With over 44,000 franchise-owned businesses in the UK, 97% of which reporting profitability, 93% are reaching break-even point within the first two years and over 50% are turning over more than £250,000 every year, it is no wonder the number of British Franchising Association approved franchise businesses has been constantly increasing in recent years – even during the economic downturn in 2008.
This was the hot topic discussed on BBC Radio 4’s, The Bottom Line show on 21st June presented by Dragons Den and Newsnight host Evan Davies. With franchisors, franchisees and franchise legal professionals all discussing their experiences, backgrounds and pros & cons of franchising, we have summarised the key talking point for your ease below.
If you’re looking to invest in a franchise opportunity, as the voice of ethical franchising in the UK the British Franchise Association should be your first port of call. All brands approved by the BFA undergo a rigorous approval process and the association provides an abundance of educational resources for those considering a franchise and host multiple franchise exhibitions each year for you to attend and meet dozens of franchisors.
All franchises will have operated a âpilot’ operation for at least six months prior to launching the franchise opportunity – and some of the strongest models may have been tested over many years and multiple locations. The longer and more rigorously tested the model is, usually indicates the model has been put through its paces and, with the right person behind it, will generate a successful business. This is a fundamental factor to the success of a franchise business, compared to the failure of over 95% of independently launched businesses within the first five years.
When you join a franchise, you should never simply be given the operating manual and left to your own devices. Any quality franchisor is there to help support you every step of the way; whether that be with marketing, recruitment, sales, compliance, set-up or general business ownership advice. The best franchise networks will often have franchisees with a similar supportive approach. Ultimately, the more you grow and succeed, the greater the profits for the franchisor and the better the brand awareness for fellow franchisees. Because of this, you often find yourself more immersed in the company’s culture more than you may have initially imagined when buying into someone else’s brand – as Subway franchisee, Rachana Pancholi explained on the Radio 4 show.
A large proportion of franchise brands provide the franchise partners with a dedicated territory of operation; meaning you will be the only franchise operating in that region for your franchise brand. This security means you should have a large, sustainable and sufficient territory to operate in, with no fear of your franchisor allowing their other franchisees to set-up shop next door to you. With this in mind, the legal agreement is in place to protect you as a franchisee and your territory. BFA Affiliated franchising solicitor, Liz Goldstein from Goldstein Legal discusses the legal agreement in more detail on the show.
If you are meeting your projections, have the desire to expand and the plan to support it, quite often you have the possibility of investing in more than one franchise territory with your franchisor. As long as your neighbouring territories have not yet been purchased and the franchisor is happy with your operations to date, you can usually invest in a second, third, fourth or maybe more territories with your franchisor to develop multiple income streams all within the model you know and understand. What better way to grow a business?
In the UK there are over 900 franchise brands in a whole host of different industries; including fast food, home care, property, finance and pets just to name a small handful! Each of these industries will usually have multiple franchise brand and models too, meaning there are plenty of business options to suit your skills and interests – and often, industry-specific experience is not required!
You can click to listen to the full show Franchising – BBC Radio 4 The Bottom Line – with Evan Davis to hear more about the benefits and personal experiences from a range of UK franchise professionals.
To find out more about Radfield Home Care and how you can benefit from its ten years of home care experience, hear about the success of its franchise partners or the guidance its professional support team provides, contact Franchise Recruitment Manager, Ed Gill on 01743 548 550 or email [email protected]. Alternatively, you can download your free prospectus, here.
Get in touch with your local Radfield Home Care office today and find out more about the support we offer and the difference we can make.