Phoenix from the Flames. How franchising is prospering in the economic downturn

CeX Director Hugh Man:

HUGH SAYS: The credit crunch is forcing consumers to think more carefully about their finances and value for money has become increasingly important. More consumers are willing to buy second-hand goods as well as seeking ways of turning unwanted items into cash. Equally, a prospective franchisee can see that CeX has a business model that can thrive in these hard times.

Although the Banks have tightened their belts, they still have funds available but need to be more prudent in their selection. We have a major high street bank who have first hand experience of managing many of our franchisee accounts, is well placed in the franchising sector and is very supportive. Within the next six months CeX intend to demonstrate this to other banks to get their confidence to extend their services to our ever growing list of prospects.

Dublcheck Founder & Chairman Carol Stewart Gill:

CAROL SAYS: So many people are panicking with words like 'Credit Crunch' and 'Recession', however Dublcheck franchisees are flying. Franchisee Stuart Weatherill joined Dublcheck just over a year ago on £24,600, he has now increased his turnover to £105,600. In February 2004 Graham Hey joined Dublcheck on a £48,000 turnover, he is now turning over £360,000 per annum. David Davies started on £24,600 and has now increased to £264,000 per year. In just two years Stuart and Patrica Barber have managed to double their turnover of £86,400 to £172,8000. Simon Lebone has increased his initial turnover from £48,000 to £154,210...to name but a few.

The reason for such impressive growth? Everywhere needs cleaning! Yes, some customers are finding it hard and reducing the frequency of their cleaning - but the opposite of that is new customers are joining Dublcheck every day. The secret is not to have all your eggs in one basket and this is a philosophy I have had since starting Dublcheck. There are lots of 'gimmicky' businesses but there is nothing quite like Commercial Cleaning - the build up of dirt never stops! Dublcheck franchisees earn substantial profits and we at Head Office ensure they get the contracts and also raise the invoices, leaving the franchisees free to deliver a quality service and obtain contracts themselves if they wish at their own pace.

Papa John's Director of Franchising Alan Mason:

ALAN SAYS: Tough times and an economic downturn, but franchising is becoming an increasingly attractive option for anyone looking to start their own business. The number of franchise start-ups is increasing ahead of the marketplace, despite latest figures suggesting up to half of new businesses fail within their first two years.

The British Franchise Association says franchising is a means of starting and running your own business with a "very high success rate". The number of franchise businesses usually rises in a faltering economy because many workers feel they no longer have control over their future, so starting up their own business represents the ideal opportunity to become their own boss.

Taking on a Papa John's store takes away the risk usually associated with starting your own business. Franchises are much more likely to survive, especially with the help and support that a franchisor such as Papa John's provides to its franchise owners. This covers all aspects from human resources, health and safety, public relations, marketing and product quality. It means that the franchise owner has a lot less to worry about, and can concentrate on developing their business and overall market share.

In 2008, Papa John's has received more and more enquiries from potential franchisees who are drawn towards a proven business format. The company looks set to exceed this year's target of 20 new store openings and there are already plans in place to exceed this number in 2009 and beyond in 2010. Papa John's is confident that new franchise store numbers will continue to grow, despite the hard economic climate, and are looking to open 100 new stores within the next three years across the UK.

MOLLY MAID UK CEO Pam Bader OBE:

PAM SAYS: Despite difficult trading conditions, the market for professional domestic cleaning continues to grow. The domestic cleaning company will be celebrating its 25th anniversary next year and is forecasting that the market will be worth over £3 billion come Christmas.

Even in a downturn house cleaning remains a necessity and the demand for professional help in maintaining the home is increasing - according to Yell.com online searches alone have increased by 14 per cent month on month. As the leading brand MOLLY MAID have been there to answer this demand which has resulted in an increase in sales of five per cent across the network. Just showing how, even in a credit squeeze, industry leaders will still find a way to prosper and MOLLY MAID is no exception.

I credit the continuing success of the business to a combination of the hard work from Franchise Owners and their staff, as well as a desire to provide exemplary customer care with the strength of the MOLLY MAID brand. We are finding that there are more households where both partners are at work to supplement the family income. They've no time to do the cleaning so they are turning to MOLLY MAID because it's a brand they know and trust.

Domino's Pizza Head of Franchise Development Andy Hirst:

ANDY SAYS: We are living in an extraordinary and volatile economic environment at the moment where, quite understandably, many people are shying away from the prospect of starting their own business. But the credit crunch need not put the brakes on those dreams of being your own boss. Rejections of mortgage and loan applications are at an all-time high as banks too look to tighten their belts. In such a climate, it's proven winners and solid business plans that are most likely to tempt the lenders. With a national brand and track record as a successful company, a Domino's Pizza franchise fits that criteria.

