Enquiries into life as a franchisee are on the rise with many entrepreneurs ditching the idea of starting up a business in favour of teaming up with an established brand. But where and how do you get started and what does it take to be a successful franchisee in this post pandemic world…
It’s no secret that the franchise industry continues to be a big player in the UK.
The term franchise is still very much associated with the USA, but in March last year, data showed that it contributes over £15 billion to the economy over on this side of the pond, too – a huge increase of 46% over the past decade – while well over 700,000 Brits are employed by franchisees, as well.
The question, however, is this. Is working with a franchisor becoming a safer bet than starting up your own business? Due to the ongoing impact of COVID-19, the answer is yes.
Further statistics released in April of this year by the Enterprise Investment Scheme Association showed that within 12 months, nine out of 10 growth businesses may disappear if urgent help is not delivered.
With that in mind, there are several reasons why working with a franchisor is now becoming the favoured option – not least because 97% of UK franchises were operating at profitability last year.
The ability to work from anywhere is also appealing, as is the fact that you have the support of a big and experienced company behind you, which provides the necessary training and guidance as you progress.
All of that combined and it is no surprise that over the last four months, InXpress, a global shipping solutions franchise that was recently shortlisted for the 2020 Franchisor of the Year and International Superband awards by the British Franchise Association, has seen an 81% increase in enquiries relating to starting up a franchise, during the pandemic.
There’s far more to it than just McDonald’s and Subway as well. Currently on the British Franchise Association’s ‘find a franchise’ directory, there are 260 different businesses operating as franchises right now and that’s just the website’s full members. It is thought, however, that there are over 20,000 franchises in the UK right now.
With many aspiring business owners now exploring this new option instead, here’s a helpful guide of how to get started and thrive in the world as a franchisee.
Find a franchise that matches your passion
Do your research and work with a business that genuinely interests you. There are a lot of opportunities out there and you should be contacting the British Franchising Association to find out which is the best for you.
There are also lots of online portals that help matchup what the right franchise is for you, pairing you up by digging into your skillset, your ambitions, and what you’re interested in.
There are several sectors to work within as well. Some that are thriving right now – even in the midst of COVID-19 – include fast food, senior care, home services, junk removal, commercial cleaning, and property management.
That aside, there are also retail, cafe, gym, education, maintenance, and restaurant options to consider.
Let’s talk money and your business plan
The startup fee differs from franchise to franchise. For example, it costs £35,000 to start a franchise with InXpress and gives you access to the brand, its collateral, training programmes, support network, and database.
The upfront fee, naturally, is the biggest deterrent for anyone wanting to startup in the world of franchise. There’s also a monthly management fee – a percentage taken from any profit – that any aspiring franchisee would need to be aware of. That allows the franchise to keep running and keep growing the business.
Most franchisors, however, work with trusted lenders that will be able to assist you with that payment
Secondly, you also need your working capital. There needs to be a clear business plan that clearly shows your living plan for an 18-month period. The likelihood is that you’re going to need the support of your family at the beginning of this new venture because getting to the stage where you are profitable can take time.
Some start making a profit really early, but there’s definitely a need to plan for that not happening. Our failure base is low, but it can take time to build up a customer base. You still need to be able to pay your mortgage during that time.
So long as you have a laptop and good WiFi, you’re all set
The biggest appeal of teaming up with most franchises is that you can do it from anywhere, so long as you have a WiFi connection.
You could quite literally work from your bedroom! We work with people that spend their days sitting on a beach working – some earning more money doing that than they had ever before.
Many start working from home and progress to working from an office. That applies to even some of the biggest franchisees in the world, including the founder of InXpress, John Thompson, who started this company from their bedroom in Rochdale.
In short, it’s very flexible. You work your own hours and fit it around your life.
Don’t skip the training
Franchisors all across the world hold some form of training to help franchisees get started.
Typically, there is a week of hard sales training and then a week of operational training. It helps you get clued up on the latest in marketing, finances and systems.
That training gives you the basics, like for example how many calls need to be made a day and how much time should be dedicated to ‘sacred selling time’ (time spent on the phone).
It gives the key principles of how to make it work and always say, if you follow the model, it won’t fail.
How to build your customer base
A lot of it comes down to spending time researching companies that would be relevant for the service your franchisor is providing. This can be done through platforms like LinkedIn, Facebook, eBay, Instagram, Twitter and even referrals.
It’s all about finding those SMEs that we can help. Consider yourself a consultant rather than a salesperson and asking how your franchise can add value to another’s business – especially right now during this pandemic.
To conclude
For anyone that can manage the startup fee, franchising should be considered a serious option.
Life as a franchisee is a long-term game and by establishing a viable business plan and teaming up with a franchise you are laying down the foundations that are required long-term success and taking out the risk that would otherwise come with starting up your own business.
Switching to this line of work is far more tempting for aspiring entrepreneurs just for that reason, though. The ball is in your court. There are thousands of options available and we’re living in an era where the ability to work from anywhere in the world, as well as on our terms, is becoming the greatest appeal when it comes to establishing a new work/life balance.
Looking at the bigger picture, however, one thing is clear. Its importance to economies across the globe is only going to grow.
