Franchising is a great business move if you want to be self-employed and run your own operation without having to come up with the latest ground-breaking idea. Essentially, you bring an established brand to new markets, which allows you to take the reins and grow the business, but without the risks often associated with launching new start-ups. But before you embark on the journey, you need to carefully consider the brand’s existing reputation and decide if the business is something you feel passionately about.
Having previously worked in the construction and distribution sector in various corporate roles, becoming my own boss was something I felt very strongly about. At a tradeshow in 2010 I met with Biothecare Estetika, a unique Spanish beauty brand that specialises in non-invasive beauty and aesthetic treatments, which was looking for a UK master franchisor. I was taken with the company straightaway and spotted the market opportunity for quality beauty treatments that deliver real results for customers. However, I wasn’t alone – at least five other companies were interested in the master franchise, so I knew I would have to fight for it.
Winning the master franchise
Determination and showing the brand how much passion and vision you have for it is critical, particularly when the competition is rife. But you also have to do your homework. Be sure to visit the company in person and do your due diligence before pursuing the opportunity. You need to ask yourself if you can really replicate the brand in other markets. There is an old saying – whether you think you will, or whether you think you won’t (be successful) you are probably right. A positive mental attitude and ability to ‘make things happen’ is essential in business.
Then it comes down to funding. To buy the Biothecare brand licence in the UK for the master franchise, I had to liquidate all my assets from the past 15 years of my life, which was no easy feat. Biothecare was very impressed with my commitment, role and strategy and where I was going to align the brand, so they decided I was the best fit for the job. Anyone wanting to take on a franchise needs to think realistically and make sure they are in a good financial position. I took more of a risk with a master franchise but thoroughly believed I had what it took to succeed – this kind of outlook is crucial.
Choosing the right location
You can never underestimate the importance of location. When opening your own franchise store you have to consider general demographics of the specific area and how it will fit with the brand. Different cultures can bring about different levels of opportunity. It’s all about identifying your key target markets and opting for locations that will bring highest demand. A franchisee will be expected to know their local area well, as the franchisor or master franchisor will likely be led by you to some degree. This level of local expertise is vital as ultimately, it is going to be your business – this is a real strength of franchising.
Another factor to consider is footfall. If you’re a retail brand, ideally you want to be located in a prime high street location or busy shopping centre. You then have to weigh this up with rent prices and the costs for refurbishments and fittings. Sometimes it’s better longer term to go with a quieter location that will have significantly less rental and business rate costs. This will mean significantly more work for the franchisee but, it should return them a better bottom line after the first 18-24 months. I work closely with each franchisee to make sure they are getting the best deals possible in the right locations. You can’t rush it, it takes time and it pays off to be in the right location for your business.
Getting the franchise off the ground
It took eight months from my initial conversation with Biothecare to launch the first store in Bristol, but it wasn’t plain sailing. One of the first challenges you are likely to encounter is securing the four walls of the business. Commercial landlords and letting agents are a tough nut to crack and extremely difficult to persuade for businesses that are unknown to the market. Make sure you leave no stone unturned when identifying potential properties and agencies to maximise your chances. You have to be tenacious – don’t take no for an answer and challenge them!
The next hurdle is persuading the local council to get advertising and marketing consent. Again, these conversations are testing and you have to keep persevering. In the end, I brought in a legal expert to help fight my case. If you lack experience in this area, hiring a professional or using existing contacts if money is tight is really worthwhile to seal the deal.
Having invested heavily in the Biothecare license, I had very limited money in the pot for marketing. No matter what your budget, you have to get the brand name out into the local market and get customers through the doors. Through online research, I had seen that Groupon was helping businesses do just that.
After careful planning with the Groupon account manager, the first deal went down a storm and sold over 150 vouchers – it’s a great way for new businesses to benefit from models that have a large and established customer base. However, the key to success is to provide each and every customer with personalised experiences that encourages them to come back again and again. You have to focus on cross selling and upselling as much as possible. By providing the highest level of customer service, our stores have retained on average 50-60 per cent of our Groupon customers, which has made the partnership a key part of our launch strategy for each new franchise and has supported the opening of 10 further stores across the UK.
Maintaining the relationship
While each franchisee is individual and privately runs the business, you have to be prepared to follow specific business processes from the franchisor, so that the brand image and messages are aligned. Franchisees often have to keep things like branding, packaging and even store layouts and employee training the same, so that customers receive the same experience regardless of which store they go to. This can be a challenge as you might have different ideas about how to run certain operations. You have to accept that some elements will be out of your control, while others such as marketing tactics are more open to compromise.
In 2012 we decided to expand the Biothecare brand internationally. To do this, I worked with two other master franchisors who have introduced the brand to the Middle East and Africa. Having local experts to manage this growth is a key advantage, if you don’t possess in-depth knowledge of the different geographies you want to target. You need to account for different cultures and regulations that other countries have. What has helped ease this process is advancements in technology such as SEO and LinkedIn, which makes recruiting franchise candidates across the globe much quicker.
Is franchising for you?
