Franchise Your Business
to fill pages. The theory is that most people are on holiday and there isn’t that much news happening, so they have to reach out for the less likely.
A This is also the case in franchising! Although
renowned as a quiet month, this August has been surprisingly busy with new and interesting enquiries, but among them are some that could be considered as ‘not really viable’. We are in a great and privileged position as consultants because potential clients share details about themselves and their business (often without meeting) so we can give an honest assessment. This is what they deserve but it can mean that we have to disillusion people at this time.
Part of what we do is to educate potential franchisors to what good franchising looks like; as most who have read about franchising will know, it is about having a successful, reputable business model that works before you look to franchising. Let me give three examples of calls in the past month… Firstly, we received a call to talk about a business that was purely conceptual, and had no website, no trading, and nothing written down about the planned methodology at all. However, the person was absolutely convinced that all that had to be done was to market it and people would come. Now, it is perfectly possible that would be the case. But this potential franchisor can only offer an idea, and the opportunity to spend money on trying out the idea. We also pointed out to the enquirer that they could spend money on putting together some basic hypothetical marketing approaches and a rudimentary legal agreement, but it would be unwise to put together much else. When people ask for more detail, the franchisor is unable to provide it and so their investment in franchising would be lost from the beginning. Eventually, we did get the message across and decided that, in fact, the client should look at our recommended alternative strategy.
Up next was a person with an online
retailing business in a specialist sector, who clearly knew their stuff and had some interesting products. They were approached by a person in another country, with the idea that they would award a master franchise licence from the UK to set up a chain of retail shops. The problem we pointed out to the potential franchisor, quite simply, was that they had no experience of retail trading: no guidelines and no point of sale materials or electronic point of sale. In short, they had a product but had not road tested that particular delivery channel.
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www.franchisornews.co.uk
ugust, known as the ‘silly season’, can be a nightmare for journalists. They are short of news and so often resort to writing lightweight articles
We urged them to hold back until they had thought this through with the potential investor. The risk they faced was that considerable time and money could be spent on trying to put together something with that person in a semi-planned way, which would take their focus away from the business in which they had specialist knowledge. We then had a phone call from a trading business. ‘Great,’ I thought, ‘we can help this one.’ However, I discovered that it was a one-location food services business with a very broad menu. The food products were all brought in – there was nothing special about them – and the branding was not great. This was a secondary business for its owner and was run by a third party. The business had a turnover of less than £200,000 and very little profitability. We showed that once they had received their management service fees
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