When the going gets tough…franchising works

Choosing to run your own business is one of the most exciting, challenging and ultimately rewarding career decisions you can make.

When the going gets tough…franchising works

Choosing to run your own business is one of the most exciting, challenging and ultimately rewarding career decisions you can make. You will develop new skills and discover new things about yourself, sometimes on a daily basis. There will be big highs, and there will inevitably be some lows as well.

Of course, 2020 is proving to be a year like no other. We all expected the ongoing story of Brexit and how Britain will settle into its new relationship with Europe and the rest of the world to be a big feature of the year – and then Covid-19 came along and presented us with challenges of a type, and on a scale, that none of us has ever seen before. Every business is impacted. Some will thrive, perhaps due to good leadership, perhaps due to good luck, or simply because of the sector they happen to be in. But despite the extraordinary measures put in place by the Government, sadly the challenges will be too great for some businesses.

Businesses fail – even in good times. But it’s a fact that one of the most resilient business models is franchising. According to the British Franchise Association, 93% of all franchises are profitable, and less than 1% of franchisors close due to commercial failure each year. It is a sector that has grown consistently over more than three decades in the UK, with over 48,600 franchised units operating in the UK (up 10% since 2015) and employing over 710,000 people in 2018.

So why is franchising such a successful model, and how does it help in extraordinary times?

Partnership

Firstly, whilst you are running your own business, you are never alone. A good franchised business is all about partnership – successful, profitable franchisees are good for the franchisor. So at times like this, if you have chosen well, it will be the mission of your franchisor to do all it can to help you through the crisis.

The 2019 bfa/NatWest Franchisor of the Year is Driver Hire Nationwide, and its UK Managing Director, Jeremy Neale, comments:

“We have taken a range of measures to help our franchisees to deal with the challenges of Covid-19. For example, we all understand the need for social distancing, but as a recruitment business, this presented real and obvious difficulties – how do you conduct a job interview when you can’t meet face-to-face? We invested in IT and technical support, and developed a temporary remote candidate registration process, to enable our franchisees to continue to recruit, and to deliver the quality service that their customers still need.”

Other steps at Driver Hire included the creation of a “Coronavirus Hub”, to signpost all the relevant Government schemes, with clear guidance to help ensure franchisees’ financial protection, the introduction of regular network web conferences, and extensive marketing support to communicate key, consistent messages with both customers and candidates.

But the theme of partnership in franchising goes beyond just the franchisee-franchisor relationship. Remember, you are also part of a network of other franchisees. Each one will be unique, but each will also be able to relate to the highs and the lows of running a business like yours. This ‘informal’ support network is often cited by franchisees as one of the things they value most about franchising.

Established
business model and brand

It’s true that times of change are a great breeding ground for new ideas – and encourage a different way of doing business. Many successful start-ups are founded in difficult times. But it’s also true that solid foundations are important.

A good franchisor will adapt to new challenges, as we’ve seen, but it is reassuring to know that ultimately, you are working with a tried and tested business model. The circumstances we are all facing in 2020 are unprecedented, but history does have a habit of repeating itself, and whilst the causes of the current downturn are new, there are many lessons to be learned from previous crises.

If you start a business entirely on your own, this kind of experience can be difficult to access. If you buy into an established franchise, experience (and adaptability) should be hard-wired into the business model.

You will benefit from a recognised brand, and the day-to-day operating model (which may include legal compliance, IT systems, supplier relationships, sales and marketing and much more) will be robust. And whilst you will be expected to follow the business model, you should also find you have the freedom to act nimbly and take your own business decisions, within that model, to take advantage of new opportunities that come along.

Being part of a franchise can also help when it comes to business finance, since lenders are much more likely to take a positive view of a request for a request for additional finance when they know it is coming from someone who is working within a business with a track record of success.

Looking
to the future

Ultimately, none of us can know what the business landscape will look like when life returns to normal, or even what ‘normal’ will be. However it is a safe bet that franchising will still be a prominent part of the UK’s economy, and that people who took the decision to buy a franchise will be among the success stories that will be celebrated in the years to come.

This article was brought to you via Driver
Hire
one of the UK’s longest-established franchised businesses, and winner of the 2019 bfa/NatWest Franchisor of the Year.

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