There are many benefits to running a franchise, but you do need to be 100 per cent sure on the business model and weigh up the pros and cons before making your decision. First and foremost, you have to really have passion for the brand and the drive and vision to take it forward.
Here are my top tips for success:
- Know your market and business practices – Sector knowledge and business management expertise is a must. For example, you need to have the skills and a proven record of managing people and small teams, understanding what makes good customer service and what drives sales. The difference a stable, well-managed and focused team makes compared to the reverse is massive. If a franchisee cannot get this right, it will always be an uphill struggle.
- Put the hours in – The job often entails long working days, particularly in the early stages. You have to remain focused on the end goal at all times.
- Build a network – Despite franchise support, starting and running your own business can be lonely. Create your own community of friends and family, along with peers to help you through it. They can also introduce you to valuable new contacts.
The benefits of setting up a franchise early in life
Rik Hellewell, franchising expert and founder of oven valeting business Ovenu, talks about the many advantages of setting up a franchise in your twenties, or even earlier.
If you’re reading this while thinking about what to do with the rest of your life after leaving college, or if you’re young and struggling to find a job, then read on. Perhaps you’re thinking about starting your own business, but the risk factors associated with that are stopping you from taking the plunge? Franchising can be the ideal business model for anyone considering setting up in business, and investing in a franchise in your twenties can be the ideal choice because of the established brand and support network it offers.
At our company, we have franchisees of all ages and backgrounds and there are numerous case studies that provide testament to the fact that anyone with no prior experience of the oven valeting industry can set up on their own, and go on to develop a successful franchise business. In Uxbridge and Maidenhead, for example, we have two of the country’s youngest franchisees who are both aged 23. Richard and Ryan are bucking the trend as business owners in their early twenties, as franchisees are typically an average of 49 years old, according to the Natwest BFA Franchise Survey.
It’s still true that most small business owners also fall into the 35 to 44 (25 per cent), 45 to 54 (31 per cent) and 55 to 64 (26 per cent) age categories, according to the survey by ‘Start your own Business.’ However, young people are starting to see franchising as a very viable business opportunity and career path.
Many young people do not have the skills and experience that it takes to make a start-up business a success, but they still want to be their boss. Maybe being a business owner has been shelved until you get that all-important experience and industry contacts, but do you really want to put your dreams on ice? Many young people are saying a definite ‘no’ to that these days, as they’ve become fed up with waiting for a job to come along or simply want to take charge of their own futures. Perhaps the popularity of programmes such as Dragons’ Den and The Apprentice has inspired a new generation of young people wanting to be their own bosses.
While lacking in experience, young people often have the confidence and energy needed in spades to set up their own franchise business. However, while it is important for young franchisees to have confidence, and business success can come from having a positive and go-getting attitude, it has to be tempered with a willingness to learn from peers. A franchise package typically includes a support system and training designed to provide the knowledge a new franchisee needs to run the business.
Twenty-three year old Richard Charalambides, franchise owner of Ovenu Uxbridge, says that more young people should consider setting up their own franchise business – especially in today’s tough economic climate where jobs are hard to find. Richard explains that he took the decision to set up his own business after finding that many employers were only offering short-term work in the downturn. He came to the conclusion that a strong franchise, rather than starting a new business from scratch, would be the best, and most straightforward, option for him, especially in a recession. Richard is a young man who took his future into his own hands after experiencing repeated setbacks in finding work, and is finding success in generating business and gaining loyal repeat customers.
Last year, Ryan Penniston, now 23, also became one of the youngest-ever franchisees in the 105-strong Ovenu network. Ryan took over the reins of Ovenu Maidenhead from his father Adam, 45. Ryan’s Ovenu business now provides an environmentally-friendly oven cleaning service to hundreds of satisfied clients and residential properties across Wokingham and Maidenhead.
Ryan, who previously worked in the licenced trade, explains, ‘My dad inspired me to follow in his footsteps, and I had always wanted to be my own boss, so when the opportunity arose to invest in the business, I jumped at the chance. I have been told that I am one of the youngest franchisees ever to take on an Ovenu franchise, which makes me even more determined to succeed at running my new business and to prove myself.’
A lack of experience is exactly why young people should think about franchising. They may not have the life experience, but with a franchise they have can access all the support they need. In addition, many younger people are more likely to benefit from the strong, and more immediate, support structures that a family can provide. Having mum and dad and any siblings based locally, or even under the same roof, can mean that the young franchisee has access to a wide experience base, and the vital additional support that he / she needs. Often, such franchises can become something of a family concern, particularly if parents have been involved in lending money to buy the new business in the first place.
On the flip side, the biggest barrier facing young people is funding. Young people can look into the Enterprise Finance Guarantee scheme, or else approach parents, or, as Ryan did, take over their father’s business.
Whatever way you look at it, franchising can be a very viable solution to any young person who is thinking about starting his or her own business. It has the support without a large part of the risk, and can be an excellent career choice for anyone thinking about what to do when they leave college. I certainly foresee many more young people like Ryan and Richard setting up as franchisees in the future.