Is there any advantage to being the first franchisee and paving the way for the rest of the network?
Whether it’s introducing a global franchise to the UK or partnering with an entrepreneur to franchise an existing British business, it takes a brave soul to be a company's first franchisee. And the country has seen plenty of those this year: international franchises like US burger specialists The Counter and iconic Canadian cafe brand Tim Hortons have all recently appointed their first UK franchisees. But since the sector's main draw is often said to be the fact that it provides a tried and tested formula, what’s the appeal of agreeing to be the very first franchisee in a new, untested market?
Most people who are the first to come on board tend to have an entrepreneurial streak in them, which explains why they wouldn't rather wait for someone else to have a go. This means they need to be comfortable with a certain level of risk and tend to enjoy growing something that’s still in its very early stages. For Peter Gale, teaming up with his wife Susan to become artificial-lawn company Great Grass’s first ever franchisee was a risk worth taking. Despite a setback earlier on in his franchising journey, like many entrepreneurs he wasn't deterred and instead embraced the chance to pilot a fresh concept. “I’d actually been burned by a previous franchising experience and had very nearly sworn off the sector entirely but when the right opportunity came about, I got excited about having the chance to start something new,” he says. And Michael Ziff, who became the first UK master franchisee of US-based business brokerage company Transworld Business Advisors in February 2016, puts it even more strongly. “Some call us pioneers, others call us lunatics,” he says. “But I knew I didn’t just want to be a franchisee with the comfort of being a follower: I wanted to be a master franchisee.”
That’s not to say pioneering franchisees have a tendency to rush into things: if anything they tend to do even more due diligence. Gale admits he took his time to get to know the franchise and study its competitors to judge if there really was a franchise opportunity. “You won't lose out if you wait a few months," he says. And by the time Ziff finally signed the paperwork, he’d spent a full year studying every aspect of the deal, especially when it came the legal fine print. “You should never rush the due diligence process or scrimp on getting expert advice from people like solicitors,” he says. “As with any business there will be risks, so you have to take a long hard look at the strengths, weaknesses, opportunities and threats before making a decision.”
And while it might seem less risky to be the first franchisee who slots into an existing international network than being the guinea pig for a business that wants to try the franchise model, the same level of scrutiny should be applied. Just because a company’s franchisees have a strong track record in overseas territories, there’s no guarantee that success will translate in the UK. “The fact that Transworld Business Advisors had a 35-year heritage in the US was a point in its favour,” says Ziff. “But I also made sure there was a UK market for it too and that it was a model that would be relatively recession-proof here.” He also advises would-be franchisees to make sure they get a British version of the franchise agreement, even if it means pushing the franchisor to create one.
Alex Scotchbrook, who became the first UK franchisee for Tutor Doctor, the home-tutoring franchise, in 2009, similarly found herself being a bit more assertive than her usual self when it came to doing her own independent research and grilling the franchisor for more details. “I wasn't afraid of banging down doors to make sure I was getting the information I needed to be able to trust the franchise,” she says. “It was my entire life savings on the line, after all.”
Having just been made redundant, Scotchbrook understandably wanted to know she was making the right move. So when she had a few questions about the operations manual she’d been given, she didn’t stop until she'd spoken to the right people in the company’s operations team and had her questions answered to her satisfaction. “People used to call me a people-pleaser but they don’t anymore,” she says. For anyone considering becoming a company's first franchisee, not being afraid to push the franchisor for more detail – or a better deal – is crucial. There are no other franchisees to speak to and the first few who sign up will likely have to put in a bit more effort, so it’s important that the agreement reflects this.
One of the more challenging aspects of being a pioneering franchisee is that, once on board, they don't have the luxury of being handed processes and guidelines that have been fine-tuned over decades. “You can’t go into it thinking you've bought a box full of money and you just need to turn the handle to make it work,” says Scotchbrook. This can be daunting for some but, on the plus side, you do get to co-create these systems with the franchisor and play a part in informing the franchise's strategy. And this was a big part of the appeal for Scotchbrook. “I don’t mind trying different things and figuring out what works in the market: in fact, I find it more exciting,” she says. “I’m not a complete innovator but I do see myself as an early adopter.”
However, while things are in the development stage, pioneering franchisees can be prone to feeling the pressure to perform. “It felt like everyone in the head office was watching me: they knew that if I flunked nobody else would want to buy another franchise in the UK,” Scotchbrook recalls. “I was the only person who could validate the concept in this market.” That being said, the onus isn't on the first franchisee alone: getting things off the ground should be a joint effort between them and their franchisor. “You need to have the right chemistry with the franchisor and you want someone who’s not just going to give you direction but someone who will listen too,” says Scotchbrook. “There’s always been a sense that we were in it together.”
Lacking a clear, signposted path isn’t for everyone, of course, and anyone considering becoming a brand’s first franchisee should consider what their expectations are. But the draws are undeniable too. “Although I’m just at the start of my franchising journey, I'm looking forward to having more people join me and helping them get their businesses of the ground,” concludes Gale. “It would be an honour.”