At the beginning of every year there is a renewed interest in franchising, and despite the challenges with Covid and Brexit, this year is no different. Buying a franchise is not a guarantee of business success but pick the right one and it should dramatically improve your odds. Why? In a nutshell, someone has already built a viable business, created a strong brand, proven their business model, properly documented all the relevant systems and procedures and then, for a fee and an ongoing royalty, will provide you with comprehensive training, on-going support and everything you need with which to replicate their success in a new location.
That’s the theory of course, but if you want to have your own business, why not just start one and save yourself all these upfront fees, ongoing royalties and restrictions? It’s an excellent question and one with multiple parts to the answer.
In 2018, NatWest and the British Franchise Association produced their most recent report on the health of the UK franchise industry. £17.2bn turnover; 93% of franchisees reporting profitability; a third operating multiple units; 18% under 30 years old and 30% female.
Given that a substantial number of business start-ups close their doors before getting past their second year, 93% of franchisee-owned units reporting profitability is a seriously impressive statistic. Given the additional hurdles we will all have to leap over in 2021, franchising feels by far like the safer way to take control of your career and be your own boss.
Franchising is all about the replication of a successful business, that’s the essence of the safety net, but how do you know which one is right for you? Figures vary, but it’s widely accepted that there are at least 950 franchise brands across the UK. Some of these will be excellent, some of them won’t. Choosing the right one for you takes time, planning, research and complete honestly from everyone involved: you; the franchisor; even your partner or family.
On the bfa website or any of the banks franchise pages, you’ll find lists of great questions to ask a prospective franchisor, but it’s crucial to begin with some questions closer to home:
What are you good at?
What do you enjoy doing?
What kind of environment do you like working in?
Do you like building teams or working alone?
How much money can you invest?
How much money do you need to make in return?
Are you really prepared to put the work in?
Are you able to commit long term?
Do you really just want to be your own Boss, or are you driven to build a successful business?
Are you a born entrepreneur or are you prepared to follow a strict model dictated by someone else?
That last question is a particularly important one. We meet prospective franchisees all the time who profess to be filled with entrepreneurial spirit – but here’s the thing to consider: If you want to own a fast-food business for example, and you want to be able to give it a great name, design the menu, create a logo, choose the staff uniform and set your own prices, then you will need to start your own business… becoming a franchisee will not tick your boxes. As we said at the very beginning, the reason you invest in a franchise is to get training, on-going support, a proven business model and marketing systems to follow and a brand name to operate under.
Assuming you’re happy to embrace the notion of following a system, then there’s the question of what kind of franchise you should consider. Many people look for something completely different to what they may have spent their career to date doing.
For example, you might think that what you really want to do is get outdoors and build a business that keeps you active and healthy and learn new skills? You could look at a garden maintenance franchise. You might want to put your management skills to the test in a brand-new sector, so perhaps a food franchise could be the way to go. Or if you simply want to keep more of the money you make for yourself and be your own boss doing what you know, then there are plenty of white-collar franchises that will suit you perfectly like accountancy or recruitment or business consultancy.
Whichever sector you choose, one key part to your due diligence process will be attending a discovery day which is likely to be online for at least a good chunk of the year. These early meetings are about fact finding, but also about building mutual trust. You are entering into a business partnership, which is expected to last a minimum period of five years. It is therefore important that you like, respect and trust the franchisor and they will be looking for those qualities in you.
Do not be afraid to ask searching questions when either – the franchisor should be able to answer them all unless there are valid reasons such as company confidentiality, which might preclude disclosure of certain information. Again, trickier to do this year, but speaking informally to existing franchisees about their experiences is invaluable, but be respectful of the franchisor’s guidelines here – they are likely to want to at least know you are semi-serious before they let you disturb their franchisees at work.
Every franchisor and franchisee will have their own story to tell about how they’ve coped in the last 12 months and the changes they’ve likely had to make. One thing is almost certainly sure though – they will all feel lucky to have been part of a franchise network rather than left alone to fend for themselves. There is a lot of strength in numbers and in shared experience – remember franchising is the ultimate opportunity to be in business for yourself, but not by yourself. Good luck!