Franchising advice from the bfa
How to choose a franchise
Franchising is essentially the permission given by one person, the franchisor, to another person, the franchisee, to use the franchisor's trade name, trade marks and business system, in return for an initial payment and further regular payments.
In a UK franchise industry currently worth £10.8 billion and comprising 781 franchised units (2007 Natwest/bfa Survey), how do you choose the franchise for you?
Choose bfa members
You should first consult the British Franchise Association (bfa) - the only independent accreditation body for franchising within the UK.
The bfa Franchisee's Guide (sponsored by Lloyds TSB) and free video 'Your Introduction to Franchising', (sponsored by HSBC Bank) provides a wealth of step-by-step information - more than 33% of franchisees buy this unique, independent guide before making their decision.
It contains many additional publications including Business Franchise Magazine and a full list of bfa members. bfa members are recommended as they have volunteered to be 'vetted' by the bfa and to abide by its codes and standards, based on the European Code of Franchising Ethics.
Members are assessed on:
- Their day-to-day franchise business activity
- The terms of the franchise agreement
- The current and projected company financial position
- The disclosures e.g. Director's financial records; the identity of their franchisees.
- Members of the bfa are re-accredited on a regular basis.
The bfa also recommend you attend an accredited Franchise Exhibition - the best way to meet and initially assess many franchisors under one roof.
Consider your franchise
Consider the viability of your potential franchise brand product/service
How viable is your potential franchise brand product/service i.e. will it be easy to market or sell in your specific region?
Can the company provide evidence of a sound business with proof of at least one successful franchised outlet and no significant record of failures?
Cross Examine Yourself
How much time and financial commitment can you give? What are your expectations? Have you spoken to other franchisees to hear their experiences?
Franchising can be a great success
In relation to any other small business, franchising has proved to be successful, with 94% of units still operating profitable businesses 5 years down the line. It is estimated that more than 40% of small firms cease trading within 3 years (Ganguly 1985).
There is other evidence to suggest that franchises are less likely to fail than other types of small business organisations (Castrogiovanni Justis and Julian 1993).
But remember that franchising is not an easy option and will require investment of a lot of hard work and money, particularly in the early stages.
Be realistic
At the end of the day, you as the franchisee must be prepared to be realistic. Many franchisees have risked their home, savings and family relationships by investing in business, consumed by dreams of becoming successful business owners.
The secret is to err on the side of caution and do your homework - make your first call to the bfa on 01491 578049/50.
You can find out more information, and meet the bfa, at a franchise exhibition.
For more about the bfa click here.
Franchisee of the year awards 2008 Leading UK franchises named
The UK's top franchisees have been named in the annual British Franchise Associations (bfa) Franchisee of the Year Awards, sponsored by HSBC Bank and Express Newspapers. The nine national finalists were hoping to scoop the top title and a cheque for £5,000, courtesy of HSBC, as Business Franchise went to press. The winner will be announced at a black-tie gala dinner at the ICC in Birmingham on 2 October. Cheques for £3,000 and £2,000 will also be presented to the Silver and Bronze Winners respectively.
Autosmart - Aberdeen
Frank Sutherland was made redundant at the age of 47 and found the prospect of starting a new career daunting. He was determined to provide a secure future for his family and after a chance sighting of an advert in the job pages; he bought the Aberdeen Autosmart franchise, supplying premium quality vehicle cleaning and maintenance products.
Domino's Pizza - Kilmarnock, Ayr, Clydebank and Govan
Lisa Tobias has gone from being a professional gymnast to an award winning franchisee. She started working part-time for the UK's leading pizza delivery company when she was only 18. Now, aged 27, she owns four Domino'[s Pizza stores in Kilmarnock, Ayr, Clydebank and Govan. She is their most successful female franchisee and is currently planning on opening her fifth store in the near future.
Dream Doors - Nottingham
Husband and wife Trevor and Anne Conduit had always dreamt of running their own business. They have found that owning a franchise gives them the benefits of being self-employed but with the vital support of an established network. Trevor and Anne opened their Nottingham based Dream Doors franchise in January 2007 and are now working on innovative ways to make updating your kitchen as stress-free as possible
Fastsigns - Chelmsford
Despite leaving school aged 16, Jenny Boreham dreamt of becoming a successful businesswoman. After years of working for other people, she found franchising provided her with the opportunity to become her own boss. She bought into the Chelmsford Fastsigns franchise in 1996 and continues to successfully grow her signs and digital print solutions business.
McDonald's - A14 Corridor (Cambridge to Felixstowe)
Mark Richards began his career with McDonald's in 1982 as a staff member and worked hard over the next 12 years to work his way up through the ranks, winning many accolades along the way. In 1994, he bought his first McDonald's franchise in Corby town centre. He has since relocated to the A14 corridor and now owns and successfully runs an impressive seven restaurants between Cambridge and Felixstowe.
Oscar Pet Foods - Honiton
After leaving the Army, Neil Stapleton became a lorry driver, which often resulted in long and unsociable hours. He was desperate to spend more time with his young family and, together with his wife, Lorraine, bought an Oscar Pet Foods franchise. Neil and Lorraine have successfully been running their pet food delivery company for 10years.
Pirtek UK – Stoke
Craig Harrison had worked as a coal miner since leaving school but was made redundant due to a decline in industry. In 1993, he joined Pirtek Stoke as a mobile sales and service technician, later being promoted to centre manager. His on-the-job experience and indispensable knowledge meant he was a prime candidate to become a franchisee and in 2001 he bought the Stoke franchise. He has since invested in sites in Warrington and Wigan.
Venture UK – York & Hull
Angie Baynes began working in her father’s photography studio at the age of 18. In 2001, aged 22, she decided to go it alone and bought into the York franchise of Venture UK. After three year’s’ hard work and with lots of support and guidance from the franchisor, she opened a second photography studio in Hull.
Western Provident Association (WPA) – Hampshire
After 25 years experience in the IT industry, Tina Kemp decided it was time for a change and bought into the Hampshire based WPA franchise. Her personal experience of the company and its outstanding reputation in the industry were factors in her decision to pursue opportunities with the private medical insurers. She has since invested in an additional franchise that is now run by her husband.
The national finalists impressed the judging panel, chaired by bfa President, Sir Bernard Ingham, by demonstrating how they “manage change” – the theme of this year’s Awards.
Awards sponsor HSBC’s head of franchising, Cathryn Hayes, said: “The 2008 national finalists are excellent examples of how the go-getting attitude of the franchisee combined with the franchisor’s collaborative approach generates success at both individual and network levels. “Our mission is to make HSBC the bank of choice for the British franchise industry and we are delighted to play a pivotal role in meeting the financial challenges of this dynamic and important market sector.”
Brian Smart, director general of the bfa, added: “This year it was harder than ever choosing nine national finalists. They are great examples of how focus and drive, when supplemented by the support of a franchisor, results in the growth of a sustainable and profitable business.”
Sponsor Express Newspapers’ franchise and business opportunities advertising sales manager, Geraldine Haenow, said: “The national finalists are fantastic ambassadors for the franchising industry and an inspiration to all those thinking of starting up on their own. They should be proud of their achievements in reaching this stage of the Awards and we look forward to sharing their success story with our readers.
