Nick Strong, MD - Select Your Franchise

The term ‘Master Franchise’ is commonly used in the franchise industry and is generally used to describe a  franchise business that is responsible for recruiting, and managing, a group of franchisees within a specified area. Probably the easiest way to understand the concept is to think of it in a business management 3 tiered concept:

1. Franchisor = The Boss, MD or CEO
2. Master Franchisees = Department Managers
3. Franchisees = Project Managers

The two most common types of Master Franchises are:-

National Master Franchise

The reason a franchisor might look to set up a National Master Franchise is where they take their franchise opportunity into a country where they currently have no presence. The National Master Franchisee will be responsible for recruiting franchisees to run the franchise businesses in their localities across the country.  The franchisor is responsible for training the master franchisee in how to replicate the proven system and work with them on any adjustments required.

Regional Master Franchise

A Regional Master franchisee will normally be responsible for recruiting and managing franchisees within a specific region that falls within a country. This could be where the country is very large or where there are a large number of potential franchisee outlets available within a country.  Having a number of regional master franchisees can help to accelerate the development of the brand in a new market against a single master franchisee.  This is because there will be a number of operatives advancing in recruitment and development simultaneously.  It can therefore make sense to have multiple regional master franchisees who are responsible to recruit, and look after, their franchisees in their region.

Is a Master Franchise for me?

Master Franchises are most suited to successful business people, who have experience in management, have significant capital to invest (£100,000+) and would enjoy bringing a new venture or concept to market in a country or region where it hasn’t previously existed. This can obviously be a challenge and requires determination as well as great networking and sales skills.

Many successful brands entered the UK via the franchise route including:

• McDonalds
• Subway
• Franchise Source
• Drain Doctor
• ActionCoach
• 1st Choice Business Brokers
• Kall Kwik and Prontaprint

If you think a Master Franchise might be right for you then you can begin by researching some of the master franchise opportunities that are available online.

If you are an established international franchisor looking to break into the European market, the challenge is how to enter a market that you are not fully familiar with. In order to successful bring your franchise system into the UK or Europe you will need a good understanding of the business culture together with a good knowledge of your target market in the country in question.

The Master Franchise Investment Conference, taking place at the upcoming Franchise Show at ExCeL in London on the 18-19 February, can help to get you a few steps further along in your research, meet potential investors and find out more information from industry professionals on launching your franchise brand into the UK or Europe.

The conference seminars will be hosted by The International Franchising Centre who have years of experience in helping International franchise brands establish themselves in the UK and European markets. Together with the chance to network with potential investors makes this event an important date on the calendar for any franchisor looking to export their franchise into the UK or Europe.

For more information or to book your place

Phone now on +44 (0)1904 561598
Email info@theinternationalfranchisingcentre.com

Joel Caws - Technical Director, Select Your Franchise

Investing can be a great way of putting spare finance to work in order to make more. There are plenty of ways to invest money from simply placing it in a high interest bank account or investing into a business venture.

Generally, the higher the risk, the greater the reward or loss. When you place an investment into a savings account you know you money will be safe, however the return you will get on the investment is typically low. It’s also linked closely to the interest rates at that point in time, so when rates go down, your return on your investment will also be reduced.

Some people choose to invest in stocks and shares which is a higher risk activity. The returns can be high for those who have taken the time to understand the way company stocks and shares move, but for those who are uninformed it can be a fast way to lose your money.

Property is another popular investment option with a fairly solid track record. Although markets can dip up and down in the short term, they tend to rise steadily in the long term so investing money in property might realise a return if you are prepared to wait for it.

Investing in a business is also a popular option. There are several ways to do this by either starting up a new business or buying an existing one that is already trading.

Choosing a franchise business may help to improve the success rate further as a franchise is based upon a proven system. Many franchises can be run as management franchises which are perfect for those who want to invest but not get caught up in the actual day-to-day operation of the franchise business. By recruiting staff to run the business, you can effectively sit back and manage the business without getting your hands dirty.

There are also franchise resales which are franchise businesses that are already setup and have been trading for some time. Choosing a franchise resale can further reduce risk as there will be a trading history to look over before making a decision to invest.

No investment is without risk of some kind, however a franchise business has the added backing of a proven business formula and training and support. Generally the success rate is good with around 9 out of 10 franchisees in any given year turning a profit*. If you do choose to invest in a business or franchise option, one thing is for sure: the success of the venture (and the return on your invested finance) will be measured by your commitment, hard work and dedication. Without a determined and committed approach, any business will likely fail.

(* figures from by BFA/Natwest annual franchise surveys)

Nick Strong, MD - Select Your Franchise

An investment franchise is one that generally requires a good amount  of initial investment that may require some time to achieve a return. You could consider all franchise opportunities an investment in one sense since all will require some form of initial funding in order to get started and then look to repay it as the business becomes profitable.

However, some franchises require very little in the way of initial investment. There are some low cost franchise options that you could even be started up off a credit card or small personal loan.

Aside from these, there are a number of franchises that can be considered particular suitable as an investment option. Typically, they may be management type business options which do not require the investor to take too much of a hands on approach but rather recruit staff to manage the day-to-day operation. Popular options would of course be high street retail franchises, cleaning franchises or any other options that have the potential for hiring staff.

Another attractive option as a franchise investment would be to buy an already established franchise business. These are commonly referred to as franchise resales. The franchise for sale may have already been running successfully for many years but for reasons of maybe life direction or retirement, the owner wishes to sell the business as a going concern. Although naturally these will attract a higher price tag, they will usually begin to repay the investment straight away which makes them an attractive option.

Whichever option you choose its important to take due diligence in making your investment. Investing wisely and having done adequate research, will ensure you the best possible chance of success in your business venture.

