Today, we help you figure out if franchising is the right career move for you. In this article, we provide a rundown of the franchise model, which we think will demonstrate what an attractive investment opportunity it is.
Most of you will have heard of franchising and the big-name brands that have used the franchise model to expand to every corner of the globe; I’m sure we’ve all seen a McDonald’s or Burger King in the most unexpected of holiday destinations. But you might not know enough about the business arrangement to have ever considered it as an option for yourself. It’s important that franchising newbies are aware that the model works fantastically for so much more than fast food businesses. In fact, the franchising industry has really taken off in recent years and has never been stronger. So, what better time to give the franchise model some thought and decide whether it’s right for you?
What is franchising?
This is the definition of a franchise, according to the International Franchise Association:
“Franchising is a method for expanding a business and distributing goods and services through a licensing relationship. In franchising, franchisors (a person or company that grants the licence to a third party for the conducting of a business under their marks) not only specify the products and services that will be offered by the franchisees (a person or company who is granted the licence to do business under the trademark and trade name by the franchisor), but also provide them with an operating system, brand and support.”
In other words, you pay the franchisor an ongoing fee to be able to operate under their already established brand and receive their support.
The franchisor and franchisee relationship
It’s very important that you forge a strong relationship with the franchisor, so your business can stand the test of time. Franchisees need to adhere to the standards set out in the franchise agreement in order to use the franchisor’s business model. If you don’t follow these, your franchise and your relationship with the franchisor will suffer significantly. If you want to have complete control over your business, the franchise model probably isn’t right for you.
>> Read more:
- Franchising 101: The Official Franchise Start Up Checklist (Part 1)
- Franchising 101: The Official Franchise Start Up Checklist (Part 2)
- New Year, New Career: No Better Time Than Now to Start a Franchise Today
- Franchising 101: 8 Signs You're Ready to Start a Franchise
- Starting a New Business Doesn't Always Lead to Immediate Success: Here Are 5 Ways to Change That
- It's Never Too Late to Start a New Business
There are around 48,600 franchised units that collectively contribute an incredible £17 billion the UK economy. Therefore, it’s hardly surprising that franchising employs over 710,000 people in the UK, according to the British Franchise Association/NatWest Franchise Survey 2018. This research shows us that the industry is booming, with these record-breaking numbers demonstrating its significant growth in practically every area.
Thanks to franchising, more people are starting their own business and more jobs are being created. These figures show that whatever your background, with the right attitude and ambition, you can thrive…Many of the stats are new records in the sector. There are more franchised units, franchising adds more the UK economy than ever before and more people continue to get employed. The positive growth in these areas looks set to continue in this ever-expanding industry. – BFA CEO Pip Wilkins
Operate under an established brand
One of the biggest benefits of the franchise model is being able to operate under a recognisable brand with an existing customer base. This means it shouldn’t be as hard to attract customers to your brand, as they already should be able to trust the quality of your product or service.
Can secure finance easily
Many franchises have partnerships with major bank lenders, so it is often quite easy to secure funding. This is because franchising is generally considered to be a less risky and more successful route to business ownership than starting up from scratch. With the franchise having a proven track record of success, not only does this look good to lenders, but it takes much of the stress out of the set-up process for yourself.
Before you become a franchisee, you will take part in a comprehensive training programme, so you are completely confident with running the business. You can usually also have access to an operations manual and attend conferences and networking events, where you can share experiences with other franchisees.
Due to receiving this training, you don’t always need to have previous experience in the sector or running a business to be accepted onto the programme. This makes the franchise model ideally suited to individuals who want to follow their passions and enter a different sector.
Strong ongoing support network
The wonderful thing about the franchise model is that you never feel alone. The minute you have a query or are unsure about how to deal with something, you can simply ask the franchisor or the franchise support team. They will usually have years of experience behind them, in areas such as HR, accounts, technical support, sales and marketing, and more.
However, you are still in control of your business. The franchise model provides the independence of small business ownership but with the support and other benefits of a large business network.
The franchise will provide you with proven tools for attracting and retaining customers. Lots of franchises even have a centralised sales and marketing team that generates fantastic campaigns that strengthen the entire brand, and therefore your franchise business.
If you want to benefit from preferential rates, you should seriously consider the franchise model. As you are part of a larger network, you can often benefit from discounted rates right from the start.
Have I got what it takes?
Making sure that the franchise model suits you is only one piece of the puzzle, as it’s equally as important that you, as an individual, suit franchising. There are so many qualities that contribute to becoming a successful franchisee, but we have narrowed it down to our top five. These are being system orientated, having an entrepreneurial spirt, being patient, being willing to learn and having people skills. See our other articles, ‘Franchising 101: The Top 5 Qualities of a Franchisee’ and ‘Qualities and Traits of a Franchisee’ for an in-depth look at what these involve and whether you’ve got what it takes.
>> Read more:
Is franchising right for me?
The franchise model has worked and will work beautifully for lots of people, whether you want to be one of them is up to you. But we strongly believe that if you have considered starting your own business but are nervous about it not being successful or not knowing how to deal with any hurdles along the way, the franchise model could work wonders for you. Browse the best franchises in the UK, and we’re confident you’ll find at least one franchise that you really like the look of that is within your investment range. If you’re still unsure, check out 13 reasons why franchising could be right for you.
Becky Martin, Point Franchise ©