General Q&A on franchising.

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Want to be your own boss, but wary of going it alone? Here’s how business format franchising could be just what you’re looking for.

WHAT IS FRANCHISING?

Business format franchising is when a company (the franchisor) develops a successful trade name, brand and business system which it licences to an individual (the franchisee) who uses it to build up a successful business, usually operating in a defined geographical area. It’s a win-win scenario; the franchisor expands their brand using other people’s money, while the franchisee is given a business plan known to work, along with ongoing support and all the marketing advantages of operating under a well known name.

HOW IMPORTANT IS FRANCHISING TO THE BRITISH ECONOMY, PARTICULARLY NOW?

Very; it generated more than £11.4 billion in 2008. The chairman of trade body the British Franchise Association (bfa), Mike Goddard, told us: “These are successful businesses with a high percentage chance of success because of the very nature of the support they get through the franchising network. I really think you can’t understate the contribution franchising makes to the British economy.”

IS IT A SAFER WAY TO SET UP A BUSINESS?

According to Mike, a reputable franchising organisation will have a success hit rate of 90%-95%. “Nothing in business is guaranteed, but if you look at a similar statistic for non-franchised business, it’s much lower, below 50%,” he said. Also, since franchises are “proven” systems, banks are more likely to lend you money; they know reputable franchisors will provide the training, support and advice needed to maintain their brand.

ARE SERVICE LEAVERS PARTICULARLY SUITED TO FRANCHISING?

Mike Goddard believes Service leavers are disciplined, well motivated, not afraid of hard work and very good at following structures and procedures set down to get a job done. Those are qualities franchisors love in their franchisees.

WHAT KIND OF FRANCHISE SHOULD YOU GO FOR?

If you don’t like pizzas, don’t go for a pizza-making franchise; you need to choose something that you’ll still be happy doing five, 10 or even 15 years down the line. Go for a business you feel comfortable with and where you are confident the franchisor will provide an appropriate level of training and support. Whenever you can, speak to existing franchisees to get the inside story.

WHERE CAN I GET MORE INFORMATION?

Start at the bfa; franchisors which are full members have been vetted and passed an accreditation procedure which ensures they adhere to agreed ethical, legal and financial standards. However, you should still do your own research and diligence checking; after all, you’re potentially going to invest a lot of your money into a business and you need to minimise the risks, particularly if you have dependents.

The bfa-recognised whichfranchise.com website is also an excellent general source of information, and there are regular franchise magazines and exhibitions throughout the year.

Find out more;

British Franchise Association

01865 379 892, www.thebfa.org

Which Franchise

0141 204 0050, www.whichfranchise.com

Some statistics;

The most recent NatWest/BFA franchise survey (the 25th annual report on the sector) confirmed the following facts about business format franchising in the UK during 2008, when the British economy entered recession.

• Estimated annual turnover of the sector £11.4 billion, down 8% on 2007 (£12.4 billion) but still up 5% on 2006 (£10.8 billion).

• Number of business format franchisors: 809, up 3.6% on the previous year.

• 82% of franchisors believe business will improve or remain the same in the next 12 months.

• New entrants can expect to pay an average of £50,400 in franchise fees and other costs, down from £64,900 in 2007.

• Less than one third of franchisees are under 40 years old, compared with more than half in 1992.

• Roughly 467,000 people are directly employed by the franchising sector in the UK.

• Banks continue to be the most important overall source of finance.General Q&A on franchising.

Gas-Elec Franchisee (Oct/Nov 09)

INSPECTIONS GUARANTEED

Later this year, former RAF electronics engineer Ian Kavanagh will happily renew his franchise agreement with gas-elec. He explains how the gas and electrical inspection franchisor has provided him with the civilian career he was looking for.

After 25 years in the Royal Air Force as an electronics engineer, 44 year old Ian Kavanagh, from Telford in Shropshire, was looking for the right career in civvy street.

“I had been researching different franchising opportunities for several years as I wanted to be my own boss when I left the Air Force,” he told us. “Whilst on detachment in Kuwait I came across gas-elec, which carried out engineering inspections required by law. So I set up to meet with the gas-elec team while on R&R, and put my notice in on my return. The rest, as they say, is history!”

Ian chose the franchise route as they have a proven business model, which gives a far greater chance of success, plus back up and support so necessary for any new business venture.

gas-elec was launched as a franchise in 1997 to provide gas and electrical safety inspections in the residential lettings sector. The business has grown rapidly into a national network of successful regional managers and local engineers. Today there are more than 126 franchisees operating from 18 regional offices.

