What is a Franchise? Part 2
Part 2 of 2 in which Nick Strong of Select Your Franchise explains ‘What is a Franchise?’. You can also see What is a Franchise Part 1 if you missed it!
Transcript
Nick Strong, MD - Select Your Franchise
It’s worth noting that a franchise agreement, or franchise contract, is really central to the trading arrangement between the franchisor, the brand owner, and the franchisee who operates the business on a local level. It’s really vital for you to understand, as someone considering buying a franchise, what the obligations of the franchisor, the brand owner are to you, and what the obligations are that you have to commit to towards the franchisor. That will dictate the way that you work together and that will determine the relationship and how that works. So be really careful to pay special attention to the contracts that you are given and make sure that you understand all of the terms.
It is a two way commitment; a two way agreement. Most franchise contracts last for around 5 years so when you enter into that on both sides, it’s very much a two way selection process. Do you understand the brand? Do you believe in that brand? And does the franchisor believe in you and believe that you will take their brand and their system into success on a local level? So you’re very much working together in partnership. In fact it’s often said about franchising that you’re working FOR yourself but not BY yourself.
The franchisor, once you’ve signed the contract, will commit to training you. Normally the training will start in a classroom situation and the operations manual will be central to that training. You’ll go through meticulously what is required for you to replicate, in order to run your successful local franchise business.
Once you’re trained, and that might be a couple of days or in some cases a number of months depending on the sophistication of the system that you choose, you will then be put and launched into that trading situation. And its then that the franchisor starts to work with you providing on going support, and that could be field visits, regional visits, and you going to the franchisor for further and ongoing training.
The way franchising works, is that the franchisor provides the system for you to work, you work that system, and your success is shared together. So it’s very much: if you win the franchisor wins, if you lose the franchisor loses. It’s a team pushing together for mutual success and that’s why the proven system, training and support is so important both to the franchisor and to you when you choose your franchise.
The franchisor is also responsible for ongoing development of their system. We know that trends change in society and we know that people have new ways of doing things, new ways of buying, new ways of researching. It’s vital that the franchisor keeps on top of what is going on in the marketplace and to run continual development programs that they will then document, and that they will then share through training and support so you can effectively benefit from all of that research and development, eradicate what doesn’t work and take straight to market that new development which the franchisor has bought to you with a proven success track record.
So that gives a bit of an overview of what franchising is about, where you fit in and how it works. Now there are many franchises in the UK, as I said, close to a thousand. Only about half of those are actually accredited by the British Franchise Association. It’s important to identify if a franchisor is accredited by the British Franchise Association. So whys that? Well, any business could actually call themselves a ‘Franchise’, so how do you know that you are buying from an ethical franchisor, that has standards, that has a contract that stacks up in terms of the European Code of Ethics, and that will give you effective support and is a proven system.
The British Franchise Association exists to protect you, the buyer of a franchise. The stamp of the British Franchise Association shows that that franchisor has met certain standards that are necessary for the Association to accept that franchisor into its membership. So that means it’s a franchise that has met standards and can show and demonstrate success on behalf of its franchisees. It’s vital therefore to look for the sign.
If you are interested in one of the franchises that isn’t accredited by the Association that doesn’t necessarily mean that it’s a bad franchise, but you should ask and get a very clear answer that you’re happy with of why that business has not decided to become a member of the Association.
The Association is there to protect you the franchise buyer, so look out for the sign, and make sure you’re happy that you’re dealing with an ethical franchisor.
Now that you know what a franchise is all about, a great way to begin researching what is out there is to start with our free franchise matching service – get your franchise matches in just two minutes!
Be the Boss: Start a franchise
Joel Caws - Technical Director, Select Your Franchise
Many people dream of being their own boss; to get out of the rat race of working for someone else and to begin building their own business. For some of those people it will be just a dream that the security and familiarity of what they know will hold them back. For others they will find the motivation to begin to take steps along the process of making their dream a reality.
It’s not suprising to understand why it seems an attraction option, for reasons such as:-
- Not having to answer to anyone else
- The money you earn goes straight into your own pockets
- The flexibility to work around the hours that suit you
It seems like the perfect situation right? Well, if you can achieve the right balance then it might well be. The reality though is that any business depends heaps of commitment and hard work. While its true that you could enjoy those points above, retaining the motivation to work and be a success is something quite different.
If you are one of those considering being your own boss, be sure to have someone, a trust friend or family member that you can discuss your business with and that can be an encouragement and spur you on even when times are tough.
Start up a business from your own idea is one option but you might also consider a franchise opportunity which provides the same opportunity to be self-employed and effectively be your own boss. I’ve heard it said starting a franchise business is like… being in business for yourself but not by yourself. The benefit of a good franchise business is that you should have the full training and backup support of the franchisor who can lend you an ear when business isn’t going so well and provide suggestions and advice from their extensive experience to help you benefit and get the most from your franchise business. If you have not come across the concept of franchising before, you can listen to our short video titled ‘What is a franchise?‘.
Whether or not or not it’s through a franchise business business or simply a enterprise thought you set for your self, you’ll need to be prepared to work diligently and be dedicated to working your business system to its potential to enjoy the products of a successful business.
To see a range of UK franchise opportunities that match your requirements, check out our online two minute matching service.
Tags: be your own boss, franchise, franchise business, franchises, franchising, joel caws, Self employment
What is a Franchise? Part 1
Part 1 of 2 in which Nick Strong of Select Your Franchise explains ‘What is a Franchise?’. Look out for part 2 coming in the next few days…
Transcript
Nick Strong, MD - Select Your Franchise
I want to go straight into the first section and look at the question ‘What is a franchise?’. Clearly it’s vital to understand what exactly franchising is before you get too far into it. There are many, many franchises in the UK, in fact there are close to one thousand franchise brands in the UK so there’s a great deal of opportunity to choose from out there. Many like Hertz, Mac Tools, Snapon Tools and McDonald’s are household names that many, many people have heard of and some are emerging brands. As you can see here there’s a number of the brands that we have the privilege to be marketing through Select Your Franchise at this time.
So what is that’s special about this? Well, each one of these brands represents a proven system where a franchisor has gone out into the market, they have trialled different ideas, they have eradicated things that don’t work in that market and they have identified what works and what is proven and what drives income and profitability. They’ve have created a system, a system that others can follow. Also it’s vital that the brand is clear and recognisable so that when people see that brand they understand the values of the service and the service that they expect from that logo. So franchisors go to a great deal of time and effort to protect their logos and their brands in order for you, if you take on a franchise, to enjoy that protected brand to run your local business.
So franchising is really all about best practice. As I said, franchisors put months and years in developing what exactly works. So you don’t have to go out there and trial lots of ideas that you might have and see what works and doesn’t work yourself. You can go straight to that ‘best practice’ and you can start replicating that for you and your business when you start.
It’s called the franchisors ‘intellectual property’. The intellectual property documents everything that you need to know about that business system to drive your personal success as you go into your own business experience, with that brand, with that franchise of you’re choosing.
The intellectual property is documented in the franchisors operations manual. The operations manual contains all of these gems of information that are provided specifically for you to learn, to follow and to implement because when you do that, and you do that effectively, it massively increases the speed and the chances of you developing that successful business that you desire to achieve.
Continued in What Is a Franchise – Part 2… Don’t miss it by subscribing to the Select Your Franchise YouTube channel
