Be your own Boss
For many leaving the service the temptation to be your own boss is tempting. After years of following orders and instructions as a cog in a far bigger wheel, being master of your own destiny can be an attractive proposition.
But what can you do? How can you set up a business using the management and leadership skill gained during your years of service. And, importantly can you afford to finance your dream of self-employment. The answer could be to start a franchise. There are hundreds of opportunities for you to do your own thing but under the banner of an established and tried and tested organisation. If this sounds attractive the first port of call should be the British Franchise Association (bfa). One of the bfa’s main roles is to help potential franchisees recognise the good franchises and the not-so-good, as well as to help businesses involved in franchising to secure their own position amongst the “good”.
This work is not just a philanthropic exercise for reputable and responsible franchisors. It makes good commercial sense. The ability of franchisors to attract potential franchisees to invest in their systems depends crucially on their own reputation, and on the reputation of franchising in general.
It was for these reasons that in 1977 the major franchise companies in the UK decided to set up their own association. The British Franchise Association was formed to act in the interests of the industry as a whole in assessing and accrediting franchising companies as those which meet its criteria for the structure of the franchise business, the terms of the contract between franchisor and franchisee, the testing of the system and its success as a franchise.
Franchisors and professional advisors to the UK franchise industry wishing to be accredited must put themselves forward to the bfa to be tested against its strict and extensive criteria. Only if they successfully pass accreditation are they then able to join the bfa as a member, gain access to the benefits of membership and become represented by the British Franchise Association.
If you are considering various franchise opportunities there are some key considerations that you need to bear in mind. You need to take the time to understand franchising and appreciate where the opportunities and pitfalls are. This robust business model, fuelled by dedicated individuals, encompasses many different skills and backgrounds – opening up countless opportunities for people looking for a new start.
You first need to find out whether franchising is right for you before you start looking at the individual businesses.
You will then need to look at the businesses that franchise and see which franchise opportunity is suitable for you (if any). With hundreds of different brands, investment levels and business types. The bfa website will help get the information to take the right steps in franchising. It also provides a full list of its member companies who are offering franchises in a vast choice of business areas.
How does it work?
The bfa offers the following definition. Business format franchising is the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade as their own business under the brand of the franchisor, following a proven business model. The franchisee also receives a package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis (including a predetermined agreement length, with renewal options).
The principle is simple – some companies choose to grow, not by developing in the conventional way but, by granting a franchise licence to others to sell their product or service.
There are clear advantages to this:
• You don’t have to come up with a new idea – someone else has had it and tested it too!
• Larger, well-established franchise businesses will often have national advertising campaigns and a solid trading name
• Good franchise businesses will offer comprehensive training programmes in sales and, indeed, all business skills
• Good franchise businesses can also help secure funding for your investment as well as, for example, discounted bulk-purchases for outlets when you are in operation
• If customers are aware that you are running a franchise business, they will understand that you offer the best possible value for money and a consistent quality of service – although you run your ‘own show,’ you are part of a much larger organisation
Who is in control?
Each franchise business outlet/unit is owned and operated by the franchisee. However, the franchisor retains control over the way in which products and services are marketed and sold, and controls the quality and standards of the business.
What are the cost implications?
The franchisor will receive an initial fee from the franchisee, payable at the outset, together with on-going management service fees – usually based on a percentage of annual turnover or mark-ups on supplies. In return, the franchisor has an obligation to support the franchise network, notably with training, product development, advertising, promotional activities and with a specialist range of management services.
The bfa also offers a range of educational franchising seminars. As the voice and self regulating body of the franchising industry, the British Franchise Association (bfa) is well placed to educate individuals and businesses alike about the opportunities that franchising, as a successful business model, can bring. The bfa offers a number of franchise seminars at a range of locations across the UK.
There are two key types of franchise seminars that the bfa operates.
The most relevant to the service leaver is the one for those looking to invest into a franchise opportunity ‘to become a franchisee Seminar’. whichfranchise.com is currently supporting these seminars to help you find out if franchising is right for you. Go to the franchisee seminar page of the website to find out how you could get 1/3 off the cost of a seminar.
Some of the key aspects which will be addressed in the franchise seminars include:
• The franchise agreement – have you seen a proper, legally-drafted franchise agreement, do you realise its size and why it is weighted in favour of the franchisor? And why this gives the franchisee more security
• Funding – which banks have specific franchise departments and what are the benefits of dealing with ones who do specialise in franchising. Many banks do not have dedicated franchise teams which means that they don’t fully understand the intricacies and idiosyncrasies of franchising
• The time and financial commitments – which will undoubtedly be necessary in order to ensure the success of the business
• The advantages and disadvantages of franchising – what you really need to know in a plain and objective manner
The franchising industry has grown significantly over the past 30 years and the bfa’s role remains to ensure that it retains its ethical approach, commitment to best practice and robustness – even in the toughest of economic climates. As part of the association’s educational role, it runs these franchise seminars to provide information and advice to businesses wanting to franchise or people considering joining a franchise. The bfa’s main goal is to protect and strengthen the franchising industry in the UK, so it is just as important to help you decide whether franchising is right for you as it is to help you realise if it isn’t.
The bfa also provides a national network of professional advisors to help prospects on their way. These are listed on the website.
The range of franchises available is endless; from animal boarding and automotive supplies and repairs to letting agencies, hotels, restaurants and fast food outlets and much more.
There are also a number of magazines that can help you, such as Business Franchise, the Franchise Magazine, What Franchise, Franchise World and whichfranchise.com.
For further information on franchising you can contact the bfa on 01235 820 470 or visit www.thebfa.org.