“I slotted into the business from day one, which was partly because I was keen, but largely because the franchisor held my hand until I was ready to go it alone,” he explained. “Moving from the forces to civvy street was a complete culture shock. The mindset is very different from the ‘can do’ attitude in the services.”

“The first year was a steep learning curve and the priority was to turn a declining area into a growing one and to rebuild gas-elec’s reputation,” he said. “This I achieved with a great deal of co-operation from the engineers and guidance from the franchisor – everyone works as a team and strives for the common good.”

Ian took on the franchise in September 2004; while it wasn’t all plain sailing, by 2008 he had doubled the first year’s sales. “It’s gratifying to see the results for your efforts,” he added. “It’s all about providing an excellent reliable service, at a fair price, and naturally reaping the financial rewards that hard work deserves.”

Ian’s business has grown in value by the equivalent of an extra £1k for each month he has been with gas-elec. “I intend to continue that growth and need quality engineers with the right attitude to enable me to do so,” he said. “gas-elec is an excellent opportunity for people leaving the forces to generate a good level of income, where they have stability, and are rewarded financially for their efforts, without having to spend long stints away on detachment leaving worried loved ones behind.”

In spite of real challenges during 2008 and 2009, the growth of the network has continued to be healthy, although recruitment has continued at a slower pace than before, due partly to lack of finance in the current climate.

gas-elec is actively seeking and developing new revenue streams for the franchisees and recently embraced new technology, investing immense sums in increasingly sophisticated systems to create an internal and customer facing IT infrastructure that greatly benefits the business.

“This saves huge amounts of time and allows us to react instantly to customer and engineer enquiries, to analyse customer data and convert this into sales and marketing opportunities,” Ian explained.

Which may be why he has no doubts about signing up to gas-elec for another five years.

gas-elec

Founded in 1996, gas-elec carries out impartial safety inspections and light remedial works. Its unique inspection service provides the residential lettings market with multiple inspections of the gas and electrics in just one visit. gas-elec has more than 126 franchisees operating from 18 regional offices, who this year will carry out more than 120,000 safety inspections in domestic properties throughout the UK. For more information call 0800 015 2030, or visit www.gas-elec.co.uk.

Red Hot Oven Cleaning Opportunity

Ovenclean, the UK’s number one domestic oven cleaning franchise, reports that business is bubbling for franchisees up and down the country. The reason, according to CEO Julian Minwalla, is simple.

“Cleaning the oven is top of the ‘most hated chores’ list and every householder, school and hotel has an oven, which needs to be cleaned regularly,” he says. “All of which adds up to a massive potential marketplace for Ovenclean!”

Ovenclean franchisees operate from fully equipped professionally liveried vans, benefiting from low overheads and high flexibility, cleaning and restoring ovens to pristine condition within hours.

The franchise is proving a hot opportunity for practical, hard working people, looking to build a profitable business. According to Julian, Ovenclean offers a simple and recession-resilient business model with thorough training and continued support, as well as a unique environmentally friendly cleaning system, an established brand and strong proven demand.

To find out more and request a free information pack, call 0800 988 5434 or visit www.ovenclean.com.

On The Road

Want to be your own boss but don’t fancy being stuck in one place all the time? Why not get on the right road with a mobile franchise?

WORDS: PAUL F COCKBURN


After years of following orders, the idea of becoming your own boss in civvy street can be very attractive; not least the idea of being able to choose what you do, how you do it – and when!

Of course, setting up on your own does have drawbacks; not least the fact that… you’re on your own. The buck starts and stops with you when it comes to attracting – and keeping – customers, getting the job done properly, and making sure that all your finances are up to date.

Which may well explain the rising popularity of franchising – where you’re running your own business under the banner of a company that has, essentially, done all the hard work for you – they’ve tested the market, sourced the best products, and learnt from their mistakes. You’ll still have to work hard to make a go of it, but at least you have good reconnaissance on the business front line, and head office back-up just a phone call away that has a vested interest in your success.

MOBILE FRANCHISES

If, during your time in uniform, you’ve got used to a life on the move, the prospect of working in the same place, day after day, might not appeal. Luckily, with 21st century Britons increasingly expecting services and products to come to them, rather than the other way round, there are growing opportunities to get a business on the road.

