Manage your future with a franchise

As redundancies start affecting people with white-collar backgrounds, the demand for management franchises has never been higher.

Of all the franchise opportunities available, the management sector probably has the widest variety, as it contains everything from home improvement and domestic cleaning opportunities to freight forwarding and commercial investigations.

What they all have in common is that the franchise owner doesn’t have to do the actual work themselves, whether it is carrying out installations or meeting clients on site. Instead, owners of management franchises oversee a team by using skills they have acquired from a previous office-based or an executive position.

Gary Clere, who founded freight forwarding franchise Cargocall says: “Management franchises obviously don’t suit everyone. If you are looking for a ‘hobby’ franchise or a part-time franchise, then management franchises wouldn’t normally suit you.

“However, if you are looking for a full-time franchise with higher earning potential, management franchises will tend to offer this. Overheads on such franchises are often less too. For instance at Cargocall the only direct overheads are the cost of running a small office with the associated IT and telecoms equipment.”

As with all franchise opportunities, no matter what the sector, there are a number of priorities to consider before you make your investment, explains Andy Goodson, founder of lettings and estate agency franchise Northwood.

“You need to see if the franchise sets itself apart from the competition, how long it has been established and if the early franchise owners have renewed their franchise,” he adds. “You should also look at the professionalism of the people running the franchise and the strength of the brand.”

Gary Clere echoed Andy’s views about longevity of the franchise: “At Cargocall we have successfully and profitably operated the business model for over 14 years. Our directors remain involved with actual franchise operations and the support package we offer is second to none.”

Jo Minkler, Managing Director of driving school franchise, 5Day, also has some useful pointers for those researching management franchises.

“A prospective franchise owner should look to see if the franchise has an easily replicated model, good training, support and advice backup,” she says. “Our franchise has the added bonuses of not being area specific, a continuously growing market worldwide and low staffing costs. It is an ideal management franchise as the core work is literally managing customers and instructors on a daily basis.”

Although, management franchises may sound like they require large initial investments to cover staff wages and premises, this doesn’t always have to be the case.

Bill Owen, Franchise Manager at cost management consultancy opportunity, Expense Reduction Analysts, explains: “You don’t always need a large investment. However, when you have to grow a business from scratch like our consultancy service, it is crucial that the business is not under funded. A strategic business plan is necessary to demonstrate where you should be at a particular point in time along with the correct amount of working capital.”

Jo Minkler continues: “Franchise fees vary throughout different industries, let alone different sectors. Therefore, the fees charged are relevant to the individual package and the support/training supplied.” Andy Goodson states that the expense of a separate office is not necessary to run a successful business, adding: “Some management franchises can be run from home but a general rule is that the bigger the investment then the possible greater returns.”

Dream Doors is an example of a management franchise that does require a larger investment, says its Managing Director Troy Tappenden.

“Our franchise owners need to invest in a showroom, marketing, vehicle leases and staff wages and, as such, the total start up costs are between £70,000 and £80,000,” he adds

An important part of any franchise package will be the training, which is a vital component in the success of franchise owners, especially if they have no prior experience in the field.

“Although prior white-collar experience may be an advantage, in reality, the most important characteristics found in the most successful management franchise owners are hard work, resilience and good people skills, explains Bill Owen. “If you have them you can be taught to do anything and be successful.”

Jo Minkler agrees: “With the 5Day franchise it is not essential to have had previous experience in the driving industry/tuition sectors. As our franchise owners’ core teams are Government trained instructors, any person with skills in managing personnel can run a franchise, as you are not giving the tuition; your job is managing pupils, their expectations and organising your instructors.” One of the greatest advantages of a management franchise that there are less restrictive limits to how large a franchise owner can grow their business.

Gary Clere says: “I think it is fair to say all franchises have a limit to the size they can grow if such franchises are territory or location based. Obviously there is the opportunity to buy other territories but the very definition of franchising means you are buying a share of a market offered by the franchisors brand.

“The key question for those looking to buy a management franchise is: ‘How big will the territory/market share be?’ At Cargocall we’re not looking to recruit hundreds of franchise owners – we’re looking for a select few who can operate relatively large regional territories with a view to achieving turnover in excess of £1 million per annum. Our largest franchise owner territory incorporates five entire postcode areas.

Andy Goodson also states that limits such as an adjacent franchise territory being already sold, should not have a major impact on franchise owners wishing to expand their business.

“People are normally limited by the distance the franchise is away from their home – most people not only invest in Northwood for money but also to improve the quality of their working life. A franchise owner in a rural area may have an enormous geographical territory, while a franchise owner in a large city may have a relatively small area but hopefully the opportunity to build a successful business will be the same.”

Troy Tappenden states that business growth usually depends on the franchise model. “In Dream Doors case, our areas are exclusive and based on postcode areas with a population of between 300,000 and 500,000 and a good percentage of those that fit the demographic of our typical customer. In fact, our most successful franchise owner has a territory of just 280,000 people, and we have some with double that who turnover just half of what they do. That is down to the people, and their work ethic!”

Written by Fraser McKay