A business growth model

Franchising is often referred to as an industry in its own right. This is largely due to its scale and the common use of ‘business format franchising’ as a growth model by the businesses within.

The variety of businesses that use this model as a method of expansion, whilst retaining very good success rates, is testament to the success of the franchising concept – both for franchisors (the businesses which are using franchising to expand) and franchisees (the individuals who have joined a franchise network so as to run a franchise).

The formation of the British Franchise Association (bfa) in 1977 marked a significant leap forward in the industry and its approach by providing a professional, ethical and subsequently very successful backbone for the industry. Set up to accredit and promote excellence in franchising, the bfa accredits franchisors based on a code of business practice and the European Code of Ethics for Franchising. As a result, franchising now encompasses a multitude of business types and consumer markets and has well established itself as a respected and highly regarded business model.

One of the key reasons for the success of franchising is the ongoing support which is available to franchisees through the franchisor’s head office. The franchisor has already gone through the pain of finding out what works and what doesn’t – they have invested in the systems and are now willing to teach their franchisees how to replicate it. However, the franchisee must follow the whole system, he cannot pick and choose which parts of the systems he wishes to use. It is very much all or nothing. But if a franchisee is paying a considerable amount of money to use a proven system, why wouldn’t he/she follow it?

  • Stephen Sowerby
    Auditel - Franchisee case study

    Stephen joined Auditel in March 2011 following a career as a chartered accountant in KPMG’s risk advisory department.

    Read the full case study
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