Take the Fear out of Redundancy

The high profile implosion of Rover in April brought redundancy right back onto the national agenda. If redundancy is hanging like the Sword of Damocles, it could be time to consider investing in your own future with a franchise, suggests Stuart Anderson

Flagging output and demand are causing uncertainty about the future of the UK economy, with redundancy a continued fear for both executive and blue collar levels. However, redundancy could provide the spur you need to take a new direction in you life by investing in a franchise.

Every edition of The Franchise Magazine brings more tales of individuals bouncing back from redundancy by putting their cheque into their own franchise. Take Clive Marshall for example, for whom almost 20 years of service working for Littlewoods ended in redundancy. 'I was a casualty of the changes taking place at the company and found myself with six months' notice to find myself another form of employment,' he relates. 'I got close to a couple of jobs, but they were going to younger applicants.'

Investing in a TaxAssist Direct franchise in April 2000, Clive launched a shop-front office last November and expects to achieve a £90,000 turnover this year.

By investing in a franchise, Clive has avoided much of the risk involved in launching a new business. In fact the British Franchise Association/NatWest 2005 UK Franchise Survey reports that 'levels of forced change in the ownership of franchise units are at the lowest ever recorded in the 21-year history of the survey, at just 1.7 per cent.'

Taking redundancy from his IT job after 17 years in July 2003, Steven McCracken decided to minimise the risk involved in starting a new venture by investing in a franchise. 'I didn't want to be one of the thousands of businesses which barely survive the first three months,' he reflects. 'I knew that the franchises I was looking at could give me the support that I needed. The same week I returned from Spear Business Group's franchisee training, I sold my first website for around £2,000.'

Franchises offer a risk-averse route into business ownership because of a number of factors:

• The business offers a product or service with proven demand
• The franchise is based on a business with a proven track record of profitability
• The business is nationally branded
• The concept has been constructed with professional systems and procedures
• The franchise can be set up with realistic financial forecasts based on past peformance
• The franchisee is supported by experienced management staff
• The franchise is co-opted into buying power greater than on its own

By accessing a proven business system, franchisees are given a head start, utilising the lessons learned by the franchisor and more established franchisees to avoid the pitfalls and select the best strategies to establishing their business. This head start will often see the marketing efforts of a franchise reach its consumer audience sooner, achieve customer satisfaction more quickly and receive income streams much earlier than a new business start-up feeling its way into the market.

'I have the best part of 30 years' experience in various big corporate businesses and, being used to a regular income, I was not looking to start from scratch but rather to purchase a business that would provide me with an income quite quickly,' reports David Henderson, who used his redundancy to set himself on the path to achieving his ambition to build a business for himself. David invested in a Jani-King franchise in March and is aiming to hit £12,000 turnover by the end of year one, with ambitions to reach £500,000 and then £1 million annual targets as the business grows.

A franchise licence provides exclusive access to the brand, systems and training of a franchisor in a protected territory for the lifetime of your agreement, all secured through the investment of an initial franchise fee and payment of an ongoing management service fee (typically a percentage of your turnover). In buying a franchise, you are investing in a business blueprint proven and finetuned through a pilot operation and, with established brands, through the early experiences of the franchisee network.

Because of the commitment to training and supporting you from the franchisor, you will find that most do not require previous industry experience. Comprehensive training opens up the availability of a franchise opportunity to a much wider population of potential franchisees, enabling the franchisor to select the best candidates in terms of commitment, drive and enthusiasm rather than searching for relevant experience.

'I liked the idea of becoming my own boss, but had no business experience and didn't fancy employing lots of staff,' relates Snack-in-the-Box 'Option 2' franchisee Mark Yates. 'I was in a bit of a rut, sick of shift work and ready for a new challenge, so I felt relief at being made redundant. Franchising offered me a range of opportunities which suited.'

Mark signed up as a franchisee in December 2002 and was earning income within the first month of launching his business. He is currently averaging takings of £2,000 per week, and is working a four day week to spend more time with his young daughter - something he would have been unlikely to be able to do in employment.

This flexibility is often a prime motivator for people who desire to become their own boss. For another example, Leadership Management Institute franchisee Andrew Peirce originally took redundancy in order to remain in the South West with his young family. 'Because I was bringing up my children on my own, flexibility was the key to any venture I was looking at,' he reflects. 'Recognising that I wouldn't be able to put in the hours developing a business concept from scratch, I turned to franchising. I am now progressing at my own pace, mentored by the franchisor, and am aiming to build the business up to an annual turnover of around £50,000, while maintaining a balance between work and time spent with my family.'

Another form of flexibility is being enjoyed by Cleaning Doctor franchisee Peter Appleby. 'I'm really enjoying taking a hands-on role in the business,' he reveals, 'but the profitability of developing the commercial cleaning side of the business may tempt me into taking a management role, or I may employ a manager and job-share to retain a hands-on element. The beauty of the concept is it's totally flexible.'

Formerly a Sales Executive for a blue chip company, redundancy caused Peter Appleby to re-examine his goals. 'To be honest I'd been counting the days to retirement - I'd lost my spark,' he reflects. 'Cleaning Doctor have put that back.'

Franchising is an exciting and growing industry which the UK Franchise survey reports turns over £9.1 billion per year. It has identified 718 brands involved in franchising and 88 per cent of their franchisees are reporting profits. The rewards are there for the winning, so if redundancy is weighing heavily on your mind, consider how franchising could turn your life around.