Does Running a Franchise Have Any Limits?

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The franchising industry is full of lucrative opportunities for investment and growth. But despite all that the industry can offer franchisees, does running a franchise have any limits? And just how far can you go in the world of franchising?

There’s more to franchising than opening a franchise unit and running it. The options are endless for ambitious, focused and driven people, and with the franchising sector expanding every year, more opportunities appear each day. Discover the benefits and limitations of running a franchise in order to find out if investing is the right next step for you.

How to build a successful franchise business

Building a successful franchise operation comes down to research, franchisor support, and the hiring of a good team to guide and support you, especially if you’re running a larger franchise unit. As a franchisee, you’re in a better position than most new business owners, because…

  • You have access to training and support - Your franchisor is there for you, and your success is their success, too. When you’re confused or lost, you can turn to them for additional training or support.

  • You don’t need previous experience to succeed - With extensive training provided by most franchisors, personality traits like drive and intelligence will be more valuable to you than any industry experience.

  • You’ll benefit from immediate brand recognition - Though the better known the brand, the higher the investment cost, the benefits of brand recognition are many and various. When you’re a known brand, your consumer base is ready and waiting to find you, rather than it being the other way around.

  • You’ll have access to funding options - Investments can vary hugely in price, from under £5,000 to over £50,000. Whatever your goal, most leading UK banks will be willing to lend between 50-70% of start-up costs to investors with good credit histories who are looking to put money into reputable franchises.

How to grow a franchise business

Franchising is an ever-expanding industry, with over 48,600 franchise units operating in the UK in 2018 [British Franchise Association]. To grow with the industry and beat the competition, successful franchisees must be:

  • Passionate about the product/service offered by the franchise

  • Willing to work hard and utilise the training and support provided

  • Good at communicating 

  • Good at leadership, and at hiring the right people for team member roles

  • Good at networking and seizing growth opportunities

  • Skilled at following a proven business model 

  • Focused on customer retention and loyalty

Successful franchisees [...] don't want to have to figure out the best way to do something. They want a system of operation that tells them the best way to do anything associated with the business. They are willing to learn from others to avoid making mistakes, so they can be more successful more quickly.
—Jeff Elgin, Entrepreneur

What are the limits of franchising?

Every business is different, and the limits of franchising will vary depending on the franchise agreement in question. Limits are more operational than financial, with possible examples including:

  • The use of a franchisor-approved supplier list 

  • The following of operational rules and guidelines, including regarding site selection

  • A maximum number of franchises that a single franchisee can run

Generally, in franchising, the limits are what you make them. You can accomplish almost anything, depending on your professional and financial goals, as long as you’re doing so with the approval of your franchisor, and within the confines of your franchise agreement. Here are just a few examples of expansion opportunities worth looking into if you feel you’ve reached your ceiling as a single-unit franchisee...

1. Investing in multiple franchise units

The multi-unit franchising model is designed for franchisees who want to run numerous locations at once. In many ways, the roles and responsibilities will be similar to those required of a single-unit franchisee, but with more balls in the air, the job will become more managerial and more profitable. 

Around a third of franchisees own and run multiple units [British Franchise Association], which should show you how popular this model of franchising is. Multi-unit franchising is often considered a win for both franchisor and franchisee, as the franchisor already knows and trusts the franchisee, and the franchisee can expand their profits. 

If you have a good franchisee who believes in the brand, believes in the corporate team and has the operational and financial capacity to grow into multiple units, it can be super advantageous compared to having to find three single-unit franchise owners who can do what one multi-unit franchisee can do.
—Blair Nicol, FranNet 

2. Becoming a master franchisee

When a franchisor has expanded across the entire UK, they will often consider taking their business overseas to achieve further growth and expansion. This process will be made much simpler with the support of a master franchisee

Master franchising is the most popular model of international franchising, and a master franchisee has rights that a regular franchisee doesn’t. This comes in exchange for having made a larger investment, and for undertaking more responsibilities with the business, setting things up overseas. Often, a master franchisee will be local to the country in which the expansion is occurring, offering local knowledge and expertise.

If you’ve spent many years honing your skills as a franchisee, and you’re ready for the next adventure, consider seeking out a franchise which is newly expanding into the UK. Becoming a master franchisee isn’t easy, and the role can be difficult, but if you have the experience and skill to see it through, it might be the perfect challenge for you and the ideal next career step.

3. Investigating the other side of franchising

If you really feel that you’ve reached your ceiling running a franchise as a franchisee, and you have the capital to make it happen, you don’t necessarily need to leave the franchising world in order to climb to greater heights. You can investigate the other side of franchising, and become a franchisor yourself. 

Whether you buy an existing business and get it fit for franchising, or even build your own from scratch, you should know that the most successful franchisors are:

  • Experienced experts in the industry in which their franchise operates

  • Absolute champions of their brands

  • Able to offer quality training and support to all franchisees and employees

  • Able to listen to and respect the needs, wants and opinions of franchisees and employees

  • Good at recruiting the right people for the right jobs

Running your own business is an exciting journey, shaped by you

Ultimately, your franchising journey is what you make it. With a goal in mind, and the determination to make it happen, there’s no limit to what you can accomplish in the world of franchising. If you’d like to dive in today and make your first investment, browse available opportunities via Point Franchise’s UK franchise directory.

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