More booms than busts (Daily Mail franchise story)

 More booms than busts

Daily Mail 07.01.08

By: Linda Whitney

STARTING your own business traditionally means doing everything yourself, but there is another way. A franchise means you start up with help from an experienced company, and nine in ten franchises succeed, while three in five stand-alone businesses are gone within five years.

So what is a franchise? A company with a tried and tested business idea (the franchisor) sells you (the franchisee) the right to run a business using its name and business format. You own and operate the business, but the franchisor retains control over the way you market and sell the products and services, and sets quality and standards targets.

With a franchise:

You don't have to come up with a new idea — someone else has tested it first.

Well-established franchises often have national advertising campaigns and a well-known name.

Good franchisors provide you with a blueprint for running the business and all the training you need.

Banks favour established franchises, so it is likely to be easier to raise start-up capital.

Franchisors can bulk-buy goods, which means franchisees get them at discounted rates.

All this comes at a price. You pay an initial fee, which can be anything from a few hundred pounds to a six-figure sum, followed by a monthly fee to the franchisor. In return, the franchisor should provide training, product development, advertising, promotion and management services.

To find out more about franchising, see thebfa.org.uk, the site of the British Franchise Association (BFA), the industry's self-regulatory body, where you can buy franchisee guides at £29..

CRUISING INTO BUSINESS

THE holiday buying season is in full swing, but if you want to get into the travel trade yourself, a franchise could be the best way.

'To start up as an independent travel agent, you must provide Association of British Travel Agents (ABTA) and ATOL bonding, which will typically cost about £100,000 plus a percentage of your projected turnover,' says Louise Smith of travel agency franchise Global Travel Group.

Setting up as a franchisee solves the problem if the franchisor provides bonding.

Global provides ATOL bonding plus a client trust account which guarantees clients' holidays in case of supplier bankruptcy.

You can start from home and the initial investment is £14,995.

Being part of a larger group also means you get better discounts and make higher commission.

'We have over 300 agents, so we get bigger discounts, and you get more commission than if you were a single agent,' says Graham Shuter, of Holiday Direct Travel Group, which offers a £3,980 business opportunity.

Accessible Travel and Leisure (ATL), which specialises in holidays for clients with disabilities, has recently launched a franchise.

You advise the less mobile about suitable holidays and get a fixed percentage of the booking fees.

Start-up costs £13,975. Martin Spence (pictured) always loved travelling, so after 20 years as an engineer with British Airways, he bought a Go Cruise franchise last year. 'I have travelled all over the world and been on five cruises, which helps me offer customers first-hand information,' says Martin, 47. He now sells cruises from home in Farnborough, Hampshire. 'It's a competitive market, so I try to stand out by offering very good personal service. I match the client to the cruise. It pays to give advice and be helpful and supportive because when people have a great holiday, you build your business by word of mouth.' He advises: 'You must be a good communicator and enjoy talking to clients, and IT skills help.

'Talk to other franchisees to find out the level of commission they are making to see if you can earn the returns you want.' Geoff Ridgeon of Go Cruise says: 'It helps if you have commercial or sales skills, but you do not need travel industry experience.

'At the start you get a short cruise in the Bahamas or Caribbean so you have cruising experience.' The start-up cost is £16,000.

Go Cruise 01473 292 019, ATL 01452 729 739, Global 0870 429 8100, Holiday Direct 0870 750 9400..