To really know franchising you have to live it, smell it devour it.
Over the years I have come across several definitions of franchising – some good, some not.
For me franchising is a business concept designed to create a route to market where anyone – with or without business experience – can maximise their potential through rigorous adherence to a proven business system.
Franchising is neither an industry in its own right nor even a business. But it is one of the fastest growing and most consistently successful means to deliver products and services to the marketplace.
Franchising gives anyone and everyone an OPPORTUNITY to own a business and by following a proven system to be successful in that business – being in business for yourself BUT NOT by yourself.
Running your own (independent) business, you are responsible for absolutely everything – from sales and marketing to administration to staffing and finance to new product development.
Moreover, you are responsible for establishing, protecting and growing your brand.
With franchising, you get all the benefits of being your own boss backed up by a raft of head office support services – including, but not limited to those detailed above. The phrase ‘in business for yourself, not by yourself’ captures the essence of franchising.
The franchise provides access to the all-important brand, but more than that, the franchisor is there to provide experience and know-how within a proven business system, as well as ongoing support by way of marketing tools, website, social media, procurement management, sales training, technical guidance and of course a corporate identity and trademarks.
Getting access to funding can be significantly easier if you are buying a franchise. Good franchisors have long established and strong relations with all banks (and of course Start-up loans) and as such it is often easier, quicker and less costly to get funding as a franchisee rather than as an independent owner.
Running your own independent business can be lonely and expensive. With no one else to turn to for advice or specialist support services such as marketing, training, and business development the only option is to pay for outside suppliers. As a franchisee, access to all of these services are included as part of your franchise package or heavily subsidised.
Furthermore, once you have set up your franchise you will be able to network with other franchisees to share best practice and advice. By being part of a bigger group of people you are able to enjoy economies of scale when it comes to buying services and supplies for the business and benefit from the research and development and business updates carried out for the brand by head office.
Successful franchises can come from all walks of life – I’ve had an ex-greengrocer, a rancher from Patagonia, an airline steward from BA plus people from marketing, design and operations amongst a whole gamut of experiences (we try to avoid asccountants!).
What each successful franchisee has in common, is a desire to succeed, a willingness and propensity to work hard plus an ‘enterpriser’ mentality together with an appreciation and understanding that the franchise model and systems should be followed to the letter.
The franchise model has been tried and tested and like a recipe, must be followed precisely to achieve optimum results and enable the franchisee to achieve a greater level of fulfilment, and financial independence.
Question: are there any disadvantages to being a franchisee?
Answer: Yes.
If you set up your own business, you can do whatever you want – but as the owner of a franchise territory you sign a legally binding franchise agreement and agree to meet the expectations of the franchisor. So, you do have obligations and there are parameters.
There’s no point in becoming a franchisee if you are the type of person who likes to do their own thing, if you are a ‘maverick’ or if you really can’t see yourself as part of a bigger network.
Franchising is not for everyone, but research and the statistics bear out that over a comparable period 80% of start-up businesses fail (NatWest/bfa survey) while over 90% of franchisees are still in business.
To this end there is an overwhelming case to be made in favour of franchising and one thing remains true about franchising – it allows you to be in business for yourself: but not by yourself.