Slot into self-employment

Ex-restaurateur Peter Gordon decided to buy a franchise to gain freedom of lifestyle while remaining his own boss. He has had a Jim's Mowing franchise since September and is loving the work and variety.

"Although you have to work hard, a franchise means you work your own hours for yourself," he said.

Talking to other franchisees without the franchisor around is important, he says. As is getting a professional opinion to check for possible hidden costs in the contract.

Gordon chose Jim's Mowing because he found them up-front, honest and providing a service appropriate to the fee asked. Before making up his mind, Gordon worked alongside another franchisee for a couple of days.

"I found that really helpful in deciding whether I really wanted to do this type of work."

Provendor vending machine franchisees James Laugesen and his mother Robyn describe the franchise system as a mother-ship - there to provide help as required.

"The Provendor support systems, including ongoing access to an accountant, are very good. Managerial visits and the annual conference also provide fresh ideas," says Robyn.

James was only 17 when he took on the franchise in 2004, managing the paperwork while Robyn helped with ordering and restocking.

"Franchising appealed because I wanted to be my own boss but learn about business," explains James.

They took on the franchise after seeing a Provendor advertisement but had been investigating franchise options beforehand. Robyn spoke to the franchisee who stocked up a Provendor box at her (then) workplace and they separately went out on Provendor runs to see the snack vending machines and honesty box trade.

Two years later James is heading to university with a thriving franchise behind him. The only difficult issue is following up bad debt, says James. "You have to be careful because if you hassle too much they can tell us to take it [the vending machine] away. But I've learned heaps."

Currently there are 350 franchises in New Zealand, of which around 70 percent are home grown, says Simon Lord, publisher of Franchise NZ Magazine and website.

Attitude, aptitude and being the right "fit" are all vital with franchising, explains Lord.

"A fast food franchise manager needs different aptitudes to a Fastway courier or lawn mowing business. A franchise can fail if the wrong person is in the system, even with franchises as proven as McDonald's," he said.

Lord says a major advantage of franchising is the backup support.

"Someone is doing a lot of your marketing, managing your computer systems and negotiating supplies, insurance etcetera. But this also means you don't have as much freedom. A McDonald's franchisee can't decide to start delivering pizza."

According to Lord, the two types of people that don't tend to succeed as franchisees are the "pure entrepreneurs" who find themselves battling against the system, and the "total employee" who don't show any initiative.

"The 'intrapreneur', people happy to work within a system but keen to exploit it for maximum benefit, is the ideal franchisee."

One disillusioned franchisee, who has to remain anonymous due to media clauses in the franchise agreement, says in retrospect she would be more suited to franchisor role than franchisee.

It's important to assess whether your working style will fit the franchise style, she says.

"Are you willing to follow the manual faithfully or are you more entrepreneurial? If you have a problem with taking direction from other people, then a franchise may not be the right avenue."

She is making money but struggles with aspects of her franchise.

She feels there is little redress when things don't turn out as expected and recommends legal advice from professionals versed in franchise dealings.

"The initial enthusiasm of the franchisor can overshadow finer details behind franchise contracts, which can overly favor the franchisor making it difficult for franchisees to make a decent profit."

BEFORE SIGNING UP

* Read the franchise documentation carefully with a lawyer before signing anything.

* Check figures are correct. Always take financial advice, preferably from an accountant experienced with franchises.

* Consider your lifestyle requirements carefully. Will retail suit if you play sport on Saturday? Will an early morning bakery suit if you have small children?

* Check out claims about returns and support systems by meeting other franchisees - without the franchisor present.

* Spend a couple of days with other franchisees to check whether the role 'fits' you.

* Think carefully - are you an entrepreneur, employee or intra-preneur? If you're not sure ask others, including friends and colleagues.