• The Business Owner

Could you grow your business through franchising?

Chances are if you’re reading this article, you’re a business owner. You’ve probably spent years grafting, day in, day out building up your chicken/tyre/swimming lessons/gym/burger/accounting/delivery business. You know every square inch of your sector you’ve enjoyed the good times and you’ve ridden out storms; it would be fair to say your knowledge of your marketplace is second to none and frankly, you’d like to expand, maybe start laying down the path for your retirement, or simply stepping back so the business can carry on without you. But how?

Of course, you could go down the ‘regular’ route and simply employ more staff, lease more premises, buy more vans etc. The only problem with that method is that all the costs and responsibilities remain yours. Yes, your business could double in size but so will the administration and headaches. Twice as many staff to manage, twice as many buildings and vehicles to be maintained etc etc.

What if you could expand your business but let someone else share the load? Someone who is financially invested in making it a success and who will stick to the brand exactly the way you’ve developed it? Welcome to franchising.

What is franchising?

When you franchise your business, you are allowing someone to buy into the brand and reputation that you’ve spent years building up. They in return are self-employed, often with no experience in your sector, looking for your help and guidance in how to run their new business. They have the cash to invest and the hunger to build a sustainable business and you have the knowledge to help them do that. You know your business model works, you’ve proved that over many years, now you can share that knowledge with them and watch as they replicate your success across the UK…or further.

Important things you should know - The BFA (British Franchise Association)

Franchising in the UK is unregulated however, the BFA is the industry’s self-governing, ‘go to’ trade association. Their board, made up of experienced franchise professionals, lays down stringent financial and ethical standards that franchise operations must meet, before being accepted as members. Membership is not cheap or easy to obtain, so you can be assured that if you are looking at a BFA franchise, it will have been thoroughly checked and found to be worthy of membership. If you are looking to franchise your business, becoming a BFA member should be high on your list of priorities.

The BFA website www.thebfa.org is full of useful information for anyone interested in buying a franchise or franchising their business. Always use a BFA recommended solicitor for the legal work – franchise law is NOT the same as general law and you may come to rely on the strength of your franchise agreement in time. Make sure it is done right first time.

Jane Masih, head of franchising at specialist solicitors Owen White said,

‘Your franchise agreement should be a reflection of the way in which you want your network of franchisees to operate, in your particular business system. This is a situation where one size definitely doesn’t fit all – but sadly some franchisors only discover that their agreement doesn’t protect their business, when it is too late. We have drafted numerous franchise agreements for a wide variety of businesses operating in different sectors. Taking the time to discuss your franchise plans with experienced franchise lawyers at the outset, will provide not only a strong legal framework, but access to years of experience of dealing with the issues that every new franchise system faces.’

BFA NatWest Survey

Every year the BFA runs a survey of the previous year of franchising in the UK, in conjunction with NatWest (banks are historically happy to lend money to finance the purchase of a franchise as they see them as low-risk investments) the most recent survey, 2018, turned out these headline figures. You can request a copy of the full report here: https://www.thebfa.org/about-us/industry-research/

  • Franchising contributes £17.2 billion per annum to UK GDP, employing 710,000 people, with 93% of franchisees claiming profitability and less than 1% of franchisors closing per year due to commercial failure.

  • There are now 48,600 franchise units in the United Kingdom, a rise of 10% from 2015.

  • There are also 935 business format franchise systems, around double of what there were 20 years ago.

  • Franchising is ahead of the wider business world when it comes to women owning and running their own business. 30% of all franchisees are women.

  • Currently, 18% of all franchisees are under the age of 30, a significant rise from the previous survey in 2015. More young people than ever are becoming franchisees.

  • Franchisees are increasingly choosing to own more than one franchise unit, sometimes with the same brand and other times with separate franchise systems. 36% of franchisees now run multiple units, a rise of 7% from the previous franchise survey.

How do I franchise my business?

There are various ways to go about franchising your business. Many people employ the services of a franchise consultant who will guide you through the process. This is not a cheap process but needs to be viewed against the cost of purchasing new premises/staff/vehicles.

There is another way, being pioneered by franchising entrepreneur Darren Taylor, owner of Taylor Made Franchising.

Taylor (43) bought his first franchise territory, Stumpbusters in 2006, going on to buy a couple of neighbouring territories very quickly and not long afterwards, the entire franchise.

Following that initial purchase and with the franchising bit well and truly between his teeth, Taylor purchased four more franchise operations over the following 15 years, Stumpbusters, PVC Vendo, Wilkins Chimney Sweep, Thomas Cleaning Franchise and most recently, Iconic Window Cleaning. He has also sold a Stumpbusters Master Franchise which operates in the Netherlands. The UK based businesses are all part of Taylor Made Franchising, which have an annual network turnover of £7.6m a year.

The Deal

Such is his belief in the franchising system that Taylor is now offering owners of small businesses a strategic partnership deal. In return for a small percentage of the company, Taylor will bring the company into the Taylor Made Franchising brand and use his many years of experience and that of his head office team, to franchise the company. As the owner of five successful franchise operations, Taylor knows a thing or two about how to run a business and sees this new format as a simplified way forward for many business owners who wish to franchise.

Taylor has recently signed contracts with Andy Hiscock from Iconic Window Cleaning, which will act as a test pilot for the new system.

Hiscock said,

‘By going directly to Darren, I am short cutting the franchising process and putting an expert directly in my business. His knowledge of the franchise sector is second to none and he has an experienced management team in place ready to help. Also, as a co-owner of the business, I know he is going to do his very best to develop it into a successful franchise operation. I am really excited for the future and know the sky’s the limit with Darren’s help.’

Taylor responded,

‘This is a new and exciting opportunity for everyone involved and my team here at Taylor Made Franchising are raring to go. Between us, we have many years of experience of the franchise sector, which we are looking forward to sharing with Andy. Iconic Window Cleaning is the perfect example of a business ready to franchise, Andy built it from the ground up, he knows his product and service inside out and now he’s ready to expand and, with our help, 2021 is going to be a great year for him. We would welcome enquiries from any other would-be franchisors to help them on their way to franchising success.’

For more information on franchising, take a look at www.taylormadefranchising.co.uk.