20
I
NVESTING IN a franchise is a huge nancial
“Do as the most successful
a job for life, yet nd that they struggle to adjust to
undertaking, and so you’d expect everyone to
franchise owners do – they
the new routines and systems. Some franchisees
get it right. After all, there’s the back-up of an come a cropper by thinking that changing the
work hard, and focus on
r
e established franchisor that has put years into making franchise drastically will improve it. And while many
a pro table business model work awlessly – and
what they are good at”
franchisors are happy for new franchisees to bring
a
t
u
since you’re buying a tried-and-tested model, the risk their skills acquired through a successful career to
of failure is substantially lower than for other start-ups, even faced with the improve the marketing or accounting methods of the entire group, others
challenges of recession. are less happy about those who are so keen to reinvent the wheel that
Start-up costs are hefty – the average total start-up fee for a they fail to use a successful business model effectively.
m
a
i
n
f
e
franchise operation, including equipment costs, the franchise fee and Talk to new franchisees, and many are happy to admit that taking on a
working capital, was £64,900 last year, according to the NatWest/British franchise is a steep learning curve. Even after a successful career, they often
Franchise Association Franchise Survey 2008. Add in the amount of sheer nd that they need to quickly acquire new skills – sales, marketing, technical
entrepreneurial verve needed, not to mention the demands on the new or human resources expertise. Others have simply underestimated the
franchisee and their family, and the pressure is on to get it right. impact on their family, and the sheer hard work and self-discipline needed
But be warned – things can go wrong. While nine out of 10 franchisees to build a successful franchise.
say their business is trading pro tably, that means that around one in 10 is Yet many a successful franchisee who admits that the early years were
running at a loss. And surviving the rst two years is vital. tough then goes on to acquire new skills to build the business, and calls on
So what goes wrong? Talk privately to experienced franchisors, and while the expertise of the franchisor and fellow franchisees to make sure they get
they enthuse about the successes of their most go-getting franchisees, they it right.
also despair at the under-achievements of the minority who get it wrong. A So for new franchisees who want to prosper and avoid the pitfalls, we
not untypical tale: the franchisee from a strong corporate background who talk to some experienced franchisors about the do’s and don’ts of being a
spends his or her redundancy cheque in the rm belief that they are buying successful franchisee. ■
HEAD OF FRANCHISING, McDONALD’S “THINK LONG TERM”
DEREK ROGERS
well as involving spouses, we also have a
TO BE successful, franchisees need to make Second Generation programme which
sure they have enough working capital. We includes siblings, and encourages longevity
work to a ratio of 3:1, so 75% borrowing to for the business.
25% capital. Since we work very closely with Think long term – our standard
several banks who understand our system, they franchise term is 20 years, so a franchisee
offer favourable rates. should be in a good position to build the
Get involved – we encourage our business and plan an exit strategy too.
franchisees to use their entrepreneurial Don’t rush into anything: never
talents and creativity to help shape our underestimate just how much hard work
marketing strategy, which is then approved goes into making a success of a restaurant
by an independent company with direct – it’s not like buying a job. We always
input from our successful franchisees. encourage prospective franchisees
Or franchisees can join our planning to talk to our competitors too,
arm, which likewise uses the skills of our and think hard about
franchisees. But don’t try to re-invent the whether franchising
wheel in an individual restaurant – we have is really for
a very successful business model, and our them – that
customers value consistency. way, we cut
Remember to involve family in the the risk of
business, because their support is vital. As failure.
April 2009
www.businessfranchise.com
BF019-022_SpecialFture_Apr09.indd 2 25/2/09 17:33:43
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174