Mobile franchises – what are often still called ‘man and a van’ businesses, despite more women getting involved – are increasingly common and cover a wide range of sectors: from household and kitchen cleaning to catering and delivery services; from car valeting and DIY trades to lawn and garden maintenance; and everything from drain cleaning and pet care to snack and fast food delivery.

These are just some of the van-based businesses that you could become involved in through franchising. More information on the opportunities available can be found through the British Franchise Association – the sector’s trade body – and the range of franchise exhibitions, magazines and websites currently available in the UK.

MOBILE FRANCHISES – THE ADVANTAGES

Mobile franchises come with certain advantages:

  • Mobile franchises can be among the least expensive businesses in which you can invest, certainly compared with those requiring large premises and numerous staff. Some mobile franchises will not even expect you to buy the van and equipment, although leasing is usually more expensive in the long run.
  • Your vehicle is your office. With just you on the road, there’s no need to hire and fit-out an office or hire somebody to answer the phone – keeping your costs down and your profits up.
  • Your vehicle is also your biggest promotional tool. With the business name and contact details across the sides of the van, you have a prominent advert that will be seen by thousands of people every week as you drive around your area.
  • You have flexibility to change your day and adapt your lifestyle to suit your business needs – and vice versa!
  • You may be working for yourself, but you’re not on your own. Reputable franchisors provide training, advice and a range of support (from administration to marketing) at all stages of your business – from initial start up to the end of the franchise period. As you’re using their carefully nurtured brand, they have a real interest in ensuring you succeed.
  • You’ll be part of an expanding sector in the economy, able to react to growing customer needs – not ‘stuck’ in one place.
  • Many van-based mobile franchises enable you to build on your own success by hiring additional drivers and vans to develop your business onto the next level.

ON THE ROAD

When it comes to mobile franchises, it’s fair to say that – as with most businesses – profits are there to be earned, rather than just taken. You’ll have to put in the time and effort; almost certainly, that’ll mean spending hours behind the wheel, on your own, travelling between customers – most franchisors will not overpopulate any particular geographical area with too many franchisees, so you’re unlikely to be restricted to just your local neighbourhood.

As with any franchise or business start-up, there are important points to consider. Finance, as ever, is vital. Make sure you don’t borrow more than you can afford to pay back; and that you maintain a sound financial way of thinking as you stop off at that roadside cafe. There’s plenty of advice on offer, from sector body the British Franchise Association, websites including whichfranchise.com and the numerous magazines and exhibitions around the UK.

If all of this doesn’t appeal, then chances are that a mobile franchise isn’t the kind of business for you. But, if you’re looking to be a kind of Lone Ranger – travelling alone (or maybe with your own  loyal ‘Tonto’ sidekick) – who goes in, does the job, and then move on, then a van-based mobile franchise could be just what you’re looking for.

More:

British Franchise Association

01865 379 892, www.thebfa.org

More:

Which Franchise

0141 204 0050, www.whichfranchise.com

FRANCHISING: THE BASICS

• Business format franchising is when a company licences its trade name, brand and business system to others, usually in return for an initial payment and a monthly royalty fee.

• The UK’s franchise sector generated more than £11.4 billion in 2008, employing some 467,000 people.

• Reputable franchisors have a success hit rate of more than 90%, according to Mike Goddard, chairman of the British Franchise Association. He told us: “If you look at a similar statistic for non-franchised business, it’s much lower, below 50%.”

• Mike Goddard believes Service leavers  have the discipline, motivation, and ability to follow structures and procedures set down to get a job done – all qualities franchisors love in their franchisees.

• The bfa is the main trade body in the UK; full members have passed an accreditation procedure which ensures they adhere to agreed ethical, legal and financial standards. Call 01865 379 892 or visit www.thebfa.org for more information.

Business Opportunities Galore at the British Franchise Exhibition in Manchester

FranchiseExhibHundreds of opportunities to launch a new career will be found at the North of England’s most comprehensive franchise event yet.

The British Franchise Exhibition, at Manchester Central on 11-12 June 2010, will bring together an exciting range of business opportunities, as well as an impressive range of new initiatives designed to accommodate the needs of anyone looking at franchising as a new career challenge.

