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This is what you can expect when you launch a franchise

Written by Tony Bowman on Thursday, 22 November 2018. Posted in Insight

Franchising may be a safe way to launch a business but you still have to work hard to succeed. Unfortunately, this fact escapes both budding franchisees and franchisors

This is what you can expect when you launch a franchise

Franchising is a two-way collaboration between a franchisee and franchisor but all too often either or both have distorted expectations of what that really means.

Let’s start with the franchisor. On many occasions over the years I have been asked to offer an opinion on how to go about franchising a business model. Sometimes this has been an actual business and sometimes just a concept. Almost always the person concerned has a dream of selling franchises all over the country and sitting back while the money from the franchisees pours in.

I also know from my personal experience of recruiting franchisees over the last couple of decades the majority have a very similar false impression of what to expect. All too often the expectation is that for a modest investment they’ll own a business that provides them with a healthy profit for little or no major effort except executing the task in hand – be it walking dogs, looking after old people or selling burgers. The reality for both parties is very different.

A franchisor will have to keep adapting the business model to changing trading conditions, increasing levels of competition, new technology and different legislation. Also, sometimes a franchisee under-declares their franchise royalties or fails to follow the business model. When that adversely affects the end-user it can damage the brand, which has a knock-on effect on the other franchisees. Either way, it's the franchisor's fault for not controlling the situation.

A franchisee on the other hand will have to work just as hard in a franchised business as they would if they started from scratch on their own. The only difference being that self-started businesses face a 90% chance of failing within their first five years. With a franchised business the odds are reversed and the possibility of failure is as low as 10%. Both will require massive effort, long hours and total commitment.

So, regardless of whether you're a prospective franchisee or a budding franchisor, don’t fall into the trap of thinking that franchising will provide you with something for nothing. 

About the Author

Tony Bowman

Tony Bowman

As well as winning over the masses with his mobile tyre fitting franchise etyres, Bowman has also served as chair of the bfa’s London and South East region. He fills his free time with flying, music, clay target shooting and tackling environmental issues.

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