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Get your free copySuccessful franchising is based on a number of principles, believes Jeff James, editor of What Franchise magazine. “These include strong branding, a proven system of operation, a commitment to innovation and a uniform service and customer experience,” he says. “These are essential elements of any business - whether it’s a franchise or not.
“The success rate of franchised businesses bears this out. Of the 44,000 franchisee-owned businesses operating in the UK, 97 per cent are profitable and over half turn over in excess of £250,000 annually.
“And we’re not just talking fast food outlets, which are closely associated with the franchise industry. These businesses operate in sectors as diverse as children’s entertainment and elderly care and commercial cleaning and financial services.
“This goes some way to proving that the practices used by brands that have grown via franchising can be used to good effect by independent business owners, some of whom may turn out to be the franchisors of the future.”
With that in mind, we take a look at some key points for owners of independent businesses to consider:
STRUCTURE
While independent business owners enjoy the flexibility of full autonomy, a franchise business model can boast some dependable factors when it comes to organisation and structure. For instance, franchisees have access to training and ongoing support, an established and recognisable brand, a tried and tested business model, marketing support and so on.
On the flip side, indie business owners aren’t bound by rules such as the products they sell and the hours they operate.
COSTS
Running an independent can sometimes prove precarious, with owners generally needing to front start-up costs and will need to fund and design their premises.
While buying into a franchise does require some hefty up-front fees to be paid, including the rights to use a brand’s trademark and name as well as marketing fees and so on, banks can sometimes find it more preferable to finance a franchise business because of the proven track record connected to a brand.
BRAND AND MARKETING
When a potential suitor is opening their franchise establishment they not only have the advantage of an immediately recognisable brand, but a ready-made customer base as well. This typically comes with the franchise rolling out national marketing activity, which will no doubt influence local residents to head to their premises.
Although there are a lot of advantages to running a recognised franchise-affiliated business, there can be some draw backs. For instance, one negative experience at another franchisee’s outlet could shape a consumer’s perception of the brand, and could potentially dissuade them from entering your premises.