FRANCHISE ADVICE
"A good franchisor realises that their franchisees are business owners in their own right, trusting them with the brand and intellectual property of the brand"
The important thing here is
not so much how many days' training is included, but if this is sufficient for the franchisee to fully understand the concept and be able to operate it. Another important factor to
consider is the profit margins in the product or service offering. If the business buys, or manufactures, a product for £9 and sells it for £10, then it is difficult to see how sufficient profits can be generated to satisfy both franchisee and franchisor. If, however, there is good margin, sufficient for the franchisor to take a percentage and still leave enough for the franchisee to make a good profit in their business, then this point is satisfied. Finally, a franchisor must
have an understanding that their franchisees are business owners in their own right, and trust them with the brand and intellectual property of the brand. They must have a culture of support, and understand that their success will be wholly dependent upon the success of the franchisees. Likewise, the franchisees must understand that they are buying into a proven system, and must follow that system, and not go off and try and re-invent the wheel.
Looking to the future As we begin to emerge from the severest restraints of
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lockdown, and always bearing in mind that there may be new waves of this virus for some time to come, another important factor to consider will be how a franchise has performed not just prior to the pandemic, but how it adapted to, or modified its practices to cope with a changing environment. Do not just assume that because a business was successful pre- Covid, that it will be just as successful post-Covid. The ’New Normal’ that
we will all start to experience will be good for some businesses, and not so good for others. My advice to the growing number of people who are now looking for their ‘new normal’ is the same as it's always been – to conduct thorough due diligence
in any franchise business before deciding to join them. This has never been more true than now, and I would advise being doubly sure before making any life- changing decisions. Franchising has always, and
continues to, offer the platform for businesses to expand, and for individuals to buy into a tried and tested brand and to run a successful business.
ALAN WILKINSON, QFP is head of franchise development at The Franchising Centre
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