If you’re looking to start up your own business, it’s worth getting your head around the benefits of franchising
There is a huge latent demand in the UK for people looking to run their own businesses even though research proves that setting up your own business from scratch can be high risk. Fortunately, there is another option: the bfa /NatWest Franchise Survey regularly shows that four in five new startups fail in the first two years, while over 90% of franchisees are still in business after the same period.
That said, franchising is not an easy road to riches. Rewards can be significant but building any business – be it a franchise or not – requires determination, hard work, ambition and dedication. More importantly, self-employment does not suit everybody. Fortunately, franchising offers people who are self-motivated, ambitious and determined some significant advantages.
Firstly, when you buy into a franchise you get a tried and tested system, which gives you access to a proven and well-established business structure, process or format. My old boss – Moshe Gerstenhaber, founder of Kall Kwik – actually called this process ‘system leasing’, his rationale being that the franchisee buys a licence to duplicate an existing and successful system from the franchisor for a specified period. What’s more, good franchisors continually develop and refine their business system to match changing market conditions and opportunities.
As a franchisee, you also get corporate backup. If you started up your own business, you would be responsible for absolutely everything, including sales and marketing, researching and developing new products, sourcing the best suppliers, doing the accounts and chasing debt. In my experience, it is rarely the business idea that causes startups to fail but the sheer enormity of the task of running the business. The franchisor provides the franchisee with experience, business know-how, operational methods, marketing tools, sales training, procurement advice and, of course, ongoing support, as well as a proven business system, trademarks and use of the brand. Essentially: total corporate backup.
When you take on a franchise you are getting not only a franchisor but a dedicated partner. I am renowned for saying that franchising is a marriage and the success of the franchisor is as much reliant on the franchisee as the franchisee is reliant on the franchisor. It is far easier for a franchisor to grow their network if they can show success and if existing franchisees are positive about their relationship with the franchisor.
Finally, the most significant advantage of franchising is the high chance of success as detailed in the latest bfa /NatWest Franchise Survey, which highlighted a marketplace with an annual turnover in excess of £15bn with a level of employment – circa 621,000 – that exceeds the combined armed forces. Franchising is a sizeable market sector with over 44,000 non-dairy franchise units in UK and nearly 1,000 active franchise systems.
So, if you are looking to get into business for yourself, franchising offers an increasingly attractive lifestyle and career option for people from all walks of life.