Dean Curtis, corporate finance director, Beever and Struthers
My involvement with franchising is helping people either buying or, more often, selling a franchise.
If you want to set up and grow a business you may have to take over a lease and hire members of staff. There are barriers to entry. The cost of capital is more expensive so we are seeing people explore other ways, franchising being one of them.
Franchising is a tried and tested model and a stronger proposition for the high street banks.
You’ve got an existing client base, to a degree. They can get comfortable with it. So, there’s a lot more funding available for this type of opportunity, versus trying to go it alone with a very limited financial resource.
There are a lot of business coaches giving assistance to people looking to start up on their own and lot of those coaches don’t understand franchising.
A few years ago, I spoke to a lady who had just started up a business and was four months into it. The business was around checking properties at the end of a let, making sure they were in good condition.
She was struggling and I said to her, ‘Did you not look at the franchise market, because there’s a franchise that does exactly that?’
I met her again about a year later. She’d gone away and she’d bought that franchise and she was doing so much better. She had been trying to do it herself and she didn’t know there was a franchise out there to even look at. So, there is an education piece to be had.
Everybody thinks they can take on
a franchise but they can’t. You’ve really got to find a business that you feel passionate about
Typically, 50 per cent of independent non-franchise business see failure within the first two years.
We’ve had the cost-of-living crisis, a pandemic, war in Ukraine and changes in government, yet we have seen an increase in franchisors in the UK. There are around 1,000 businesses with active franchisees.
There has been a massive growth in personal services and hotel and catering along with children’s activities.
It is all about business growth, doing it alone is difficult. Businesses that have had great success franchising give other people the opportunity to thrive off their success.
We always talk about a franchisee doing due diligence around the business before they invest in it, but it’s also the franchisor doing the right due diligence on that person as well.
Have they have got the passion, the understanding of the business, can they hold a conversation? Because if they’re going to be a business person, they’ve got to be able to talk to customers and clients.
It’s also making sure they have a support network, because it is lonely at times when you’re running your own business and you’re starting up.
Rebecca Dean, head of franchise, Concept Claims Solutions
We have a network of 55 franchise partners and we have experienced big growth over the last three years.
We’ve really revised our business model and done a lot more work on the culture, making sure that the people with bring into the business, while they can have amazing technical skills, have the same personal values as the business. If they haven’t it’s never going to work.
Everybody thinks they can take on a franchise but they can’t. You’ve really got to find a business that you feel passionate about.
You tend to find the individuals who fail see it as buying a job or they don’t really have that passion for the brand. Franchising is amazing but you have to get the right fit and the match- making aspect is massive.
If you buy a cleaning franchise, what happens if nobody turns up? You’ve got to be prepared to get your cloth out and go and clean, and if you’re not prepared to do the dirty parts of the job that nobody else wants to do, then it’s not the right business for you.
It is an exciting sector. A lot of people joining have reached a stage in their career where they can’t earn any more money. The job market seems quite stagnant in terms of giving out pay rises but the cost of living and all your bills are going up.
So a lot of people are looking at how they can make a more money but still have that flexibility. We certainly see individuals who have absolutely transformed their lives.
They’re earning maybe three times the amount they were but they’re also getting that work-life balance.
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