Franchising 101: What is it, and why should you consider it for your future

Franchising has been around for decades, successfully spawning globally recognised brands while providing opportunities for a diverse range of people to run an established and well-known business for themselves.

What is franchising and why should you consider it?

Franchising is the the granting of a license by one person who has a successful and viable business (the franchisor) to another (the franchisee) which allows the franchisee to trade under the franchisor’s brand/trademark. It’s essentially a business partnership that allows you own and operate a business that has a proven model and an established name. Starting a business from the ground up can be long and lonely work. When joining a franchise, however, all that tough groundwork has already been implemented and expensive mistakes have already been made until all that is left is a polished system that has been tried, tested and ready for take off!

Investing in that brand and model also means you become a part of that company’s wider network, giving you access to other franchisees who are ready and willing to help. You should also receive continuous support from your franchisor, from thinking about becoming a franchisee, to launch day, to just needing a piece of advice down the line.

A sector showing record growth

The franchising industry is one synonymous with support and community, demonstrated in the 2018 bfa NatWest Franchise Survey, showing a 95% franchisee satisfaction rate.

With 48,600 franchised units in the UK up 10% since the last set of stats in 2015, and 60% turning over more than £250,000, people are seeing the benefits of owning a franchise unit, reflected in the fact that multi-unit ownership continues to rise (36%, up from 29% in 2015. These impressive figures are the reason that banks tend to look upon franchising investments favourably, willing to lend up to 70% of the initial investment.

Who are the bfa?

The British Franchise Association (bfa) in a not-for-profit organisation that defines and enforces the ethical standards for business format franchising in the UK. Established in 1977, the association is a self-regulatory body proudly run by its members to champion the growth of the UK franchising sector. Promoting best practice through education and training, the bfa is a passionate advocate of excellence in the whole franchising community. Members of the bfa have to adhere to a code of ethics and demonstrate they have a business model that works. Just because a company is not a member does not necessarily mean that are not working ethically, but that guarantee is not in place.

An inspiring story

Paul Wright and his wife Sally first considered franchising after wanting a more stable lifestyle. Having previous experience as a business owner, he understands the pain of being up against established brands and reduced bank lending:

“Sally and I had taken over her family bakery business but stiff competition from supermarkets was crippling the business financially as well as not providing a satisfactory life/work balance. In addition, we also ran a property development business which, due to reduced high street bank lending, was just becoming a huge financial risk. We wanted a change of lifestyle with security and the potential to earn good money. We approached a contact who paired up people to suitable franchises and he came up with InXpress.”

A family business

He now runs his InXpress franchises, a worldwide express parcel delivery and transportation service, with his wife Sally in Preston and Wrexham. Paul and Sally jumped at the chance to acquire the Wrexham franchise after seeing the steady success and stability that it brought, as well as the legacy it would leave for their two children.

He says: “After approximately five years of having the Preston franchise, and seeing it deliver everything we wanted it to, we had the opportunity to acquire a second franchise in the Wrexham area. Our son was now working for the business and enjoying it and we knew the franchise model worked so it was an easy decision. Having two franchises would further secure our financial future as well as having a larger overall business to, at some point, hand over to Jacob while providing an ongoing pension for Sally and I.”

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