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Franchising – the perfect business model?

Franchising – the perfect business model?

Categorised in: Ask Nigel    Posted: September 1, 2019

The past 10 to 15 years have been characterised by huge change, in terms of economics, people migration, globalisation and culture. There is no sign of this abating, change is only likely to be more prevalent going forward.

On the business front we have seen a growing ‘sophistication’ of the customer.

Customers no longer defer to the supplier. They are more knowledgeable, more demanding and expect a higher level of professionalism and value for money.

In business terms this has driven investment in new products and services, creating more energy in the marketplace.

On the other side of the coin however, we’ve seen displacement and redundancy of employees as manufacturing finds a cheaper cost base and technology develops at pace.

One of the great advantages of franchising – and there are many – is that it offers an ideal vehicle for large numbers of individuals to reinvent themselves.

Franchising is the perfect home for people who want to work for themselves AND create personal wealth which is directly related to the effort they are ready to invest.

So, franchising offers the right people the opportunity to be in control; to get rewarded directly for their own efforts and to create a level of security not available when working for others.

Benefits of franchising

The theory of franchising is rooted in an ideal business ‘partnership’ which offers substantial benefits to all involved.

The franchisor brings experience, know-how, proven operation methods, marketing tools, sales training and technical guidance as well as a corporate identity, trademarks and the all-important brand.

Because of this extensive support structure, franchisees can come from a wide range of backgrounds and previous experience. Running a franchise draws on various transferable skills, including project management, marketing, operations and sales. If you’re lacking in any areas, the franchisor is there to help boost your capabilities.

It is this marriage of the skills, work ethic and ambition of the franchisee with the system, tools and structure of the franchisor that makes franchising the success it is. The industry is worth more than £17billion and employs more people than the UK armed forces combined!

And yet, there is unfulfilled potential. Franchising could be even more successful, employ even more people and include even more businesses.

Franchising frustrations

My frustration with franchising is not that it only accounts for circa 9%-10% of retail sales in the UK compared to 45%-50% in the US. Nor is it related to the fact that we still see some failures in UK franchising, or that ‘franchising’ is used to describe everything from a rail network to a football club.

What gets to me is that franchising is not the first port of call for universities and colleges teaching business courses.

We lecture students about how to start up their own business. We talk about taking responsibility for researching their market, for investing in their brand, for planning their go-to-market campaigns, for designing collateral and marketing programmes. And yet, most educational establishments effectively ignore a system that covers all these things so the start-up businessperson can focus their efforts more strategically!

There is little recognition in academia for franchising (with the notable exception of Lancaster University I might add). But what about in government?

Well, you’d think local government would promote franchising as a matter of course, as a genuine means of regenerating their towns and cities. Here is a system designed to enable ordinary Joans and Johns to build their own businesses, within a proven structure with all the ‘corporate’ back up and support that individual start-ups simply don’t get.

In my experience the best you get from local government is a blank and confused look!

What about national government representatives, can they see the logic?

Well, some MPs certainly can. But frankly it will take more effort (and sustained effort at that) from MPs and influential members of the franchise community and the British Franchise Association to get the Business Secretary to become significantly interested.

I look forward to a day when a government reshuffle creates a new post: ‘Minister of State for Franchising’.

Championing the franchise model

I am a franchisor and have been in franchising for some 25 years. It is my fervent belief that there is nothing to match good franchising for creating businesses, creating jobs and ultimately for creating wealth. Just because academia, local councils and government can’t seem to grasp the benefits, it doesn’t mean they aren’t there.

Ultimately, of course, it is down to the franchising community to better promote itself. To make the case for franchising, to put itself forward when the media want a quote on the plight of small businesses, on how a policy change will affect Britain’s entrepreneurs or how the minimum wage will impact our 700,000+ employees.

Franchising has come a long way in the UK. We have many well established, well respected franchise brands on the high street, regularly and competently servicing millions of satisfied customers.

BUT you just feel we could do a lot more!

About the author Nigel Toplis

Nigel Toplis is the Managing Director of The Bardon Group. Nigel sees his key role as providing the vision and direction for each of the businesses, developing new income streams - across the board, recruiting customer focused and passionate Franchise Owners and providing business and management support to my Franchise Owners.

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