The franchising industry creates over £15 billion annual turnover. Businesses have the ability to make a lot of money by starting a franchise. No matter what size your business is, franchising could be an option for you.
There are multiple reasons why people choose to buy a franchise instead of starting their own business. Recognised branding, comprehensive training and long-term support are just a few of the reasons why franchises are a worthwhile investment. With 97% of franchising units being profitable, franchising continues to be an accomplishment for both the franchise owners and franchisees. Still, it’s understandable that the option of franchising is something many business owners shy away from, so let’s look into the key questions surrounding this move.
Why start a franchise?
The initial thought of franchising can seem daunting. If you already have a successful business, why bother to franchise that business, spending more money and risking failure in the process?
While it is a risk, the long-term benefits of a franchise are overwhelming. The British Franchise association highlights the fact that your brand benefits from capital investment of the franchises and, once your franchise is set up, it has the opportunity to expand. Rather than investing in more staff and locations for yourself, giving somebody else control is better in the long run.
One of the main components you’ll need to start your franchise — and for it to succeed — is passion and determination. If you truly want your business and franchise to flourish, you’ll need an inner drive and motivation. My passion for the industry and the desire to see others achieve their goals is what lead me to create my lawn care franchise.
Money and financial planning are imperative when creating your franchising strategy. Some of the costs (such as training and equipment) will be covered in the upfront fee paid by the franchisee. However, you need money beforehand to get it going. The upfront fee needs to be worth the value of your business and the investment. A small business doesn’t have the same branding power as Subway or Hilton Hotels, but the cost of your franchise could be what compels people looking to invest.
Creating that compelling aspect and giving people something unique is essential. Franchising is a competitive market and you need to do some thorough competitor analysis in order to stand out from the crowd. Try targeting a different market or creating a slightly different product to the other franchises you see. What does your franchise offer that others don’t? What is going to make you stand out against them?
Can small and medium businesses compete?
Small businesses often face challenges that big businesses don’t. Less money means less marketing, so finding the right audience can be more difficult. For this reason, one of the most important aspects of starting a franchise is making sure your business is already established and financially stable.
The truth is that small and medium businesses can compete. Franchising works for so many businesses because it’s an excellent way to expand the brand and give entrepreneurs the opportunity to be supported through their business venture. If you have the desire for your business to expand and help people develop their own careers, franchising can definitely work for your business, no matter its size.
Often, the more personable approach can be the most effective. Franchises such as Burger King carry heavy branding which is attractive, but a small business carries personality, which a lot of people value. Small businesses can often charge a lower upfront fee, which is more affordable for many people looking to buy a franchise.
Above all, the most important thing is to get your brand and franchise out there, in front of the public eye. If you do this and have the passion and motivation to maintain your efforts, franchising really can work for your business.
Terence Nicholson, pictured above, is the owner of Lawnscience, providing lawn care services throughout the UK.