With UK turnover from franchise networks achieving £13.4 billion and an overall failure rate still under 4%, the franchise community has a lot to be happy about. In this article, Adrian Price considers the advantages of growing your business through franchising.
Let’s start with the statistics. The 2012 NatWest/BFA franchise survey shows the franchise sector is doing pretty well1. Turnover in the sector is now in excess of £13.4 billion, an increase of 4% with over 40,100 franchising units employing 594,000 people. So, why consider franchising?
What is franchising?
Franchising is a method of expansion for an established and successful business looking to grow a network. It can also help businesses to expand both nationally or internationally, strengthen the brand and reach of a company and act as a good method of securing its future, but only if it is done well.
As a business owner you have already developed a proven system, faced the challenges of starting the business and created and refined the strategies and procedures responsible for its success. You also know how to market your business, who to hire and how to train employees.
Should You Franchise Your Business?
So, when considering franchising your business, you first need to gain a full understanding of the advantages and disadvantages, the financial aspects of the relationships between the franchisor/franchisee and how this will impact on your current business operations.
How To Make Your Franchise Successful
Once you have this understanding, you then need to ensure that your business has certain key elements in order to make it successful. These include:
- A clearly defined trading name, brand and system.
- A format which is proven, successful and which can be easily duplicated.
- Profit to support the franchisor and franchisees.
- The ability to adapt to a culture in which roles and responsibilities are clearly defined.
Ask yourself is your business successful and profitable with an established client base? Can you show that your business can be replicated? Do you have scope to open additional outlets or offices around the country?