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Operating a franchise: being part of the big picture

Written by Nigel Toplis on Wednesday, 21 March 2018. Posted in Franchise

While launching a startup seems like a good way to stand on your own two feet, launching a business within a well-established support structure can offer much more sustainable success

Operating a franchise: being part of the big picture

The phrase ‘in business for yourself, not by yourself’ captures the essence of franchising. If you open your own business you are responsible for every aspect, whereas with franchising you get all the benefits of being your own boss backed up by a raft of head-office support services. In addition to giving you access to the all-important brand, the franchisor is there to provide experience, know-how, proven operation methods, marketing tools, sales training and technical guidance, as well as a corporate identity and trademarks. 

In comparison, running your own independent business can be lonely and expensive. First of all, it can be easier accessing funding when you buy a franchise. Good franchisors have good relations with all banks and, because of this, it is often easier to get funding as a franchisee rather than as an independent owner.

But it’s not just about startup costs. With no one else to turn to for advice or specialist support services such as marketing, training and business development, when running your own business the only option is to pay for outside suppliers. Conversely, as a franchisee, access to all of these services will be included as part of your franchise package or heavily subsidised. Once you have set up your franchised business, you will be able to network with other franchisees to share best practice and advice.

By being part of a bigger group of people you will also be able to enjoy economies of scale when it comes to buying services and supplies for the business and benefit from the research and development and business updates carried out for the brand by head office. 

So, are there any disadvantages to being a franchisee? If you set up your own business you can do whatever you want. As the owner of a franchise territory you have to sign a legally binding franchise agreement and meet the expectations of the franchisor. There’s no point in becoming a franchisee if you are the type of person who likes to do their own thing and not be part of a bigger network. 

Franchising is not for everyone but with statistics from the bfa / NatWest Franchise Survey 2015 showing that 80% of startups fail within two years contrasting with the fact that over 90% of franchisees are still in business in the same period, there is an overwhelming case to be made in favour of franchising. But one thing remains absolutely true about franchising: it allows you to be in business for yourself but not by yourself. 

About the Author

Nigel Toplis

Nigel Toplis

About Nigel Toplis: Is managing director of four franchise businesses: Recognition Express (badges, signs and promotional gifts); ComputerXplorers (provides ICT educational classes for three-to-13 year olds); Techclean (a leading provider of system hygiene services to businesses in the UK); and Kall Kwik (a licenced operation and premier business print and design company in the UK). Nigel is a past chairman of the BFA, has written three books on franchising and, in 2007, became a Fellow of Lancaster University.

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