With an increasing range of potential franchising opportunities in the golfing landscape, we asked the British Franchise Association to for ten quick need to know facts about franchising.
Franchising is big business, offering abundant opportunities to those dreaming of running their own company and reaping the rewards of their own hard work. So if you want the freedom of working for yourself but maybe don’t have the killer idea or confidence in your experience, here are ten reasons to consider franchising.
1) It is self-employment, with support
A franchisee owns and runs their own business, under the brand and systems of a larger company (the franchisor). It’s often described as being in business for yourself, but not by yourself – there is substantial training and ongoing support provided by the franchisor in return for royalties, usually based on turnover. The idea is simple: a franchisee pays for the right to license a successful, proven business model from the franchisor, who has already tried, tested and honed it into an efficient operation. Franchisees are supported to leverage and maximise that model in their local community, with the support and backing of a known brand (and other franchisees) to call on anytime. Franchisees are therefore also building an asset which they can sell when the time is right.
2) It’s bigger than you think
In 2015, franchising was worth over £15bn to the UK economy, generated from 45,000 businesses which collectively employ well over 600,000 people. The sector has grown by almost 50 per cent in the last decade alone, including throughout the recent downturn when the sector bucked wider trends by growing while the economy shrank.
3) It’s a safer way to start a business
For more than 20 years consecutively, annual independent research has shown around 90 per cent of franchisees reporting profitability, and less than five per cent of franchised businesses closing because of commercial failure.
4) No business experience? No problem
Support is available on all aspects of running a business, from the financials to the marketing, from operations to hiring staff. So if you’re more at home with putters than sales pitches or profit forecasts, but you’d love to work for yourself, then help is at hand. Franchising can be thought of as an ongoing business education in this regard.
5) The choice is enormous
Most people know McDonald’s and Subway are franchises, but there are a number of other big-name brands using the model, including O2, Clarks Shoes, Domino’s, Thorntons, Water Babies and Toni & Guy. But that’s just the tip of the iceberg. There are more than 900 brands using a franchise model in this country, and the chances are high that you used some of their services recently.
6) Do something you love
The initial and ongoing training and support on offer with any franchise worth investing in means you can go into business according to your passions, not necessarily your career experience. Transferrable skills are all-important – leadership, work ethic and people skills, for example, rate highly in what’s sought-after in a franchisee.
7) Lifestyle: the choice is yours
People invest in a franchise for many different reasons. It might be financial, to spend more time with their family, to escape the rat race, to work from home instead of commuting, to go into business with family or friends…or simply to spend more time on the course perhaps? Understanding your motivators is a vital step in determining the right franchise for you.
8) It’s suitable for all demographics
Young or old, male or female, any religion or race, all are thriving in franchising. While the average age of starting franchisees is in their 40s, one-fifth in the last two years were started by under-30s; women enjoy a far higher rate of business ownership than SMEs generally in this country; and older people are valued for their experience, calm head and ability to handle people and situation. The only thing franchisors want to know is whether a person will make a good franchisee.
9) There’s a system to follow
People who want complete autonomy over every business decision aren’t well-suited to franchising. The sector revolves around systems, which need to be followed – the legal contract (franchise agreement) and operations manuals help achieve this by setting out the rights and obligations of both franchisee and franchisor. Franchisees are encouraged to share initiatives but there’s a system in place for a reason: it’s tried and tested.
10) Look before you leap
If you’re considering starting a franchise then caution, research and due diligence are your watchwords: don’t fall in love with something and sign a contract without exploring it thoroughly, including the people behind the business. A well-researched franchisee is likely to be a more successful one, and a comprehensive understanding of the franchise and its culture is essential. Any good franchisor understands the last thing you should do is rush – if you feel pressured, don’t be afraid to walk away.
The British Franchise Association provides objective guidance on starting and running a franchise. See www.thebfa.org for information, or email email@example.com with any questions.