise in New Zealand, you'll quickly discover there are plenty of opportunities to choose from.
Different industries. Different investment levels. Different franchise fees. Different business models.
So how do you decide which franchise is right for you?
Price is obviously important, but we'd argue that some of the most important questions have very little to do with the initial purchase price.
You need to understand what you're actually buying, how the business makes money, what support you'll receive and what you'll have the opportunity to build over time.
Here are some of the questions we'd recommend asking before buying any franchise in NZ.
1. Is There Ongoing Demand for What the Business Sells?
Start with the basics.
Will customers continue needing the product or service?
Some businesses depend heavily on trends or discretionary spending. Others provide products and services organisations need simply to keep operating.
Hygiene Direct supplies commercial cleaning and hygiene products to businesses and organisations throughout New Zealand.
Workplaces still need to be cleaned.
Bathrooms still need toilet paper.
Businesses still need rubbish bags.
Schools, offices, healthcare facilities, hospitality businesses, manufacturers and countless other organisations still need cleaning and hygiene supplies.
When evaluating a franchise, consider whether you're entering a market with an ongoing underlying need for what you're selling.
2. Are You Chasing One-Off Sales or Building Repeat Customers?
This can make an enormous difference to the type of business you're building.
Imagine making 100 sales this month and having to start again from zero next month.
Now compare that with winning customers who potentially order from you repeatedly.
Many of the products Hygiene Direct supplies are consumables:
- toilet paper;
- paper towels;
- rubbish bags;
- cleaning chemicals;
- gloves; and
- other commercial cleaning and hygiene products.
Businesses use them and then need more.
That means the effort required to win a new customer can potentially continue producing sales well beyond the first order.
Look after the relationship, provide great service and keep the customer.
Then find another.
You're not simply trying to make sales. You're trying to build a customer base.
3. Is There Room to Grow?
When you're assessing a franchise opportunity, ask what happens if you're successful.
Is there a point where your opportunity effectively runs out?
Or can you continue developing the business?
At Hygiene Direct, we don't place an artificial income ceiling on our franchisees.
There isn't a salary band.
You aren't going to be told you've reached the maximum income for your position.
If you want to build a larger business, you can continue prospecting, winning customers and developing your territory.
Your actual results will depend on many factors, including sales, margins, costs, customer retention and how effectively you operate the business.
But one of the biggest factors is something you control:
your persistence.
The opportunity to keep building is there.
What you do with it is up to you.
4. What Has Actually Been Achieved?
Forecasts and projections can be useful.
But when you're investigating a franchise, we'd also ask:
What has somebody actually achieved within this system?
Our highest-performing Hygiene Direct franchisee consistently earned approximately $180,000 per year while continuing to grow his business.
That figure wasn't an income ceiling.
It was simply what he'd built at that point.
He subsequently sold his franchise back to Hygiene Direct Head Office and became our Sales Director.
Today, part of his role is helping and mentoring other Hygiene Direct franchisees using the experience he gained from actually building one himself.
Past performance obviously doesn't guarantee what another franchisee will achieve.
But we'd rather show prospective franchisees a genuine example of what has been accomplished than simply make projections about what might happen.
5. Who Will Be Supporting You?
This deserves careful investigation.
What does "support" actually mean?
Is there someone you can talk to when you need advice?
Who helps you develop your sales skills?
Does the franchisor understand the day-to-day realities of operating the business?
At Hygiene Direct, franchisees have the backing of Head Office as well as access to a Sales Director who has actually been a successful Hygiene Direct franchisee himself.
That's an important distinction.
He knows what it's like to prospect for customers.
He knows what it's like to hear no.
He knows what it's like to win an account, develop it and build a substantial customer base over time.
We can't do the work for our franchisees.
But we can help them learn from people who have done it before.
6. How Long Do Existing Franchisees Stay?
This is a question we'd encourage anyone investigating a franchise to ask.
How long have the existing franchisees been there?
A franchisee who has operated within a system for years has experienced much more than the initial excitement of buying a business.
They've experienced the everyday reality.
They've seen changing customers, economic conditions, products and markets.
Our first two Hygiene Direct franchisees joined us approximately 10 years ago.
Both are still with Hygiene Direct today.
We're proud of that.
We believe a franchise relationship should be built for the long term rather than around simply selling someone a franchise.
