6 minute read
The Franchise Specialist
LEN RAINFORD
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FRANCHISING
Hi, my name’s Len Rainford, otherwise known as The Franchise Specialist. I have been involved in franchising for over 30 years and have experienced it from every angle and every aspect.
I have been a Franchise Manager for two international companies, worked as a Franchise Consultant for several major brands and have been both a Franchisee and a Franchisor. I have also started, ran, and sold four businesses, all in different sectors, the last of which I built into a national brand through franchising.
As an Entrepreneur in Residence at Lancaster University, I am involved in various projects and do talks on business, entrepreneurship and franchising.
My aim is to share my passion for franchising, pass on the knowledge and experience that I have gained over the years, to help companies to grow their business and achieve their goals through franchising, and also raise the profile of franchising in the UK.
WHAT IS FRANCHISING?
Franchising can be a complex business and mistakes can prove very costly, as I have seen all too often. As a result, I have developed various strategies covering every aspect of franchising, in particular the “Seven Step Strategy”, which if implemented fully will ensure results, a return on investment, success and happiness.
Despite the fact that in the UK there are now over 900 franchise brands covering 80 different sectors, and franchising accounts for over £17.2 billion of the UK’s economy, and most people come into direct contact with several franchises every day, there is still a huge lack of understanding about what franchising is and how it works. Understanding it clearly is essential for success, but it doesn’t have to be complicated.
There are various definitions of franchising by different organisations but putting it simply, a franchise can be defined as “Formal permission given by a company to someone who wants to sell its goods or services in a particular area.”
It is a relationship where one party – the franchisor – allows another party – the franchisee – to operate copies or clones of a proven business model in return for initial and ongoing fees. The franchisee will generally be given an exclusive area or territory for a defined period. In effect, the franchisor allows the franchisee to operate a branch of its business using the proven methods, processes, systems and brand.
Entrepreneurs who have developed a successful business often look at franchising as a way to expand. Like any business model, franchising has its benefits and drawbacks.
There’s no way to know for sure whether franchising is right for your company until you evaluate its pros and cons in the context of your operations. That usually requires the help of a franchise advisor or consultant, but before you start talking to the experts, you should get a sense of the key advantages and disadvantages of franchising a business. Franchising offers several major benefits to business owners seeking to expand their business.
• Lower Capital Investment • Motivated Partners
• Rapid Growth • Local Knowledge • Increased Brand Awareness
• Increased Revenue and Profits
• Minimized Growth Risk
• Increased Capital Value of the Business
In short franchising offers a “low risk”, high return on investment.
Disadvantages of franchising:
It is not all plain sailing. Although there are many positive reasons for franchising your business there can also be some disadvantages of the franchise business model:
• Up-front costs including consultancy fees and
recruitment costs
• Less control over franchisees than branch
managers
• Innovation challenges
Why consider buying a franchise instead of starting your own business?
Basically, it comes down to risk and belief. Buying into an existing and proven business model is an attractive proposition. You can see how it works and what it can deliver in terms of revenue and profits. With the exception of new franchises, you can talk to existing franchisees to get reassurance that it is indeed a good business opportunity. If your definition of success is becoming filthy rich, buying a franchise business could get you there…but it may not. Although franchise ownership can provide a proven business model with instant brand awareness, it doesn’t always result in wealth.
There is no guarantee of success in any business. What I am saying is that if you put in the effort and chose your franchise wisely, you stand a better chance of getting there. The franchising industry regularly likes to remind us that being a franchisee is a safe and potentially very profitable way of getting into business. This is true and the statistics speak for themselves but there are also downsides.
Advantages of buying a franchise:
• Proven system
• Your own operation: • The Franchise package • Ongoing help and support • Defined territory • Greater access to finance
• Less risk with a proven business model
Disadvantages of buying a franchise:
• Initial and on-going fees • You do things their way, not yours, which can be
restrictive
• Other people’s decisions could sink your franchise • Restrictions on expansion due to neighbouring
territories
• Hard work
You cannot escape hard work: If you take on a franchise under the impression that the franchisor will do all of the hard work for you while you sit back and watch the money roll in you will be in for a nasty shock. When considering buying a franchise ask yourself the following questions: • Do the advantages outweigh the disadvantages? • Is it worth taking the risk?
If you go through the advantages and disadvantages and consider which ones are the most important to you it will help you to decide if franchising is right for you.
FRANCHISING – THE KEYS TO SUCCESS
One of the keys to successful franchising is the relationship between the franchisee and the franchisor, which is why it is critical that you get the franchise agreements, manuals, processes and systems right from the start. It is well worth spending the time and effort in the early stages as this will pay dividends in the long term.
This gives the franchisee a head-start in setting up their business because the sales and administration processes are already in place and, in many cases, the brand will already be well known. The franchisee will be expected to operate the business in accordance
with those proven systems and not do anything to adversely affect the brand.
One of the key attributes of franchising is that the franchisee will continue to receive advice, training, and support from the franchisor throughout the term of the franchise, thus improving their chances of operating a successful business. Whilst no franchisor can ever guarantee that their franchisees will be successful, it is certainly true to say that they are likely to be more successful than if they had started a new business on their own.
Franchising is a term that some business owners regard with anticipation and excitement, and others with fear and trepidation. The truth is that franchising is one of the most significant, stable, and sustainable growth strategies that a business can implement.
I have written two books about franchising as there are two different audiences – people looking to buy a franchise and existing franchisees, and companies looking to franchise their business and existing franchisors who already have.
The Franchise Specialist is dedicated to helping you with any aspect of franchising. Whether you are looking to franchise your business or invest in a franchise, or you are an existing franchisor or franchisee needing help just give us a call for a FREE consultation.
“Whatever the problem we have a solution.”
Call for your Free consultation now on 01925 224000 or 07795 960320 or email len@thefranchisespecialist.co.uk
