Charting a Course for Success How an Expert Consultant is vital to franchising your business

After almost three decades of providing franchise consultancy to the great and the good of UK franchising, Franchise Development Services sees more potential for growth in the sector than ever

Having worked with more than 500 franchisors in the UK, Franchise Development Services (FDS) has built an unrivalled level of expertise in advising and guiding the conception and implementation of franchising. This huge amount of interaction with such a wide range of franchising companies, either from consulting at the conception of the franchise development programme, being brought in at a later date to realign the direction of the company's franchising efforts, or through the use of its range of print and online marketing tools (including The Franchise Magazine), empowers FDS with the ability to compare and contrast the strategies of success that have been pursued by the biggest names in franchising today.

Established in 1981 by Managing and Financial Directors Roy and Judy Seaman, FDS has developed a well-honed and proven set of methodologies to enable a business to accurately analyse its suitability to franchise and implement professional and ethical franchise development. 'A good Franchise Consultant is an essential member of a successful franchise operation,' says Roy, who last year became the first person in Europe to be awarded Certified Franchise Executive status by the International Franchise Association. 'A consultant's services are much like those provided by the navigator onboard a passenger aircraft - the pilot needs continual guidance to stay on course and reach their destination. In fact, good Franchise Consultants eventually become co-pilots and work continuously alongside the captain to ensure that they fully understand all the options available.'

WHY YOU SHOULD CONSIDER FRANCHISING YOUR BUSINESS

The first stage of consultancy FDS provides is an Evaluation Analysis, which aims to review the business's suitability for franchising and make a recommendation on how the Franchise Development Programme should best proceed. For those businesses that do meet the requirements to become a franchise with the potential for success, the attraction is the ability to expand quickly (capturing national market share), cheaply (funded by the franchise investment fees) and effectively (managed by franchise owners with real incentives to maximise profitability).

'Franchising often allows successful businesses to expand in the most simple and cost-effective way possible,' reflects Ken Young, who is the Regional Director of the FDS Midlands office. 'With franchising, each additional territory is managed by a highly motivated business partner whose standards and objectives will be identical to your own. Using this method of expansion, complex and expensive administrative systems become unnecessary.

'Franchising can be an excellent way of retaining that unique family feel in a business as it grows bigger and expands its services nationwide. Also, because franchisees effectively share the investment cost, franchisors will usually be able to expand more quickly than most conventional businesses.'

DETERMINING YOUR BUSINESS'S SUITABILITY FOR FRANCHISING

Not all businesses meet the criteria for a franchiseable business and over the decades FDS has helped many companies save substantial capital by pointing out why franchise development would ultimately fail, as well as the hundreds of companies it has helped succeed. The FDS Evaluation Analysis service is the recommended entry route into the process of deciding on the direction of a franchising programme, with FDS consultants distilling their experience and expertise into a structured investigation into a company's suitability and a set of professional recommendations as to the correct franchising method to adopt to maximise results.

'The importance of first carrying out a careful analysis and assessment of the business potential for franchising and of the franchise opportunity should not be underestimated,' says FDS London & South East Franchise Consultant Nick Williams. 'Understanding franchising in all its various facets is essential before committing resources to the full development phase. Taking professional advice initially can save a considerable amount of heartache, pain and money through the various stages of franchise development. To use an analogy, good foundational planning is essential to any building - get this wrong and ultimately a price will be paid. Likewise with franchising, having an independent third party advisor who has many years of experience can bring great benefits to any individual or company considering franchising.'

Nick reflects that the rapid network expansion that can be achieved through franchising, as opposed to managed organic growth, means that 'it is essential that the necessary franchising elements are in place from the start and, more importantly, for the future'. He identifies a number of criteria which are essential for the expansion of any business through franchising:

  • The business should have a tried and tested
  • system which can be clearly documented.
  • The product or service offered should be required on either a national or international basis.
  • The product or service should have longevity and staying power within the marketplace.
  • The management team should have a professional approach with a truly win-win ethos.
  • There should be credibility with the clients or customers of the service.
  • There should be good historical trading history as franchisees will initially depend on the credibility of the franchisor when they start trading.
  • There should be a strong brand, although when considering franchising this is an ideal time to review and improve the branding in line for a national or international presence.
  • There must be enough profit in the business for both the franchisor and franchisees. This aspect is often the root of all causes of complaint levied against the franchisor, so careful consideration of the various financial models is paramount.

FRANCHISING YOUR BUSINESS

FDS has identified 21 areas of a business which need to be examined and properly structured in order to properly prepare it for professional and ethical franchising. 'Based on many years of working within franchising helping franchisors and potential franchisors to franchise their businesses, FDS provides a proven and effective system for guiding clients through a development programme based on three key phases,' reveals FDS Southern Regional Director Gordon Patterson. 'The first phase is the Evaluation Analysis - only if we are satisfied in principle that the business concept is sound and franchiseable will we implement a Franchise Development Programme.