7. What Does the Franchisor Expect From You?
Don't only ask what the franchisor will do for you.
Ask:
What will they expect from me?
A good franchise opportunity should not be presented as easy money.
At Hygiene Direct, we want people who are prepared to actively build their businesses.
That means prospecting.
Following up.
Visiting prospective customers.
Building relationships.
Looking after existing customers.
And doing it consistently.
There will be customers who aren't interested.
There will be prospects who already have suppliers.
There will be calls that don't get returned.
The franchisee who succeeds isn't necessarily the person who never hears "no".
It's often the person who keeps going after hearing it.
8. Does the Franchise Suit Your Strengths?
Don't buy a franchise simply because the industry sounds interesting.
Think about what you'll actually be doing.
Hygiene Direct is particularly suited to people who enjoy dealing with customers, building relationships and developing sales.
You don't necessarily need previous experience in the commercial cleaning industry.
Products and systems can be learned.
What's harder to teach is the desire to get out there, talk to people, follow opportunities and keep going.
If you're already successful in sales or account management, ask yourself another question:
Do you want to spend the next 10 years building somebody else's customer base – or your own?
9. Are You Building an Income or an Asset?
Ideally, both.
This is one of the biggest differences between employment and business ownership.
When you leave a salaried position, your salary generally stops.
But if you've spent years building a successful business with repeat customers, sales and established relationships, you may have created something that has value to another purchaser.
We've recently seen this happen within Hygiene Direct.
Our Northland franchise was placed on the market and sold within approximately two months.
And the people who bought it weren't strangers to Hygiene Direct.
They were two existing Hygiene Direct customers.
They knew the business from the customer's perspective, liked what they had experienced and ultimately decided they wanted to own the franchise.
We think that's a powerful endorsement.
10. Can You See Yourself Doing This for the Long Term?
Finally, look beyond the first year.
Can you imagine yourself still developing the business in five years?
Ten years?
Would you enjoy the customers?
Would you enjoy the challenge of winning new business?
Does the idea of progressively building a substantial base of repeat customers appeal to you?
Because buying a franchise shouldn't just be about buying yourself another job.
It should be about building something.
Our first two franchisees started approximately 10 years ago.
They're still with us today.
Our most successful franchisee built his business, sold it and now helps others within the network.
And our newest Northland franchise owners started their relationship with Hygiene Direct as customers.
Different stories.
But they all demonstrate something important about what we're trying to build.
Do Your Homework Before Buying Any Franchise
We don't think anyone should rush into buying a franchise.
Investigate it.
Read the agreements carefully.
Understand the financial model.
Understand your obligations.
Ask about the support.
Ask about existing franchisees.
Ask how customers are won and retained.
Ask how the business can grow.
And importantly, consider whether you are suited to the work required to make it successful.
The right franchise can provide an established platform.
But the franchisee still has to use it.
At Hygiene Direct, we can provide the brand, products, systems, supplier relationships, experience, Head Office support and mentoring.
You provide the persistence.
Explore Hygiene Direct Franchise Opportunities
If you're researching franchise opportunities in NZ and like the idea of building a repeat-customer business without an artificial income ceiling, take a closer look at Hygiene Direct.
We're looking for motivated people who want their persistence and ability to build customer relationships to contribute towards something they own.
He waka eke noa – we're all in this together.
Related Articles
- From Customer to Franchise Owner: Why Two Hygiene Direct Customers Bought the Business
- Our First Franchisees Are Still With Us 10 Years Later – What That Says About the Hygiene Direct Franchise
- Franchise vs Starting Your Own Business in NZ: What's the Difference?
- How Much Can a Franchise Owner Earn in New Zealand?
- Why Repeat Customers Matter When Buying a Franchise
- Are You Ready to Own a Franchise? 10 Questions to Ask Yourself
- From Salesperson to Business Owner: Could a Franchise Be Your Next Step?
- Starting Your Own Business with Training Wheels: The Hygiene Direct Marketing Franchise
Interested in a Hygiene Direct Franchise?
If you're looking for an established New Zealand franchise where you can build a base of repeat customers and where your persistence can directly influence how far you grow, find out more about Hygiene Direct.
Own Your Business with Full Head Office Support – Hygiene Direct
He waka eke noa – we're all in this together.