Seasonal Franchising – What you need to know…

Franchising has been shown to be a great way to start your own business. Serviceleavers are known to thrive in a scenario whereby they are given room to think for themselves but with a given formula/mission to follow.

The half way point in the year is the ideal time to investigate seasonal franchising, since you’ve got just enough time to get involved in a summer franchise or to prepare ever more fully to take up a winter opportunity. Here’s what you need to know…

What is a franchise?

A franchise is an established business that sells the rights to other parties to run a small portion of it. The high street is packed with examples of franchises, from branded cafes and burger restaurants through to retailers and other service providers. The franchisor receives a setting up fee and a royalty on the profits but in return the franchisee receives help and support and crucially, gets to trade under a renowned brand name, giving them a stronger start than they’d have by starting up from scratch on their own.

Seasonal franchises

‘Seasonal’ franchising simply means that the business operates to customers for a portion of the year. Examples of this sort of franchising include ice cream or milkshake parlours or gardening services in the warmer months and party planning or other specialist businesses that inevitably revolve around Christmas.

The dream is that you make all of the necessary profit in a relatively short period allowing you to spend the rest of the year relaxing. However, in the real world, this is quite a rare thing since seasonal franchisees face slightly different challenges to year round franchisees.

Other off-season commitments

Running a seasonal franchise could give you six months or more to follow other avenues. If you manage to make the required amount of money you could, of course, spend it at your leisure but perhaps you could look at other activities such as taking on further training or enrolling in an educational course – or you might even decide to use the skills and advice acquired as a franchisee, starting a business of your own on a small scale and seeing how it goes – until the next season’s franchising comes around. It’s possible that you could take up a second franchise operation although it’s fairly unlikely that even a seasonal franchise won’t require some work in the off-season such as refurbishment of premises, marketing activities or tweaking the business plan in some way.

You could also decide to run your ‘seasonal franchise’ all year round while keeping in mind that your yield will be significantly less in the ‘offseason’. This might have an impact on how many hours you open for or how many staff you employ over the period.

Watch the weather

Even year-round franchisees can get caught out by the weather. Cafés might, for example find that the soup they intended to sell on what was forecast as a rainy day becomes less popular than salads as an unexpected sunny spell arrives.

Seasonal franchisees might well end up living in fear that the ‘barbecue summer’ doesn’t show up. A ‘bad season’ could mean a ‘bad year.’

This may be another reason to have at least limited opening hours in the off season – to cover for bad days – and also to take advantage of any unexpectedly positive circumstances, depending on the business.

Budgeting

You’ll need to watch the books very carefully to make sure that the money you earn can sustain you for the rest of the year. It may be worth using a specific savings scheme that you can access later and perhaps even selecting a franchise model with very low start-up and maintenance fees and building it up gradually.

Preparation time

Even if your business is seasonal it still exists in the offseason and will take planning and maintenance. You’ll need to take advice from the franchisor as to their thoughts on things like advertising and publicity and whether it’s a good idea to do a ‘trickle’ campaign throughout the whole year or a ‘blitz’ in peak season.

One advantage a seasonal franchisee has is to have more time to anticipate how much stock they’ll need, enabling them to potentially purchase it out of season and in bulk and saving money into the bargain.

Ideally, at least a portion of your off-season should be spent improving the business to make it better for your clients by the time you reopen.

Staff

You’ll expect to be super-busy in the peak season and are likely to want to employ staff. There are pros and cons for seasonal franchisees. For example, most people want a regular income throughout the year and may not want to work for just a limited period. On the other hand, a limited contract or casual work might suit people such as students, although you’ll have to keep recruiting new people and train them up season-by-season.

Business plan

The best measure for success in franchising is to find a decent opportunity that balances your input with good returns on your investment – both financial and of effort. Look for accreditations such as those awarded by the British Franchise Association (www.thebfa.org) and be sure to do adequate research for yourself; ideally speaking with existing franchisees that are already involved in the company your thinking of investing in.

With seasonal franchising you’ll need to make sure that the business plan looks robust, perhaps more-so than an all-year franchise since you won’t have much time to fix things if they start to go wrong. Your business plan should be subject to regular review with the franchisor.

Cash flow

Planning is important with any business but especially so when you only have a limited window of opportunity. Even in the peak season, depending on the business, you need to make sure that your clients pay you in a timely fashion otherwise cash flow can start to pinch, even when you’re making money.

Service-leavers

Franchisors recognise the key attributes that Service-leavers bring to their business. They appreciate that they’re able to follow instructions to set goals and outcomes and work off their own initiative.

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