Franchising - Beat the market odds
Franchising offers a tried and tested handbook on how to operate and the power of a brand but preparation is key to membership success
Having been in franchising for more than 30 years I can safely say that even in such difficult times, franchising offers opportunities for everyone and anyone who wants to build a successful business of their own.
According to the latest NatWest/British Franchise Association Survey, franchising in the UK grew by 15.1% in 2007 - a rate nearly five times higher than growth in the economy generally. There are now 809 franchised systems operating in the UK, with 34,200 franchised outlets and 383,000 staff, generating £12.4bn in total network sales.
World Franchise Council figures suggest that people in more than 120 countries are opting for franchising.
Existing businesses may find that converting their offices into franchised outlets will unleash extra effort from the staff - particularly from a manager who has now become an owner. They will now literally be investing in their own future success.
You may wonder why anyone would want to start a business now but the preparation this will entail will enable businesses to position themselves to maximise their potential income when the market starts to recover and do so much more cheaply than during a market boom.
For those wanting to go into business for the first time, the guidance and experience available from a properly structured and developed franchiser is invaluable.
You will, of course, have to pay upfront and ongoing fees but the services you will receive should save you an immense amount of time and money, not least because of the help they provide in avoiding simple mistakes when entering NEG. the franchising market.
That 50% of independent business start-ups cease trading within five years, compared with just 2% a year for failed franchisees, speaks for itself. Converting your business into a franchise gives you access to an established brand and operating system, marketing, research and development, group buying discounts and business expansion advice that you simply couldn’t afford, or have the time to arrange, by yourself.
It may even be easier to grow by opening more outlets and becoming a multi-unit franchisee, if the banks and landlords see you have the support of a proven system behind you.
Lettings are doing well even if sales are not, so why not consider adding a letting franchise to your offering? If you already have a business and the vision and ambition to grow a regional, national, or even international, network of your own, franchising can help you reach your goal more quickly and at lower investment cost.
It should also leave you with more motivated people running your outlets, to the benefit of all concerned.
Before joining a network, you need to work out the likely financial projections, both for yourself and the franchisor, to ensure everything works on paper and that all parties concerned are likely to get a reasonable return on their respective investments. Pilot operations will test the various assumptions while all the necessary operating systems, manuals and legal agreements are being put together.
Once everything has been confirmed, franchisees need to be recruited, trained, monitored and motivated to ensure they are operating the system properly. Franchising is simply a different way of doing business - but it is a way that has proved successful for many agents in a number of countries.
Finally, agents already operating franchises can improve and grow their business by researching the business practices of competitor franchisors and through staff training Employing experienced franchise executives to bolster your support team and help your franchisees build better businesses for themselves can also help.
Whichever category you fit into and whichever route you take toward joining the growing franchising community, preparation is key.