Thoughts on progress in franchising
FDS consultant Nick Williams looks back to the turn of the century and his role of helping people better understand their opportunity as franchisor or franchise owners. With some major advances having been achieved, it seems timely to reflect on those years as The Franchise Magazine turns 30.
Knowledge and Awareness The word ‘franchise’ is now much better known and understood. We used to attend exhibitions, especially the nonspecific franchise type such as the Business Startup and first have to explain what the word “franchise” meant! Only then could you help people to consider the choice of brands in the market. The expansion of internet based information and its accessibility, and the increased number of brands trading as franchisors on the high street and providing services, has enabled people to research far more freely, so that they ask better questions.
Potential franchisors can research far more and in fact start-up businesses now model themselves on franchised operations from the outset paying great attention to systems and preparing to develop as a network. Franchising is an excellent model for any new business as was particularly outlined in “The E-Myth Re-visited” by Michael Gerber.
Communication There was a time when anybody applying for a franchise would have to go to an exhibition, buy The Franchise Magazine or read a supplement in one of the daily newspapers. Once they identified possible brands of interest they would then have to post an interest request to the brand, or telephone them (no email then!). It all took longer, compared to the email driven world of today.
This is a double-edged sword as more wasteful enquiries have been made than ever before because of the simplicity of applying, which is very frustrating for franchisors whose time is wasted, yet positive news for all in our ‘must have it now’ world, because information can pass quickly and genuine interest can be rapidly developed.
Financial In the halcyon days of the turn of the century prospective franchise owners had much easier access to money, sometimes because of generous redundancy payments in the days when those were still significant, through equity release in rising property markets, or through a relaxed bank lending regime.
Professional Potential franchise owners know much more, so they can ask better questions, delve deeper, compare the market more. They have access to specialist providers of experience knowledge.
Franchisors themselves can learn from the brands of the past to provide better franchise systems, with experienced franchise consultants to guide them.
Legal While franchising remains unregulated within the UK, there is now a raft of case law and associated or general trading and competition legislation that franchisors must take heed of, resulting in a proliferation of successful specialist franchise lawyers.
Amazingly though, people still invest in a franchise in which they are investing their future finances optimism and emotion, without spending a small amount on getting unbiased clear explanations of the commitments that they are taking on, by talking to one of these lawyers. Unbelievable!
Powerful The market is maturing. Brands like TaxAssist in the professional services sector, Domino’s Pizza and McDonald’s in the food sector, CeX in retail, Northwood Lettings and Martin & Co in the property world, ChipsAway and Revive in automotive, Bluebird and Caremark in domiciliary care, to name just a few, have built strong networks, evidencing the power of franchising to build a real sustainable business. Multi unit franchise operators are building real wealth for themselves and overall the message is positive.
In Summary Half a lifetime later the reader of The Franchise Magazine today can participate in a mature thriving business sector. Franchising has come a long way and is now a mainstream element of the UK business market. We at FDS are proud to have played our part and look forward to the next 30 years with optimism!