Franchising is clearly the future of the UK economy. After all, according to bfa/NatWest Franchise Survey 2015, it contributes £15.1bn to the economy and employs 621,000 people. But while everyone in the industry surely wants it to reach its full potential, no one can argue that it cannot do this without the effort of franchisees and so feeding the talent pipeline needs to be the sector’s number one priority. For this reason, we have asked three franchises what they think we need to do to help prime the pumps and bring new blood into the industry.
Shout it from the rooftops
David Glover, franchise director, Caremark
This all comes down to encouraging young people into franchising. And the problem there is that not enough people in general – never mind the younger generation – know about our industry. If you asked 100 people on the street if they knew what franchising was, how many would say yes? How many would talk to you about film franchises? Or rail franchises? Would they just repeat the terminology used by the media, none of which reflects business-format franchising? This is our biggest challenge and the main barrier to overcome.
Despite its heritage and global success, franchising is still widely unknown in the UK. I did a law and business degree at university and, over the course of three years, not once was franchising mentioned, let alone discussed. Franchising as a business concept needs be introduced at sixth form and university level and that requires the buy-in of government, of education and business ministers. How can we achieve this? By shouting from the rooftops. Forging relationships with MPs, lobbying parliament, demonstrating more widely the economic contributions of the industry as a whole and the amazing opportunities it offers everyone, not just young people.
Our greatest ambassadors have always been and will always be our franchisees. With a vested interest in serving their local communities, by their very nature, franchised businesses actually benefit their customers. There are some exceptional examples of young franchisees across all franchise brands who can be presented as role models and figures of inspiration. Most, if not all, have a story to tell that would inspire the public to dream and achieve their own versions of success.
On the whole, as an industry, we don’t promote, educate and inform anywhere near as much as we should do. But, as an industry, we are also very good at working together for the benefit of all. Through the bfa, we have a strong and powerful voice that can be leveraged for this cause. It’s not an easy job with a quick win solution: it will take time, effort and considerable resources. But, collectively, we need to champion a long-term campaign that encompasses the media, the education system and business community.
Grasp the next generation’s expectations
Aliyyah-Begum Nasser, managing director, Signarama UK
For me, the big message is that franchisors need to start seeing young people more positively and not as a ‘risky’ option. The typical franchisor is looking for someone who has business experience under their belts. We need to move away from that. As an industry, we need to recognise the skills, the ambition and the vitality that the younger generation can bring to a business and, indeed, an entire network. By way of example, 25% of the Signarama network is made up of franchisees aged 35 or under: successful, passionate business owners who may not have been able to raise the finance or break into our sector if not for the franchise. It may only require a subtle shift in mindset and messaging in most cases but if we’re going to continue to develop successful franchisees, we’ve got to welcome and embrace the next generation.
I also think one of the big things for young people today is that they want it all; ownership and autonomy but with support, reduced risk and financial assistance. As an industry, we need be doing more to make it clear that franchising gives you all that. How many young people are there who, for whatever reason, don’t study a particular stream of business or choose not to go on to higher education and therefore won’t even consider looking into franchising?
For the most part, those who know it will hear the word ‘franchising’ and immediately think of the big names – those that generally come with very prescriptive, repetitive end-products. To tick those ownership and autonomy boxes, we try to talk about how Signarama is a custom franchise – every product looks different depending on the customer, so the ability for someone to be creative is still there, working within the safe boundaries of the proven model. Understanding the wants and expectations of the next generation of franchisees means that as franchisors, we have to evolve and adapt our communication to match.
One of our biggest weaknesses as an industry is that we preach to the converted. We showcase the successes of our franchisees, the lives they change and the phenomenal businesses they build – but generally only to those people who are already in the franchise market.
Collectively, we need a consistent, national campaign to first of all educate the public about franchising and then inspire them to see it as their route to either business ownership or an employed career of choice. After all, there aren’t just thousands of franchisees out there, there are thousands of employees with niche franchise expertise too.
Thinking of franchising as the career is actually part of the problem – the career isn’t ‘franchising’: it’s the dream of owning a business, making a difference to your customers and being an active part of the business community. The career is the business, the brand, the sector or the discipline. Franchising is simply the vehicle.
Put the sector before opportunity
Michael Ziff, UK chairman, Transworld Business Advisors UK
Franchising can be a career you grow with. Many franchises can be low cost, financed to reduce risk whilst providing support and training so being your own boss at a young age can be a reality. In a franchise like ours, the network of franchisees is eager to share best practice, enabling you to develop your professional skills quickly.
We need more engagement with schools and graduate career centres to get younger people into franchising much earlier. Many young people work in franchising without knowing it, especially in part-time jobs with fast-food chains. Therefore, it shouldn’t be seen as a job but a career with development pathways through to becoming a franchisee.
The industry could and should be promoting to parents and grandparents of budding entrepreneurs, those people who may look to help with funding business ventures in franchising. We regularly hear of inheritance being passed on to children early to buy a home but why not invest that into the tried and tested business model that can provide a lifetime of income? This way the next generation can build sustainable income and wealth, employ others and have the ability to purchase their own home as a result of their business’s success.”
Awareness is the big key. Many people just never consider franchising as a career opportunity. People are turned off from franchising because of start-up costs. But, actually, you are buying into a business with a successful history and support network.
We are professional business brokers, helping people to buy and sell businesses every day. In the past, and despite our best educational efforts, we have seen people go off and buy a restaurant franchise, for example. They borrow significant family money and then find out that it costs more than they expected or budgeted for. This is a challenge the franchise industry faces as, in the wider public, it is seen as solely consisting of fast-food outlets and the idea that, as long as you spend the franchise fee, you’ll make a profit.
To address this, the industry needs to make a concerted effort to change our messaging and how we attract prospects to franchising. Primarily, we need to shift to a broader educational message about franchising before getting into specific details about individual business opportunities.