ADVICE
Past, present future
and I
n May of this year, I went to the Victoria and Albert Museum in London to see the Alexander McQueen retrospective called Savage Beauty. It showed some of the radical styles and costumes this brilliant designer had produced during his short life, designs and styles that infl uenced much of the thinking of leading fashion at the time. The exhibition clearly showed that in order to be a catalyst of change someone has to step out from the crowd and do something different – stand up and be counted.
Back in the 1970s, the UK franchise sector was a bit in the doldrums. There were a growing number of rather dodgy opportunists and pyramid schemes purporting to be part of the franchise community. They were feeding off its established reputation and, by operating in what we would now call an unethical fashion, the entire industry was becoming tarnished as a result. Step forward franchisors of vision. People who would stand up and be counted; people who felt we (the industry) could do better, and so the bfa came into being. Thanks to the original eight visionaries – Dyno-Rod, ServiceMaster, KFC, Prontaprint, Wimpey International, Ziebart, Budget Rent a Car and Holiday Inns UK – we now have a stable ethical framework within which to establish and develop franchise networks. Growth has been good. From 300 or so franchisors when I fi rst became involved in the UK franchise sector in ’88 to around 1,000
today, almost every year has seen an industry in growth in terms of numbers of franchisees, turnover and franchise brands themselves. Prospective franchisees now have a wide range of opportunities to select from and the future has every chance of continuing along the same lines. Eventually, however, franchisors must seek to
retire. Most franchised networks are headed up by a single person, a couple or a small group rather than a large corporate entity. There clearly are exceptions to this generalisation, often in the food and hotel sector, but for the majority of folk we recognise as franchisors the above applies. What, then, does someone who has conceived and created a franchised
“I believe the real leaders in the sale of franchises are those who have successfully executed management buyouts”
network do about planning their eventual exit and how many franchisors even have this as a remote thought on a day-to-day basis? Like it or not, time moves on, economic cycles favour various industries from time to time and no one is getting younger. Where is the vision and
Derrick Simpson reflects on how far the industry has come and considers where it will go
leadership for this part of franchising life? There are some examples of very successful changes of ownership and leadership within the industry. My fi rst experience of this was when Moshe Gerstenhaber, who brought the Kwik Kopy printing brand to the UK as a master licence under the name of Kall Kwik in 1978, sold the brand in 2000 to a group which had previously acquired Prontaprint. Corporate purchase like this is always a possibility for franchisors but I believe the real leaders in the sale of franchises are those who have successfully executed management buyouts.
These franchisors have planned an exit strategy for themselves and worked over a number of years to put into place a management team with the skills and drive to take over the reins and develop the franchise network and brand further. Brands such as TaxAssist, Signs Express and Cash Generators were led by people who thought about their future, built it into their planning and, through accident or design – I prefer to think the latter – provided the route for the next generation of franchisors to step up and be counted. This is the very thing that we, the founders of Franchise Resales, are doing at this very moment with our own business. It’s been two years in the planning but is now in progress. The only question remains: How are you planning your own exit? n
DERRICK SIMPSON
DERRICK is the founder of Franchise Resales Limited, a company that specialises in delivering resale transactions for franchisees and franchisors. He has played an active role within franchising since 1988 as both franchisor and professional advisor. Derrick is a member of the bfa expert panel of assessors for the QFP qualification and has been a member of the board of the bfa. He is a regular speaker at events on matters around franchise resales and is often asked by franchisors and other organisations to advise and consult on the franchise resales process and resales planning. Contact Derrick at
derricks@franchiseresales.co.uk or 01522 246 811
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