After conducting research online Alistair Kendall came across The Little Gym, a fitness centre franchise aimed at exercise for children: ‘I had been made redundant and was looking for a way to start a business, but wasn’t fully aware that franchising was an option and didn’t know what it offered,’ says Alistair Kendall, ‘We made contact with the management and went to see one of the outlets in action. It was a business that was already successful in the States and because of the cultural similarities, it looked like it would translate to the UK market well.’
He explains that the support given by his franchisor helped to reduce the pressure of starting a business: ‘We received a lot of guidance and training in terms setting up, but aspects such as finding the premises were left down to us. The way you work with your franchisor is not a boss to employee relationship – they might give you certain operational standards to follow, but how you run or market the business is up to you,’ he continues.
The franchise model
A franchise allows you to take on a licence agreement to trade under a proven and successful brand, for an initial and on going fees. Examples of successful franchises include The Body Shop, McDonalds and Domino’s Pizza.
Although you will benefit from operational support, don’t expect to have your hand held at every stage. A franchisor will be looking for you to have the skills that will allow you to work independently – they won’t want to run your business for you. They will also expect you to put some of your own capital into the venture and on going service costs can be a fixed annual fee or based on a percentage of turnover.
According to Brian Duckett of consultants Howarth Franchising, a good franchise is one that is ‘profitable enough for the franchisor and the franchisee to make a good return on their investment.’
He adds that a successful franchise will ‘be supported by training facilities and management reporting processes that make it easy to track progress and put things right if they start to go wrong’. It’s that safety net offered by your franchisor that is often such a draw for first time entrepreneurs. The franchisor-franchisee relationship will be governed by a detailed legal agreement, but you should be able to develop a culture that is co-operative rather than dictatorial, working in partnership to help the business grow.
Passion and drive
Robina Every, chief executive of successful greeting card franchise Card Connection says: ‘Really it’s all about attitude, we want you to take responsibility and to want to push the business forward, with the support of our business development managers. We’re not looking for out and out entrepreneurs, because they tend to just start their own businesses, but we do want someone with ambition. There are certain things that you can train for and teach, but the drive to succeed isn’t one of them.’
One of the major benefits of franchising is that you are not on your own. As Every points out: ‘It’s in a franchisor’s interests to make sure that their franchisees succeed. Any franchise is only as good as its weakest franchisee, so we look for people who can take this group mentality on board and work as part of the team.’
If you think that franchising is a route that would suit you, you should contact the British Franchise Association at www.thebfa.org.
Top tips on finding a franchise
- Research a potential franchise opportunity thoroughly, make sure that it is profitable and ask to see the accounts to back this up.
- Speak to people who are already involved with the franchise, but make sure you can choose them yourself from a list of franchisees, rather than being given the names by the franchisor. This way, you can be sure that you’re not just being shown the successful ones.
- Make sure that the franchise that you are approaching is a member of a recognised franchise organisation, such as the BFA. This means they follow the guidelines and ethics of that organisation.
- Try not to overstretch yourself financially. Most high street banks will recommend borrowing around 70 per cent of the purchase price for a franchise, but you need to fit the amount you borrow to the potential earnings that you are likely to make.
These top tips are from Robina Every.