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Franchise your business

Franchising is a tried and tested business growth strategy that has enabled many entrepreneurs to build wide-scale business networks. Learn how The Franchise Company can help your business expand.

Why Franchise your Business?

Franchising represents a huge and growing sector in the UK economy worth over £16 billion. There are over 900 franchise opportunities available in the UK alone, employing over 600,000 people. A proven franchise massively reduces the risk of business failure with less than 3% of franchisees failing and over 90% profitable.

Franchisees of good franchise systems also receive extensive support from the banks who all have specialist franchise units designed to provide finance to franchisees.

(Source: Nat West/British Franchise Association survey).

The Benefits of Franchising

Franchising is a tried and tested business growth strategy that has enabled many entrepreneurs to build wide-scale business networks. There are many benefits to franchising, including:

  • The business can expand with less capital (and therefore more quickly) than with the traditional route of company-owned expansion, since the start-up costs of opening in each new area are met by the franchisees.
  • Franchised units generally perform better than company-owned units, due to committed franchisees.
  • Franchise units that are are less troublesome to manage, due to the vested interest of the franchisee.
  • Franchisors can exercise a higher degree of control through the Franchise Agreement.
  • The day-to-day running of the individual franchise units is the responsibility of the franchisees.
  • The resources needed to build and support a franchise operation are generally less than a company-managed network.

Services for New Franchisors

Established in 1991

We've supported over 200 businesses to become successful franchises

We help businesses expand by franchising and our focus is on clear, concise and practical advice that is based on actual day to day franchise experience. Our approach is designed to share our experience and knowledge of franchising with our clients and combine it with their experience and knowledge of running the business in their individual market sectors to develop the franchise model that’s right for them with the highest possible chance of success in the market.

Our project approach is flexible and projects are structured and carried out in line with our client’s needs. Either we can carry out the bulk of the franchise development work required or we can work as project managers to “add value” to development work that is carried out internally.

Our range of services for new franchisors includes:

  • Franchise feasibility studies
  • Franchise package development
  • Developing business plans
  • Franchise fee structures and financial models
  • Franchisee profiling
  • Franchise territory analysis
  • Producing franchise agreements
  • Producing franchise operating manuals
  • Developing franchisee training and support programmes
  • Trade mark registration
  • Franchisee recruitment (support in-house or via our outsourced recruitment service)
  • Setting up and running pilot operations
  • Franchise network management
  • International franchising
  • Franchise seminars and training for the franchise team explaining how franchising works and developing internal skills in franchising

The Franchise Development Process

The chart below illustrates the normal process that a business will go through when developing a franchise model. Our service list above covers all of the work required to support a business through this development process:

The Stages of Franchise Development

Prove

  • Develop the business model and prove overall viability in one or more areas

Design the Franchise Model

  • Design the franchise model
  • Confirm feasibility
  • Produce franchisee and franchisor financial models
  • Fee Structures
  • Territory Analysis

Produce Documentation

  • Franchise Prospectus
  • Operations Manual
  • Franchise Agreement
  • Franchise marketing strategy and materials
  • Franchise recruitment, training and support systems

Pilot the Franchise

  • Pilot the franchise model in 1-3 areas
  • On-going monitoring and review
  • Feedback loop to improve systems

Expand

  • Accelerate Rollout
  • Provide on-going support to existing franchisees
  • Ongoing development and innovation

What's next?

If you’ve got a business that you’re thinking about franchising then simply get in touch for an initial discussion. Once we know a bit more about you and your business we can give you some initial guidance and advice about how to proceed. We look forward to hearing from you.

Further Information for New Franchisors

Considerations for Franchising

When thinking about franchising, there are a number of issues to consider:

  • Is the model that you are thinking about franchising proven?
  • Has the business model operated successfully for a period of time (normally a minimum of twelve months).
  • Is there demand for the products/services in other geographical areas?
  • Could the business work successfully in different areas and locations?
  • Can the necessary day to day operating skill be easily taught?

Is the business producing attractive profits and a reasonable return on investment?

For more infomation about Considerations for Franchising, contact us today

Potential Rewards

Franchisors usually generate revenue from their franchise operations in the following ways: Franchise Package Fee:

A one-off, up-front fee paid by franchisees for the initial products and services provided by the franchisor to enable them to set up and begin trading.

  • License Fee: A one-off, up-front fee paid by franchisees for the rights granted under the franchise agreement
  • Franchise Management Fees: On-going fees paid by franchisees, either an agreed fixed monthly fee or, more commonly, a % of their monthly turnover (typically 5-15%)
  • On-going sale of products and/or services to franchisees

In addition, franchising normally significantly increases the capital value of a business and some franchised businesses have sold recently for very significant capital amounts - much greater than could have ever been achieved from company owned expansion.

For more infomation about Potential Rewards, contact us today

Timescales

Various factors will influence how quickly we could prepare you to launch your franchise operation and it is impossible to give a precise prediction of this here. As a guide you could be ready to begin seeking the pilot franchisees 3-4 months from the commencement of the project.

For more infomation about Timescales, contact us today

Costs Involved

The precise investment required from you in order to franchise your business depends on a number of factors including the complexity of your business model. We will be able to give you a Project Proposal and an itemised breakdown of the costs once we’ve discussed this fully with you and obtained a detailed brief. Here’s a guide:

Consultancy Fees

Stage 1: Designing the model: £5000 - £8,000 + VAT

Stage 2: Franchise documentation: £5,000 - £8,000 + VAT

Stage 3: Piloting and ongoing depends on our input but fees can be linked to franchisee recruitment

Other Costs

Legal fee franchise agreement: £3,000 - £5,000 + VAT

Franchise prospectus: £500 - £1,000 + VAT

UK trade mark registration: £200 - £800 + VAT

Franchise recruitment launch budget - TBD

For more infomation about Costs Involved, contact us today

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