The time is right to franchise your business
As we enter a period of recession, the franchise industry is expected to experience substantial growth as those made redundant look to secure their financial future by investing in a franchise. Capitalise on the demand by franchising your business
In the current economic climate, many business owners will be evaluating ways they can reduce their operational costs in order to continue trading profitably. This may mean that for some, their expansion plans will have to be put on hold. One way successful business owners can continue to operate profitably and expand is to franchise their product or service.
Franchising can be traced back to the mid 19th century and involves a successful business owner or 'franchisor' selling the rights to their brand name, trademark, business model and product to another individual, a 'franchisee', in order to replicate the existing business's success in another part of the country or world.
This enables the franchisor's business to expand without putting any extra strain on the cash flow, providing there is an adequate training facility and support structure in place to help the franchisee 'learn the ropes' of the business. By replicating the business model it ensures the brand's quality and product remain consistent.
With the number of people being made redundant increasing, more of the UK population are likely to consider self-employment as a way to safeguard their futures. By franchising your business, you will be able to capitalise on this growing demand by being able to offer prospective franchisees that possess a drive or desire for independence, a lower risk alternative to starting up a business by themselves.
According to the British Franchise Association (bfa) and NatWest 2008 UK'Franchise Survey there are 34,200 franchise units operating in the UK. Over the last 10 years, the franchise industry has experienced rapid growth and its contribution to the economy has risen from £7 billion to £12.4 billion.
Franchising has been adopted by a wide variety of industries and businesses, well known companies including cleaning brands Safeclean, and MOLLY MAID, fast food brands McDonald's, KFC and Pizza Express or retailers Apollo Blinds and Cash Generator.
The benefits of franchising your business include being able to:
- Penetrate the market with minimal risk and capital.
- Reduce the need and difficulties of recruiting, training, compensating and retaining a large competent staff to operate company-owned outlets.
- Realise cost savings through bulk purchasing power and mass distribution as the franchise system expands.
- Generate more funds for better and increased national and local advertising.
- Obtain a source of capital through the management services fee structure in addition to traditional financing avenues.
- Realise the advantages arising from the built - in self-motivation provided by the franchisees and the stimulation to present employees.
- Own a growth vehicle that becomes 'self-financing' when a relatively few franchises are established.
The first step to franchising your business is to seek advice from franchise consultants in order to ensure your business model can be franchised successfully and this is where Franchise Development Services can help you. With almost 30 years of experience and a highly qualified and experienced team of specialists in training, operations, development, marketing, advertising and promotion FDS has the experience and resources to help you develop a successful Franchise Programme for your business and save time and money in the process.
Written by Professor Roy Seaman CFE