As well as being an attractive opportunity for banks, new franchisees also benefit from a range of management and franchise training - not least the experience of a support network of successful franchisees who have started their own businesses. The Domino's Franchise Development Programme combines practical training with modules on topics including finance, marketing and people management. Training continues throughout a franchisee's Domino's career with a series of business development programmes.

Even in the current climate, it's a fantastic time to become a Domino's franchisee. We're finding that banks remain keen to lend to potential franchisees as they see Domino's as a good investment. And with all the support that Domino's offers to new business owners, it's never been a better time to be your own boss.

Cash Generator Franchise Director Robin Page:

ROBIN SAYS: In today's economic climate most retailers are finding the trading market tough as consumers choose to tighten their belts. Bucking this trend is the UK's most successful buy, sell and loan store, Cash Generator, which is continuing to grow at exceptional speed.

As a result, the company, which operates both company-owned and franchise stores throughout the country, has witnessed a surge in quality applications from potential franchisees over the last 12 months and has opened 15 new stores throughout 2008. The prime reason behind this raft of high end applications is the economic downturn, which has forced many to reconsider their careers. As a multi income business, offering both retail and financial services, investing in a solid company such as Cash Generator has also proved to be a key factor to the increase in applications.

From those working in construction and the property industry to former publicans, the selection is vast, and with redundancy packages to assist with the investment in a Cash Generator franchise store, 2008 has been a buoyant year for the franchise division of the company. Business in franchising has really come into its own in 2008 and we are delighted with the high standard of applications we have received and continue to do so.

The economy is certainly encouraging people to apply for franchisee options and with our strong market position and continued growth we are attracting a large proportion of quality applications. After a fantastic year, we have set out ambitious plans for 2009. From expanding our portfolio of franchise stores year on year, with the aim of reaching out to entrepreneurs who want to invest in and manage multiple stores, to branching further south focusing on the vast M25 region.

Mortgageforce Development Manager Malcolm Tongue:

MALCOLM SAYS: Mortgageforce's unique structure could be the answer for existing and potential mortgage brokers looking for a way to survive the difficult economy. Traditional broker networks have fallen in size and number weekly, in the past year as a result of the current financial climate, yet Mortgageforce's unique franchising model is proving to be a successful alternative for brokers, as it combines the freedom of equity ownership with central marketing and customer flows which would normally only be expected through a traditional employed route.

The franchised model allows us to offer brokers the technical experience and marketing of a great brand and a consumer awareness we're very proud of. Our national presence and reputation continues to facilitate new sources of customer referrals we need to service. Given that consumer activity in the market has slowed in overall terms, this clearly means that we are winning considerably more market share. In this climate, access to highly convertible new business opportunities for brokers makes the difference to who flourishes and who folds. Mortgageforce has recently appointed Kevin Duffy and Katie Tucker into its ranks for further support to franchisees. Kevin Duffy comes from a background of broker management and expansion, and as the Strategic Director for Mortgageforce, has been improving systems and training for franchisees, as well as recruitment and cultivating further relationships with new business sources. Katie Tucker is the Technical Manager, bringing with her a wealth of experience communicating vital mortgage market data to brokers, as well as a strong media presence that affords the brand a high consumer profile in national press, TV, radio and the internet.

Mortgageforce is bucking the trend of so many financial service companies currently, and expanding both through recruitment, and improving the services to its franchisees. A new customer management IT programme is about to be rolled out, easing the pressure from brokers in terms of compliance and paperwork. Mortgageforce enjoys the parental backing of a financial services group with over £9 billion of assets and 900 staff.

Auditel Managing Director Chris Allison:

CHRIS SAYS: Auditel is expecting to see a greater demand for its services due to the current economic climate. The home-based executive franchise specialises in helping organisations of every size achieve control over their business costs and its franchisees are earning six-figure annual salaries, with some exceeding £200,000 a year.

A tightening in the economy is tough for many, with impact varying industry by industry, but for us it offers a wealth of opportunity. Businesses waste billions of pounds every year overspending on their services procurement. With the credit crunch and world economic downturn, they are beginning to wake up to the fact that they can no longer afford this luxury."

We have recently overseen the recruitment and training of six new franchisees. Their wide range of backgrounds prove the growing attraction to our business format from many different professions and skills. For example, Adrian Kay ran his own Bournemouth estate agency for many years. He considered that the recruitment process was open and transparent and the head office team answered his questions readily and thoroughly. Adrian told me that at no time did he feel he was being 'sold' to, but merely invited to start a new chapter in his life. He also said that the training considerably exceeded his expectations. Entering a totally new profession is a daunting prospect, but he says he was given the tools to ensure that his career with Auditel got off to a flying start. I was delighted to hear his final thought when he said, "I am left in no doubt that this is the best commercial decision I have ever made".