G’day Joe.
You will probably get a lot of anti-franchising opinions from the contributors to this and other boards. Simply because the majority are fiercely independent operators, and have an ingrained suspicion of franchises, although most probably know little about the subject.
Franchising is not for everyone. But, it has it’s place in our industry, as well as a host of others. To simply come out as anti-franchise, without appreciating the benefits it can provide, shows ignorance.
OK, I’m a franchisee in Australia, so some of my comments may not necessarily apply to the UK scene, but in general terms, franchising is the same world wide.
Firstly, all franchises are not identical. Some will require a monthly royalty, marketing and advertising levies etc. Some will do all advertising for you, some won’t. Some have exclusive territories, some don’t. Some will let you take work from outside your designated territory under certain circumstances, some frown on that. Some provide excellent backup and advice, some are very ordinary in that respect.
Franchises can offer two main advantages, and they both relate to time.
Franchises cut the learning curve. All those systems and procedures that are handed you when you buy a "turn-key" franchise may (depending on you) cut years off your "success cycle". Time really IS money.
Franchises generally are much easier to sell. The name recognition and all the systems available greatly reduce buyer apprehension and increase their appeal. In addition, most good franchises will help you market the sale of your company, many times to another franchisee looking to expand.
Brand recognition is an important consideration. I get a fair amount of work from people moving from other towns and cities, and even internationally.
Back up and support. The age of the Internet and these discussion boards has certainly helped the dissemination of information and advice. Prior to that however, most independents were left on their own to sort out problems. In a franchise system such as mine, I can get information and help from over 3,000 fellow operators from around the world.
Marketing. Why try and reinvent the wheel? A good franchise system will have a bank of marketing and advertising information available at the touch of a button. These are tried and proven strategies.
Insurance work is generally given to the larger franchises. This is an excellent source of income.
Many opponents of franchising refer to the fees payable. As I said earlier, all franchises are not the same, and the level of fees and levies needs to be taken into account. But bear in mind that it is unlikely you would have much of that income in the first place, so as your fees grow, your income will also grow exponentially.
In my particular case, my monthly franchise fee is a flat amount, not related to turnover, and it is less than the lease payment on my van. It is recovered by one or two jobs. Now, the downside is that there is no centralised advertising or marketing, but that suits me. I see little value in expensive television advertising.
As said earlier, the learning curve is drastically reduced. Most franchises have their own in-house training, and you have contact with fellow operators in the field if you need help.
As regards the questions posed by Len, these are covered by legislation here, and the franchisor is required to provide that information, plus more, before granting a franchise, or renewing one. My franchise is renewable every five years and that information is supplied readily.
Just remember, it isn't the franchisor doing the cleaning, If you don't perform, being a franchisee or independent isn't going to make any difference.
I hope that balances things a bit. Get plenty of legal and accounting advice before committing yourself.
But,above all...keep an open mind,
Jim