What is Franchising?

Franchising is a method of starting your own business which will provide a high chance of success compared to other most other business start ups. It will offer you a proven business ”system” or format, full training in the business and with the ongoing support that you’ll need to be successful. You’ll work under an established brand using a business system that’s been developed by the franchisor and one that’s proven in the marketplace.

Who is it for?

It will come as no suprise that Franchising isn’t for everyone! There are many who believe that you need to be an entrepreneur in order to be successful – not so! In fact it could be be a disadvantage if you are to run a “proven business model” where deviation from the model could spell disaster. While it’s true you need a certain grasp of commercial issues (but then why would you get involved in running your own business if you didn’t) and you also need to follow the “system” and not doing so is probably the biggest reason franchisees fail. Can you imagine a true entrepreneur taking on a McDonalds franchise and starting to offer something that wasn’t on the menu, something that hadn’t been tried and tested, or producing and selling “fat” chips? It is frequently said that McDonalds don’t necessarily make the best burgers in the world but what they do; is offer a consistent quality or food and an experience that just works!

A franchise is for someone who is prepared to invest in their future, who is prepared to follow a successful business model and be prepared to put in the effort, particulary in the early days, to get the business off the ground.

Choose carefully

There are probably close to 1000 franchises operating in the UK currently and so there’s plenty of choice. Most successful franchisees are those who have a general interest in the business sector they go in to. For example; if you are interested in finance and book keeping then an accountancy franchise might be right for you; if you have experience in the motor trade and an interest in cars in general then a car rental franchise might suit; if you have an interest in sport then a sports coaching franchise might be for you.

So what does it cost?

Franchise License costs vary considerably depending on the type and the potential returns. You will pay an initial fee to set you up and provide intial training for the proven business format. Normally the franchise fee will include an exclusive area or stipulate that another franchise can’t be established within a certain distance and others where exclusivity is not applicable – have you seen how many Costas have been opened recently; often within a few hundred yards of one another and have you also seen how busy they all are?

As well as the original franchise fee you will pay continuing fees for the support that will keep you in business earning profits in the sector that you’re in and sometimes there are national marketing levies (as a small percentage of turnover) which go to providing high level marketing activities that an individual franchisee couldn’t afford on his or her own.

So what about the future?

As well as provide you with a great opportunity to build a business which could produce significant income over and above the traditional “job”; owning and running a franchise also provides an excellent opportunity to build something of real value. A franchise is like any other business in this respect; the more profitably it trades the more value it has and when you want to sell it (whether that’s simply to go on to do something else or retire); you can – although the purchaser would have to be acceptable to the franchisor and you would probably have to pay to have them trained.

To find out more about franchising or to discuss any of the opportunities we have available please call us on 0845 643 5725 or contact us by completing our enquiry form

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