The question, ‘why franchise?’ and ‘would it be better to do my own thing?’ have been asked and answered many times over. This column will cast a spotlight onto the best-in-class franchisees to highlight what it takes to be a success.
The most successful businesses in Franchising are in the Food and Beverage (F&B) industry. There are many overlooked positives and great benefits from becoming a franchisee of a great franchisor, especially in F&B.
I speak not only as the MD of one of the largest Costa Coffee franchisees in the UK and the first Costa franchisee to acquire country master rights overseas, but also as a franchisor of the largest dessert parlour brand in the UK – Kaspa’s Desserts Ltd.
If done correctly, franchising can be a quick way to make your business successful, helping you to grow and scale-up at speed. The experience and knowledge you acquire along the way from a large franchisor will help you open many doors into the business world that can otherwise take many years.
The greatest benefit to franchising
Being a franchisee can be extremely beneficial due to the association with an established and successful brand, helping with various aspects of efficient business development, such as property selection, bank funding, and marketing.
Despite this, a less noted and often overlooked benefit is the community of like minded franchisees that become available and accessible.
The experience and knowledge that other franchisees offer on how to scale a business is invaluable and is built on years of steady growth; they are all people who have done the practical work as well as understanding the theories (there’s nothing more annoying than listening to people who have never run a franchise business try to teach others about franchising). The connections made with fellow franchisees in the business world can help you to grow your business faster than advice from the franchisor, or any external body, could ever provide.
The foundation of a franchise community should be built on its franchise association.
A great franchise members association forms a space for networking to understand fellow franchisees’ businesses. It nurtures creativity, brainstorming, and collaboration when reviewing the business’ processes by the people who truly understand them. As a space dedicated to sharing best practices and great ideas, it should also be used to enhance the business for every franchisee involved, helping and supporting those that may be struggling with parts of their business.
Last, but definitely not least, it creates direct access to the franchisor. The ability of the franchisees to organise themselves effectively within the association is paramount to effectively communicating ideas, concerns, and improvements to the franchisor. Lest we not forget, there is power in unity.
The best of franchising ‘The Elite’
Taking it a step further, you will also have the “Super Elite Franchisees” who have become superstars/captains of industry in their own rights. These franchisees will have acquired multiple franchise models, some have even developed their own franchise model which they now franchise out. Some have gone on to develop their business internationally.
All of the best franchisees know each other and bounce off of each other’s drive and enthusiasm. All of them started with one franchise concept.
These are the “Kings of Franchise”, true Elite Franchise Royalty, and have businesses that most multinational companies would envy. (Some have 200 plus stores and employ 10,000 plus staff in the business).
They manage a slick and well-oiled machine, letting the franchisor deal with the product development and marketing issues, while they focus on growth and people. They run their businesses with less overheads and expenses than companies of similar sizes who must manage all the infrastructure of running their own brands, and therefore are often more profitable. They now have a franchised business bigger than most competitor brands that do not franchise (there are few non-franchised companies left in the market. Recently we have seen many good brands fall by the wayside during C19, or they have been taken over by larger companies).
During C19 we have seen the franchise business grow from strength to strength with very few casualties, this cannot be said for brands without a franchise model. We can now see some great brands looking and starting to franchise. Brands such as Pret, Wasabi, Itsu, Paul and M&S to name just a few.
When we look around the world at all the great brands in the F&B business franchise, some of these are the biggest and most recognised brands in the world; McDonalds, KFC, Starbucks, Costa Coffee, Dominos, Dunkin’ Doughnuts, Krispy Creams and Pizza Hut. One of the largest convenience stores chains in the world 7-Eleven is franchised, as is the largest real estate agency Keller Williams. All of these great brands have built successes on franchise and with their successful franchisees.
Consumers like brands, they like the certainty of consistency and quality from brands. People are prepared to pay a premium for products from a well-known business model that has proven itself over time. Franchising of good brands is set to grow and grow and there has never been a better time to become a franchisee.
Home deliveries have helped increase profitability for almost all the brands and also allowed for dark kitchen stores which have much lower overheads and even greater profitability. This trend is not fading away and is set to continue as a way of life going forward.
In next month’s column I will introduce the top 20 franchisees in the UK. Each has 100 or more stores and are the very best of franchising. Meet the guys and hear how they started and what drives them and how they have been able to scale their businesses to the dizzying heights they have reached. They will share their thoughts on success and what it means to them and learn about their direction of travel and the great teams they have in place around them.