Providing a comprehensive snapshot into the world of franchising with an exciting list of exhibitors and extensive free seminar programme, the British Franchise Exhibition will offer priceless information and advice to business-minded people. The Growing Your Own Business Conference, renowned Franchisee Panel and launch of the Business Plan Clinic also form part of the show’s exciting programme, that each help to create this first-class, informative and worthwhile event.

“The 2010 British Franchise Exhibition in Manchester will offer everything a potential business owner needs to research and develop a new career in franchising, from business opportunities to advice on growth, expansion and strategy,” said Franchise Exhibition Manager Adrian Goodsell, of event organisers at Venture Marketing Group.

With exhibiting companies including Architectural Services, Expense Reduction Analysts, MOT2U, Cash Generator and many more, The British Franchise Exhibition has opportunities to suit every budget and interest. In addition the many valuable new initiatives have been developed to offer visitors the latest news, information and advice about franchising. Among this exciting list is McDonald’s Open Days, which will be held onsite for the first time ever at the event.

With a private seminar room, two sessions a day and one-on-one meetings to discuss future career prospects, the McDonald’s Open Day is expected to attract many potential franchisees looking to invest and learn more about the secrets behind the success of the famous family restaurant. Sessions can be booked at www.franchiseinfo.co.uk.

“We are delighted to be involved in this year’s British Franchise Exhibition in Manchester. We look forward to meeting prospective franchisees at the Open Days we will be holding at this notable franchising industry event,” said Head of Franchising, McDonald’s UK, Derek Rogers,.

The British Franchise Exhibition also boasts its renowned free seminar programme; the Franchisee Panel, exclusively supported by Whichfranchise.com; and the all-new Business Plan Clinic, which is sponsored by Lloyds TSB.

THE FREE CONFERENCE

A comprehensive conference programme with dedicated category ‘tracks’ will run throughout the two-day Manchester event. Featuring presentations run by the British Franchise Association (bfa), Growing Your Own Business keynote speakers, and franchisees and franchisors, the most important topics in franchising are set to be discussed. Tracks include women in franchising, couples in franchising, hands-on franchises, management franchises, franchise resales and high-level investment franchises.

The bfa will also host three seminars a day, delivered by existing franchisors, solicitors, banking representatives and consultants; whilst keynote speakers from renowned franchising brands will feature on Friday and Saturday.

The Growing Your Own Business conference will feature high profile presentations on each day. Focusing on the most essential aspects of developing a business, the Growing Your Own Business seminars will include advice covering marketing, website optimisation and planning.

FRANCHISEE PANEL

A panel of existing franchisees will candidly discuss the realities of franchising and their experiences on both Friday and Saturday. Facilitated by Whichfranchise.com, the Franchisee Panel will enlighten visitors about franchising from a first-hand perspective, giving them the benefit of hearing from those who have ‘been there and done that’.

BUSINESS PLAN CLINIC

A brand new feature at The British Franchise Exhibition, the Business Plan Clinic Exhibition will offer aspiring business owners the opportunity to learn all the essential facts and figures around franchise funding and investment requirements. Financial consultants and representatives from the bank’s franchising department will be on-hand to answer any questions from aspiring entrepreneurs, including queries about capital, loan terms and profit management.

Organisers of The British Franchise Exhibition continue to concentrate their efforts on delivering the most in-depth and insightful show yet. In addition to the innovations being rolled out, the exhibition is still the only franchise event in the North endorsed by the bfa. This means all companies exhibiting have met the Association’s code of ethical franchising.

“The support we have from the bfa is something we pride the show on because it means the quality of the exhibition and the business ventures presented are guaranteed for visitors,”

“By visiting The British Franchise Exhibition, aspiring business owners can get all the information they need to help them to decide whether franchising is right for them and, if it is, what franchise best suits their career goals. They can’t miss this opportunity,” said Adrian Goodsell.

MORE:

The British Franchise Exhibition

Friday 11 June 2010: 10am – 5pm

Saturday 12 June 2010: 10am – 4pm

Venue: Manchester Central, Manchester

Register to visit: Call +44 (0)844 257 8668 or visit www.franchiseinfo.co.uk

Visitor tickets: £8 each or £7 each for two or more in advance, or £10 on the door

FREE entry is available to Civvy Street readers if they quote the unique code CIVVYS when they register at www.franchiseinfo.co.uk

Future Events:

The National Franchise Exhibition, NEC, Birmingham, UK, 1-2 October 2010

The Scottish Franchise Exhibition, SECC, Glasgow, 25-26 February 2011