FRANCHISE ADVICE
TheBig Franchising
Thinking of turning your business into a franchise? We’ve got five big questions, four expert opinions and one clear conclusion - franchising is all about balance
F
ranchising is a business model built on systems, trust, and partnership. But within that framework lie
some fiercely debated ideas about what really drives success. We gathered our franchise consultants;
Phil Mowat, Rob Hall, Charlie Dickson and Rebecca Newenham, to explore five of the industry’s biggest talking points. Their insights show that great franchisors find the sweet spot between passion and process.
1 “Recruiting your 10th franchise is so much easier than your first” FOR “Finding the first franchise is always the hardest thing,” says Phil. “At the start, your business might be proven – but your franchise model isn’t. It takes a different sort of person to be that initial franchisee; who looks at a (relatively unproven) proposition and says to themselves: “I’m up for the challenge, and this is going to work.” “By the time you reach your tenth
franchisee, you’ve got credibility, happy operators, and refined processes. Also, over time, you naturally just become better at targeting, pitching and
84 Debate
recruiting. If you’ve got happy, successful franchisees, the tenth is a lot, lot easier.”
AGAINST Rob isn’t so sure. “A franchisee isn’t necessarily buying new – they’re buying the brand and the system. Early adopters are often pioneers. They buy into your story, your passion, and the chance to get in early. They might have more exclusive territories and closer access to the founder.”
THE VERDICT Early franchisees buy into the franchisor; later ones buy into the success of the network – the proof that the system works.
2 Franchisors should manage all suppliers rather than letting franchisees source their own FOR “It’s really important that franchisors manage the supply chain,” insists Charlie. “It’s about brand consistency – the quality of product or service. If the franchisor negotiates well, prices should be lower and margins higher for franchisees. With volume comes lower cost and higher margin. In franchising, customers expect exactly the same product (or service) in every location.”
AGAINST Phil warns against too much control. “What about local markets and pricing? If a franchisee can get the same quality 25% cheaper locally, that’s going to cause anguish. And managing every supplier adds a big administrative burden – they’ve got to manage all those relationships.”
THE VERDICT Both agree on the importance of fairness. “Add a small percentage for administration, don’t get greedy,” advises Charlie. Managed well, the supply chain offers consistency and cost benefits –but franchisors must remain fair and transparent to maintain trust.
3 The benefits outweigh the pitfalls of a low-cost franchise AGAINST “A low-cost franchise attracts people looking for a low-cost opportunity – they may not have the financial backing and mindset to make a proper business out of it,” says Phil. “That can lead to a get- rich-quick mindset, and for franchisors, it’ll take a lot of franchisees to make serious money.”
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