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The Franchise Company have a great team of experienced BFA Affiliated franchise consultants who have been providing sound and effective franchise advice since 1991. We have been working to British Franchise Association best practice for over 20 years. And as our clients will tell you, its the best way to ensure long term success in franchising. If you are thinking about franchising your business or you need advice with managing your existing franchise business more profitably, call us now. The Franchise Company can also help with franchise recruitment and franchise operating manuals. Contact us now to arrange a free initial franchise consultation. Call us on 0207 000 1018
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About This Seminar
Who are The Franchise Company? What franchising is and isn’t What types of businesses can be franchised? Benefits What’s involved? Potential income streams How to proceed Q & A
About The Franchise Company
What We Do
Management consultants specialising in franchising We enable businesses to grow by helping them
develop and build ethical and commercially viable, domestic and international franchise operations.
We work with clients and in their businesses, not just for them.
About The Franchise Company Established 1991 Became BFA member 1993 Head office Darlington Offices in London and Turkey Experts in franchising and licensing UK and International experience Well connected Consultants experienced as advisors, franchisors and
franchisees
About The Franchise CompanyAreas of Expertise ‘Business format’ franchising Licensing Franchise system development Operations manuals, training programmes Franchise agreements Franchisee recruitment Network management and support Social franchising International franchising/licensing Conversion franchising (employed to franchised)
About The Franchise CompanyThe Team
Julie Waites Ken Rostron Stewart Booth Mashud Choudhury
About The Franchise CompanyClients include… Pruhealth (Prudential Insurance Group) Rangers Football Club Tiffinbites Palletways British Airways Spiral Cellars Ovenu CHIPS Motivation & Co Nova International Middlesbrough Football Club Johnsons Dry Cleaners
What is Franchising?
A Definition A ‘business format’ franchise is where the business’
originator (franchisor) has developed a successful business model (format) and then sells the rights to third parties (franchisees) to operate that business model in other locations/areas.
What is Franchising?Key Features Granting of rights (e.g. voting, operate trains, broadcasting) ‘Business format’ franchise Business is proven Profitable Replicable Market is stable or growing ‘Trade secrets’, special know-how, intellectual property, sales
& marketing expertise. Core business is financially healthy Owners/personnel are suited to franchising
What is Franchising?Key Features cont… Positive reasons for franchising Symbiotic relationship Rights granted to franchisees to use name, brand, IP Transfer of skills and know-how to franchisees Payment of up-front and ongoing fees Ongoing support Designated franchise territories
What Businesses Can be Franchised?
Examples Accounting/book-keeping (e.g. Cloud Book-keeping) Computer repairs/consultancy (e.g. PC Pal) Training Furniture repairs Mobile tyre replacement Mobile coffee shops Children’s entertainment Sports coaching Gymnasiums/fitness Horse transport Horse photography Business cost reduction Lawn treatment
Benefits of Franchising Lower capital investment by franchisor, therefore… Quicker expansion Franchisees are more committed/motivated, therefore… Better performance Higher degree of control over franchisees’ activities,
therefore… Greater quality control Day-to-day running of franchised businesses is franchisees’
responsibility, therefore… Head office and support resources usually lower, therefore… Higher return on investment
What’s involved in franchising?
The Steps1. Prove business model
Financially Operationally
2. Develop franchise system Franchise package Training and support Franchisee financial modelling Franchise fee structure Territory analysis Franchisor business plan
What’s involved in franchising?
The Steps cont…3. Develop franchising documentation
Operating manual Franchise agreement Franchise prospectus Recruitment documentation Bank and BFA briefing information
4. Recruit pilot franchisees5. Wide scale roll-out
Franchisor Revenue Streams Franchise Package Fee (typically £10,000 - £20,000)
Recovers franchisor’s costs in helping a franchisee set up and start trading
May include small profit element License Fee (typically £2,500 - £10,000)
For rights granted Usually waived for pilot franchises
Management Services Fee (typically 5 - 12% of franchisee’s gross monthly sales or fixed monthly amount).
Sale of products/services to franchisees Can combine all of the above
Franchisor Revenue StreamsIllustration 1
Franchise network established 10 years 80 franchisees Average franchisee turnover £100,000 Franchise Package Fee: £20,000 License Fee: £5,000 MSF: 10% Margin on products sold to franchisees: 10%
Franchisor Revenue StreamsIllustration 1 cont…
Franchisor Income Franchise Package Fees: £1.6m License Fees: £400,000 MSF: £800,000 p.a. Margin on products sold to franchisees: £800,000 p.a.
How to ProceedThe Franchise Company’s Process Exploratory meeting/telecon Brief obtained Project proposal, sets out…
Project objectives Programme of work Time scales Costs & TOB
Contract signed Project plan prepared Project delivered
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