Franchise Your Business

Introduction

Franchising your business is the process of expanding your business as part of a franchise model. In a franchised business, the business owner (the franchisor) grants their franchisees permission to use their established brand, and work under it to run their own branch of the business. Franchisees will then pay the franchisor to use their brand and run their franchise unit largely independently. Franchisors offer support, branding, marketing and operations guidance to franchisees, who then oversee the day-to-day running of the business.

Franchising can be an incredibly profitable form of growth, as it doesn’t require the same level of capital as company-owned expansion, and so can be a much quicker process.

With over 25 years of experience helping organisations move into a franchise model, we are the best choice for a business looking to grow and expand their operations through franchising. Read on to learn how The Franchise Company can help your business expand.Why Franchise your Business?

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How to Franchise Your Business

Watch our video on successful approaches to converting your business into a successful franchise model.

In addition, learn about:

The growing UK franchising sector
The range of franchising opportunities available across the UK
How The Franchise Company can help you to expand into a franchising model

Have more questions?

Get in touch

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.

Franchising your business allows you to grow your business more quickly than with traditional, company-owned expansion, and is also significantly cheaper than company-owned expansion. Franchising your business allows you to have independence from the day to day running of your business, and focus on the bigger picture, while supporting and collaborating with your network of franchisees to create a successful and valuable business.

By creating a network of trusted franchisees, you can also feel confident that your business is supported by motivated, invested individuals who are passionate enough about your company to invest in, and work as part of it every day. A strong, motivated network of franchisees can also offer ideas and opportunities for growth and success, as well as creating a supportive community that builds a strong sense of brand loyalty.

Franchising your business is an opportunity to expand your business and create a profitable company across a network of motivated franchisees. Using a franchise model, your business can expand and have great success within a model with fantastic potential for profit and growth.

_{(Source: Nat West/British Franchise Association survey)}

The UK has over 900 franchise opportunities, employing over 600,000 people.

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:

Expansion

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.

Performance

Franchised units generally perform better than company-owned units, due to committed franchisees.

Management

Franchise units that are are less troublesome to manage, due to the vested interest of the franchisee.

Business Control

Franchisors can exercise a higher degree of control through the Franchise Agreement.

Operations

The day-to-day running of the individual franchise units is the responsibility of the franchisees.

Resources

The resources needed to build and support a franchise operation are generally less than a company-managed network.

The Wooden Floor Store Franchise has been an exciting and successful venture for us and we have secured five franchisees in our first year, with plans to build on that going forward. The Franchise Company has provided vital guidance and expertise to help us develop our retail concept into a viable and exciting franchise opportunity.

I would highly recommend them as a valuable partner on the franchise journey."

Richard Snape & Ross Nicholl

The Wooden Floor Store

Services for New Franchisors

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.

As an experienced franchise consultancy business, we have seen over 200 companies through the process of moving into a franchise model. We have over 25 years of experience, and understand the franchising process inside and out. Each of our franchise consultants will work with your from the very start to the very end of your process with us, to ensure the process is smooth and fits your business perfectly. We create bespoke plans and documents for our clients, based on an in-depth understanding of their business and values as a company, to ensure you have a franchise model that works for you.

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. All of our consultants have spent time working within a franchising or franchised company before moving into franchise consultancy. As a team of industry experts, we understand both sides of the franchising process, and so are perfectly positioned to advise you throughout the franchise process, no matter the service or level of support you require.

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

With our wide range of expertise and services, as well as our highly qualified team of franchise consultants, The Franchise Company are passionate about helping companies move into a franchise model successfully, getting them fantastic results for their business building strong relationships with their franchisees.

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

Franchise Your Business FAQs

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?

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.

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.

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

This page was written by:

The Franchise Company Team

With over 90 years of combined experience within the Franchising sector, we’re a specialist franchise consultancy firm affiliated to The British Franchise Association.

Introduction

Table of Contents

How to Franchise Your Business

Why Franchise Your Business?