White Collar Management Franchising

Gordon Patterson and Gary Rigby of FDS Southern provide a guide to an increasingly popular type of franchise model.

There are various types of franchise model applicable to replication of a proven system through a business format franchise structure. These include:

Job Franchise
Lower level of financial investment - typically a self-employed, one-man operation; vehicle-based service/installation/repair business in areas like cleaning, motorist services or home delivery.

Sales and Distribution Franchise
Lower to medium investment. Selling and/or distributing products or services in a territory. Potential to employ other personnel as the customer base grows.

Retail Franchise
A significant investment in commercial property, shop fit, equipment, stock and staff; usually a high yield business system such as high street fashion and gift store chains.

Management Franchise
The franchise owner manages other people who deliver the product or service to the end user. In some management franchises this is the situation from day one, while in others, the franchise owner launches the business as a 'hands-on' operator and develops it into a management type operation over time.

Investment Franchise
A substantial capital investment to capitalise on a high cost franchise system. The franchise owner retains overall strategic management while hiring others to manage the franchise outlet. Examples are the big hotels and restaurant franchises.

Due to the fact that many franchisors regard their businesses as having development potential, there is often an overlap of these categories in some franchises.

A significant development over recent years has been the number of franchisors offering white collar management franchise opportunities. There are an ever increasing number of prospects with experience and capital who are looking for the white collar management type opportunity.

Some franchise owners want to invest in a business system that will provide opportunity to grow and develop the revenue and profitability without there being a ceiling on potential for growth.

Many client brands that we have consulted for in years past launched their franchise originally as a 'man and van' type operation. Subsequently, these franchise offerings have often developed into white collar management systems. As a result, new franchise owners appointed have the aspiration to build businesses of a multi-vehicle type. A good example is MOLLY MAID.

We would recommend that where possible, a business considering franchising structures its franchise model so as to provide opportunity for professional management personal to invest in a system that allows them to become a true business builder.

Typically, this will involve employing people who deliver the product or service while the franchise owner can sit above the business with a focus on marketing and management. Established management franchise operations can then as a re-sale, often command very attractive yields relative to the initial investment. Planning the correct exit strategy should be a key part of the goal-plan.

Clients of FDS Southern, who are offering a truly white collar management opportunity and promoting their franchise offering in this edition of The Franchise Magazine include:
Molly Maid, Caremark, Dream Doors, London House, CargoCall, auditel, BCR Associates, Domino's Pizza, Northwood