'In this vital implementation phase, we work with specialist franchise solicitors, trademark attorneys, accountants, PR practitioners, franchise advertising and editorial personnel, corporate design experts and other professionals to ensure the creation of an attractive and professional franchise offering. Our in-depth industry experience helps clients to avoid the common mistakes at every stage and move on steadily to enjoy the benefits of franchise development success.'

Gordon lists FDS objectives as to ensure the franchisor is equipped with:

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  • A credible and professional corporate image and intellectual property rights protection.
  • A clear franchise information memorandum and inviting franchise prospectus including financial statements and identifying the franchise package and support services provided.
  • A legal agreement fair to both parties but leaving the franchisor in control, with a fixed initial and ongoing fee structure and defined territories.
  • Franchisee training programmes and franchise manuals covering the entire business methodology.
  • Strategy and procedure for handling franchisee recruitment.
  • RECRUITING FRANCHISEES

    Once the franchise package is in place, the real business of building a franchise network can begin. It is at this point that the right strategy is paramount to ensure the business gets off on the right footing, as FDS Northern Regional Director Tony Urwin warns: 'Franchisors must understand the importance of a well managed recruitment programme. Done right, it lays the foundation of a high quality, well motivated franchise network. Done wrong, it can sow the seeds of a franchisor's undoing.

    'Frankly, the recruitment of suitable franchisees is one of the most time-consuming aspects of any Franchise Development Programme. A targeted marketing campaign must be developed and implemented and the results measured. Once the phones start ringing and the inbox starts filling, each and every lead must be systematically (and promptly) followed up. The franchisor should take the details and answer the questions of every enquirer and, subject to passing the initial screening, send them documentation, usually a prospectus. Returned application forms should be processed, and subsequent interviews scheduled and conducted. The marketing efforts, screening process, relationship management and data collection involved can very well exhaust even the most committed franchisor.'

    FDS has been publishing franchise-targeted publications and directories for over 20 years and has been at the forefront of online recruitment with www.theukfranchisedirectory.net. As the interest in franchising has increased nationally FDS has used its own experience and expertise to successfully launch its lead generation and management service FranMatch. Now offered through all FDS offices, FranMatch enables a franchisor to outsource its franchisee recruitment operations up to the point of the face-to-face meeting with pre-screened quality applicants.

    'Our professional full-service franchise recruitment programme is available to facilitate the entire process,' says Tony. 'Franchise Development Services employs its extensive resources to develop targeted marketing, generate and manage leads, pre-qualify candidates and track the franchisor's success. The service keeps a lid on costs as it maximises the chance of recruitment success.'

    SELECTING YOUR FRANCHISE CONSULTANT

    The British Franchise Association (bfa) awards Affiliation status only to recommended franchise consultants who can demonstrate a comprehensively professional approach to advising their clients. FDS as a group boasts six bfa-affiliated consultants, aided by a strong team of experienced support staff including a number of franchise recruitment specialists operating under the banner of its FranMatch service.

    With exclusive access to a range of market leading promotional tools, such as The Franchise Magazine, www.theukfranchisedirectory.net and an emailable database of over 20,000 registered franchisee prospects, FDS has developed a national and international reputation for facilitating successful franchise expansion both nationally and, through the granting of National Master Franchises, worldwide through its associate offices across Europe and the Middle East.

    CASE'STUDY

    Gareth Lippiatt, Managing Director, Sports Xtra Ltd

    'The decision to franchise my business was not an easy one! I knew that I had developed a successful concept and business model that could be replicated across the UK, but developing a much larger network seemed a daunting and complex process. My research into franchising Sports Xtra lead me to assess several franchise consultants offering various packages and associated costs. However, of all the companies that I spoke to, by far the most impressive and knowledgable for me were FDS.

    'Franchising can be a potential minefield and using the right consultants is absolutely imperative. Having developed Sports Xtra from a start-up six years ago, I've made countless regrettable decisions along the way! Choosing to work with FDS in developing my franchise was definitely one of my better ones. Not only did they consult with me on all the various systems that I needed to put into place, but each of the contacts they put me in touch to assist with my franchise development turned out to be a real find.

    'However perhaps the most surprising but valuable aspect of their work was making me look at my own business in a totally different way. We considered systems that could be improved, new products that could be introduced and fresh ways to get the most out of staff. Paul Hague from FDS has not only helped me develop a franchise package that I am extremely proud of, he has even been the catalyst in improving my existing business too!'