Britain’s franchising sector is going from strength to strength. But while many are thinking about joining the club, it might not be for everyone
Mark Scott, director of franchise development at NatWest
Over the weekend, franchisors, businesses and budding franchisees alike flocked to The Franchise Show: an annual celebration of the industry’s best and brightest. And it’s no wonder that there’s such massive interest in franchising: the sector has grown by 46% over the past decade according to the bfa. But even though franchising is on the up, exhibitors at the show were adamant that budding franchisees should ensure they’re the right fit for the industry.
For starters, franchisees need to be able to handle the financial side of things and be prepared to put their own savings into their venture. This is because many banks want to see potential franchisees invest some of their own money before offering a loan. “You have to have something to lose,” said Mark Scott, director of franchise development at NatWest and one of the seminar speakers at the event. “We don’t want to take all the risks and we never loan 100% to someone. So what we look for is someone who has some investment to put into it. And while some franchisors may fund franchisees over a period, we don’t want to see that. If they’re not good at saving up money of their own, then they are probably not going to be good at running a business either,” Scott said.
The second thing to ask is whether they’ve got the gumption needed to run a franchising business. “Ultimately it’s about having the right attitude,” said Phil Mowat, national partnership manager at ActionCoach, the business-coaching franchise. “We’re looking for winners, not whiners and someone who’s committed to putting in the hours.”
Additionally, aspiring franchisees should enjoy talking to people: franchising tends to suit extroverts. “Even if you’re buying into a franchising system where you don’t sell directly, there’s always going to be a level of marketing in all you do. So you have to be personable and be able to talk to people to run a successful business,” said Scott.
And even if the aspiring franchisee does tick all these boxes, there’s still one important question they should ask themselves before investing in a franchise. “Franchisees need to figure out what they’re most passionate about,” said Justin Livingstone, vice president of global development at Coyote Ugly, the bar franchise. “If you buy the wrong franchise you just end up buying yourself a job. And nobody wants that. Make sure you buy something you can be happy with – the money will follow.”
So while Blighty’s franchising sector doesn’t show any signs of slowing down, this advice should give aspiring franchisees something to think about before they jump in head first.