Franchising

Franchising
Why Should You Consider It?

Choose to go down the franchising route and you’ll be able to rely on us for ongoing franchise support. To learn more about how forming your own franchise network would help you, keep reading...

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Franchise Focus

An Introduction to Franchising

In simple terms, franchising is a method that enables you to quickly expand your business. As a ‘franchisor’, you’d grant an independent business person, or ‘franchisee’, the right to use your intellectual property, branding, model, and processes.

As a franchisor, it would be your responsibility to prescribe exactly how you want franchisees to operate the business. To do this, you would provide training and define the processes and procedures they must follow, using the systems you’ve developed. On an on-going basis you would support your franchisees, providing guidance and services to enable them to maximise the performance of their business. n return, the franchisee would pay you an upfront franchise fee, to acknowledge the right to use your brand and the transfer of your knowledge and experience, and a royalty, or management service fee on an ongoing basis to pay for the support you provide to help them set up and run their business. The franchisee would set up their business under your umbrella in a geographically defined area known as a ‘territory’, helping to build the profile and market share of your brand.

Remember, these budding entrepreneurs will find it much easier to achieve financial independence with your assistance and backing. In fact, recent studies suggest that 80% of new startups fail in just five years, while 80% of franchises succeed within the same time period. What’s more, it’s estimated that there are now more than 900 franchised businesses in the UK alone. These cover a broad range of industries from fast food to education. While the UK franchising industry as a whole is now worth approximately £17,000,000,000.

How You Would Benefit

Move forward and enlist Franchise Focus, and you’ll get all the franchise support you require. Once we’ve helped you establish yourself as a franchisor…

The Components of a Franchise Revealed

Our franchise consultants in the UK will work in collaboration with you to ensure that all of the aspects below are considered and agreed upon.

Protected Intellectual Property

Your IP, including any trademarks, patents, custom software, or copyrights, must be properly protected.

Franchise Agreement

The contract that all franchisees must sign. It includes a clear definition of the products and services that the franchisees can sell, and what their other obligations are.

Viable Fees

You’ll set the right price of the initial franchise fee, as well as determine the amount of ongoing management, royalty, and marketing fees to ensure the business is viable for both franchisees and you.

Financial Validation

You must be able to prove to any prospective franchisees that they can achieve profitability by following your business model. This will be carefully calculated.

Robust Recruitment Plan

A strategy must be developed to successfully identify and then recruit appropriately skilled business people capable of becoming franchisees.

In-depth Training Programme

The training programme will have to be designed to give your franchisees the knowledge and skills they require to run their operation. Each training course will need to be completed within a reasonable time period and involve regular updates.

Detailed Operations Manual

Your franchise operations manual must include a full, accurate, and clear outline of the processes and procedures a franchisee must complete in order to run their business.

Defined Territories

The exact size and locations of the areas that you’ll assign to your franchise partners must be carefully determined. It’s vital to get this right.

Continuous Support

It’ll be your responsibility as a franchisor to provide your franchisees with assistance as required. We will help clarify the scope of the support you should provide.

Pilot Scheme

This is a proof of concept that’ll demonstrate that your franchising model is viable. The scheme will involve between one and three franchisees.

Reliable Audit & Review System

In order to succeed, you’ll need to closely monitor your franchisees and ensure they’re complying with your agreement.

Could You Franchise a Business?

While it’s true that franchising has many benefits, not every organisation is suitable for it.

In Order to Become a Franchisor You Must Have:

Your business will be evaluated to see if it meets this criterion by a trained franchise consultant during a comprehensive feasibility assessment.

The Difference Between Franchising and Licensing

There are strong similarities between franchising and licensing. Both involve the use of a given company’s brand and intellectual property, as well as the payment of regular fees. However, one key difference is that in contrast to franchisees, licensees aren’t necessarily required to precisely replicate the business model of a licensor. The distinction between franchising and licensing is explored further here:

Franchising Licensing
Permits use of the owners IP - trademark, corporate style, systems
Owner exerts firm control over the use of the IP
Rights are granted for a specific term
Requires precise replication of the owners complete business model - methodologies, processes, procedures, documentation
The business is operated in a dedicated and fully accountable manner
The owner provides training in every aspect of business operation
Owner exerts control over compliance and requires the oporator to accept full responsibility, reporting accordingly
Owner provides ongoing assistance to the operator

Rest assured that as part of the extensive franchising advice you receive from Franchise Focus, you’ll be told whether your business is best suited for franchising or licensing.