Franchising is a concept that is ever evolving and as a firm that has supported franchise investors in the sector for in excess of 30 years it is amazing to reflect on the journey of many of our clients
Franchising is a concept that is ever evolving and as a firm that has supported franchise investors in the sector for in excess of 30 years it is amazing to reflect on the journey of many of our clients in franchising from single site operator to “multi-unit multi brand operators” (“MUMBOS”) taking master opportunities for incoming brands. Their journeys are not only inspiring but have imparted great lessons on how to manage the transition involved in that journey. I share below some of the tips learnt to help aspiring MUMBOs take the next step.
- Build on Your Experience
Successful MUMBO’s have all gained experience at the coalface of franchising through initial immersion in a single brand. They have worked at all levels and not just at management level and understand their concepts well. They are skilled operators, team builders, talent spotters, and measured risk takers with an in built propensity to graft and love of business. Learning to operate that single brand successfully is key to being able to be a good operator of other more diverse concepts as the skills learnt in one are transferable to the other.
- Maximise Resources
Once an operations team is in place for one brand it is relatively straight forward to use this team to also support other brands/concept. Although take care to identify when specialist resource is require and hire accordingly.
- Evolve Your Role
Starting from the bottom up can mean established operators find it hard to step away from the operational side of the business. Once you have a multi brand portfolio you should consider whether this is any longer appropriate – whether you need to have more oversight of the profile as a whole or if you need external resource to field that for you.
- Strength in Diversity
Franchising as an industry is one of the most diverse with concepts ranging from the traditional f and b to niche fitness concept. In troubled times when one sector suffers the others benefit and so it is shrewd business to spread your bets with franchises in differing sectors. Sometimes complimentary concept also work well – a starbucks by a gym – a beauty salon and a dog walking service.
- Build covenant strength with the banks
Speak to the banks that specialise in franchising to support your franchise journey – they can help with expansion plans and have their ear to the ground for new concepts that might interest you.
- Choose well
Successful Franchisors in other jurisdictions must be sure that their concepts work in the UK. For example is the brand registered as a trademark in the UK and does it have a common sense meaning in this country. Are you going to have to register the brand - if so do you know the scope and specification?
- Ensure you have the right Systems and support
What will the Franchisor provide in terms of support for establishing the brand in the U.K? How much training will you need - where? Usually this may involve overseas travel - at whose expense?
- How realistic is the Development Plan
How many stores must you open and in what timescale? How realistic is this? How easy is it to find suitable sites? Thoroughly investigate the local market to ensure that development schedules are realistic and achievable.
- Get advice on the contract
Franchisors will often require the master to sign up to the contracts they use for all their territories, which may be totally unsuitable for the U.K. To ensure that you are not agreeing to overly onerous obligations get advice.
- Draw up your own contract for use with your franchisees.
The master franchise agreement will often be unsuitable for this country containing unlawful
Or unethical provisions that put off franchisees from taking on the brand. Get advice from a specialist franchise solicitor accredited with the Bfa on the preparation of suitable contracts.
- Leverage your MUMBO Status
Your experience in franchising may exceed the experience of those wooing your custom to take their brand. This means you may be able to provide the brand with your franchise knowhow and learn from their corporate knowhow creating a mutually beneficial opportunity.
- Know your strengths and weaknesses and build a team that compliments them
Call in expertise where necessary to take your portfolio to the next level. Do not assume that expertise at one level equals knowledge of another. Ask for help and support and reach out to others to help make you portfolio operate to the highest of its ability. This may also mean needing new advisors at different stages of your franchise journey to support you.
Word to the Wise
Having a clear plan for franchise growth, a strong team, financial backing, and a sensible growth strategy can mean that franchising is a legacy industry for you enabling the transformation of the lives of generations and a platform for future growth.