Roy Seaman: 'Experts in franchising'
Celebrating 25 years of servicing the franchise industry, Founder and Managing Director of Franchise Development Services Roy Seaman answers some of the most frequently asked questions about the development of a franchise
How long does it take to franchise a business?
Ideally, we suggest a six month time frame, although some major brands we have worked with recently have fast tracked the programme over three months. The first year is the most important in a franchise scenario since there is a great deal to be learned by any franchisor.
We normally meet with franchisor clients on a regular monthly basis to ensure that everything they need to attend to has been addressed and fully understood.
Once the franchisee recruitment takes place then the franchisor has to deliver everything required to its new franchisees to ensure that they achieve the projected turnover and profits, since they become the foundation stones for future franchise development.
Once the frameworks for franchising are in place it is relatively straightforward to teach and train franchisees. Growing a national network with committed franchisees is often far more profitable for you as a franchisor as well as for the franchisees. Their alternative would be to look at going into business in the sector without the experience, branding, training and support that a franchisor can offer.
Franchising is, without doubt, one of the most cost effective ways of expanding any business that meets the basic criteria for successful franchising.
What is the main advantage of a franchisor engaging the services of franchise consultants?
Building a franchised company without professional advice and guidance is like building a 5-star hotel without the advice and guidance from an architect.
We have the ability to visualise the finished product and, through our 25 years of experience, know exactly what the franchisor needs to have in place before it offers its franchise opportunity to investors.
We then know the type of training that it would need in order to own and operate the business as a franchise to its full potential. We also provide advice and guidance to the franchisor as to how it is going to teach the franchisee how to run the very business that the franchisor is involved in. We ensure that the franchisor focuses on the key areas that need to be in place before moving to the next stage.
At one time in the UK it was relatively easy to recruit franchisees, and franchisors had huge challenges in training a great deal of people to own and operate their businesses. Today, recruiting franchisees is more challenging since there are now over 1,000 franchise brands in the UK market. We therefore bring in many additional resources in order to help the new emerging franchisor save time and money by shortlisting the most suitable candidates that we believe have the necessary skills, ability and finance to own, operate and develop a franchise to its full potential.
What does it cost to successfully franchise a business?
We recommend that clients have a monthly budget of between £3,750 to £5,000 per month for a period of six months in order to lay a very solid foundation.
They should also have a contingency budget of between £7,500 to £10,000 to strengthen any weaknesses that may be present in the existing business before moving into the franchise sector.
What are the main reasons why franchisors fail?
The most serious reason is a lack of knowledge. Many franchisors not taking professional advice and guidance believe that the most important activity is the recruitment of franchisees. They quickly discover that they have not only recruited the wrong type of people, but the package that they were offering to them was not well thought through and totally inappropriate.
Another reason is lack of funding. Even if a company were to do everything itself it is looking at between £30,000 to £50,000 to successfully franchise the business. Rather than create operational and training manuals, legal agreements, franchisee recruitment brochures, advertisements and editorial campaigns and 101 other things itself, it is far better to use the most appropriate professional adviser. They can often save a franchisor a great deal of money as well as underwrite the results that are expected.
Finally, successful franchising takes time. It is far better to recruit the first wave of franchisees and then get them up and running successfully before embarking on a continual franchisee recruitment campaign. We strongly recommend that a total UK Franchise Development Programme be spread over five years, although some clients not taking advice and guidance try to achieve this goal within 18 months to two years and are doomed to failure.
What is the best way to franchise a business?
There are probably three different ways in which a business can be franchised. We examine very carefully whether the ideal profile of a franchisee is of a single owner operator (often called a job franchisee), or whether there is an opportunity for the business to be run as a management franchise. If the business relates to retail, again we are looking at either a single-unit operator or a multi-unit operator.
Ideally, we should start with a single unit and build up to the multi-unit in the retail sector. An additional way to franchise a business is to look at appointing an Area Developer who basically clones the headquarters' operation in a pre-determined geographical area which can then be franchised off as a mini Master Region.
When did Franchise Development Services start?
The business was established in 1981 and founded with a 21-year business plan. We identified that there were seven areas that needed to be serviced in relation to established and prospective franchisors and franchisees. The first seven years were devoted to establishing a solid foundation and then we established a regional network of offices covering Southern England & the West Country, the Midlands & Wales, Northern England & Scotland. Our head office in Norwich looks after franchisors in the Anglia, London & SE Region. We service Ireland from Head Office and regional offices where we have significant connections back into the Irish market (Gordon Patterson of FDS Southern originates from Ireland).
What is the main activity of FDS?
We assist owners and CEOs of successful businesses to evaluate how they can best expand their business by franchising. There is a basic criteria that suggests that if a business is teachable to others, has good growth potential and sufficient profit margins, then there is probably a way to franchise that business. We then work with the client to think through a practical Franchise Development Business Plan which will outline the work involved, time scales and costs.