Joel Caws - Technical Director, Select Your Franchise

It seems a bold statement buy could buying a franchise business really be a guaranteed investment?

Well it would be great if this were true. To make a guaranteed investment is surely every business investors dream, the holy grail! Unfortunately, there is nothing guaranteed in life least of all when it comes to business.

There are however ways to ensure best probability of success. Many investors in the stock market use market signals to improve their chances of investing in the right stocks or shares and so increase their probability of getting a return on their investment.

In business, marketing departments will use statistics at their disposal to assess where best to spend their money to achieve the best return.

The point here is that, although the market trader and marketing department will do their best to put their money where they believe they will get a return, there is in fact no guarantee they will make a profit on their investment or even get their initial investment back.

We can see that it makes sense to study as much as possible where you are putting your money. Then you can invest wisely and know that you have made an informed choice.

As with any investment, franchising does indeed carry a risk. The benefits though, are that there is some statistics and track record to look at which can help you minimise the risks of your investment:-

• The recent BFA/Natwest 2010 Survey reported that 89% of franchise businesses in the UK were trading profitably in 2009. As opposed to conventional business start ups which commonly 4 out of 5 don’t make it beyond 3 years of trading.
• Franchise opportunities should be based on a proven system which gives a greater degree of security. To be a franchise, the franchisor should have run pilot businesses to test their concept and then documented the processes that make the business a success.
• Existing franchisees can help to reassure you that the concept works. This is why its important to speak to existing franchisees during the buying process as they have already walked the road you are walking.

Given the above, a franchise opportunity can appear favourable, however that doesn’t mean you should throw caution to the wind and invest your money into the first franchise opportunity you see. Like any investment, consider carefully and research the specific franchise that appeals to you. Remember its a long term commitment so you need to make it a good one!

Joel Caws - Technical Director, Select Your Franchise

Domestic Services franchises make great recession resistant businesses in the UK.  Due to the fact that many domestic services are necessities its likely that any franchise in this sector will do well since there is constant demand due to services breaking down or requiring service.

Domestic Services franchise businesses cover a range of services for example:-

• Domestic Cleaning Franchises
  Houses always need cleaning whether it be general house cleaning, carpet cleaning, upholstery cleaning and such like.
• Handyman Franchises
  Theres always odd jobs need doing round the home and finding a handyman is not as easy these days as it was. Specialist handyman franchises have sprung up which cater for this market
• Kitchen Service Franchises
  Kitchen services such as oven cleaning cover the kind of jobs people put off constantly and having someone else do it for them is an attractive proposition. Kitchen door replacement franchises can give new life to a kitchen which is in need of a facelift.
• Utility Franchises
  Gas and Electrical services are increasingly regulated and there is a constant need for workmen with the skills to carry out home electrical and gas servicing and repairs.

As with any business investment, when looking into buying a Domestic Services Franchise its wise to carry out your research properly:-

1. What is it you enjoy doing? Research the options and see what appeals to you. You can visit our domestic services franchise section for a good selection of franchise options.
2. Look at budget and finances… what are the franchise fees and setup costs involved in the franchises that are of interest to you.
3. Make contact with the franchisors which interest you and find out more about their systems.
4. Arrange to visit the franchisors head offices and get some insight into their operation and support facilities.
5. Get a list of franchisees that you can talk to about each franchise. This should give you a realistic, on-the-ground view from those people who are running the franchise day to day.
6. Make sure your informed on the legal side of things by speaking to a specialist franchise solicitor.
7. Most of the major banks have franchise sections… make contact with them to find out what finance and facilities are available.
8. Finally, make your choice and commit yourself to the training and working the proven system.

Joel Caws - Technical Director, Select Your Franchise

Reports from the BBC that the number of mortgages approved during October grew slightly might be an early sign that obtaining lending from banks is becoming easier. This could be good news for the franchise industry as many franchise opportunities depend on access to financing in order to setup and trade.  There is a huge price range of franchise options with some investment levels low enough to be funded from a simple overdraft to larger five figure investment franchises which may require more in the way of a business loan.

Undoubtedly, the high street Banks are still being cautious but appear willing to lend where there are higher levels of security. A franchise based business can represent a lower risk to a bank than a brand new business start up with no previous track record or history.

A franchise business benefits from the proven system on which it is based. This gives a much more secure opportunity for the bank to provide finance options since they can see on paper that the franchise model has been run successfully already. In addition, the franchise sections of the bank are often familiar with most of the popular franchise options in the marketplace.  This can also provide some extra insight for franchise buyers by how willing the bank is to provide finance.

There is bad and good news in the revelation that over 50′s may need to work longer because of the fall in value of savings and pensions.

The bad news is for those that do not like their work and seek to retire as soon as they can.  The good or better news is for those that enjoy what they do and would not want to stop what they do at retirement age anyway.

Many franchise business owners are 50 and over and love what they do.  They are building their own business and that can give a healthy income now and for many years to come.

In addition a franchise owner can enjoy the work he does now and earn a good living.  He can also plan to exit/sell his business at time of his choosing which can increase access to capital when he does decide to retire.

Franchise business ownership is a genuine investment option for over 50′s.  To enter you will need to have capital and time to invest and want to build your own business using your chosen franchisor’s proven brand and business system.

Franchise business ownership can both empower and give genuine choice when it comes to the issue of retirement.  Enjoying your work now and having the power to determine your own future is a healthy prospect for franchise owners – especially in these times.

It is vital that all over 50′s have their retirement exit plan in place.  It is also vital to spread risk when planning for investment.  Franchise busienss may work very well as a central part to your portfolio.

To find out more about UK franchise opportunities and read industry expert advice visit – www.SelectYourFranchise.com.