Franchise Development – an incredible opportunity

Franchising is now recognised as the single most successful business expansion concept in history. It is probably the best leverage growth system ever created and is fast becoming the primary method of doing business around the world. Some of the most successful businesses in history are franchised companies including Holiday Inns, Hilton Hotels, Hertz, Avis, McDonald’s and Subway. There are also many British companies which franchise internationally such as The Body Shop, Mothercare, Laura Ashley and other fashion retail brands that have become world famous.

It is hard to believe that you can take a simple small business, teach others to replicate that business concept and the company could become a multi-million or even a multi-billion pound franchise business as exemplified with the recent sale of Burger King.

Almost any successful business could become a large and valuable franchise company. As evidenced by the leading franchise companies today, you do not have to have the best products or services, you simply require a business that can be replicated by willing investors.

You need to have a proven business model that works and can be taught to others in a reasonable amount of time, along with the necessary investment capital and sound advice from experienced experts.

FDS provides the consultancy advice, guidance, franchise development business plan and, if required, introduction to investment capital and expertise. The franchisor provides the brand, successful business model, leadership and continually reviews the franchise products and services on offer.

The Two Basic Types of Franchising

Conversion franchising
Conversion franchising consists of converting independent businesses already in operation into franchises. Conversion franchising offers such businesses the ability to increase their sales through name recognition, management methods and national advertising. The strength of conversion franchising is that new franchise owners are experienced in operating the business. Conversion franchising is common with estate agency franchises, mobile phone shops and hotels.

Business format franchising
In business format franchising, the franchisor licenses the franchise owner to sell certain products and services and to use the franchisor’s trademark and trade name.

Business format franchising offers the franchise owner business ownership while operating under the franchisor’s organisation. The franchisor teaches the franchise owner the entire business operation including marketing, management, selling, inventory, accounting and personnel procedures.

The franchisor also provides the franchise owner with ongoing support and training. Business format franchising is the fastest growing form of franchising, this includes retail businesses and many service businesses are now converting to business format franchises. Today there are over 1,500 companies offering a business format franchise in the UK.

Roy Seaman
Professor Roy Seaman, CFE, Managing Director and Co-founder of Franchise Development Services Ltd