With many aspiring business owners now exploring this new option, Jon White, managing director at InXpress, shares a helpful guide on how to get started and thrive in the world as a franchisee
It’s no secret that the franchise industry continues to be a big player in the UK.
You may very well still associate the word franchise with the USA, but in March last year, data showed that it contributes over £15bn to the economy over on this side of the pond, too – a huge increase of 46 per cent over the past decade – while well over 700,000 Brits are employed by franchisees, as well.
The question, however, is this. Is working with a franchisor becoming a safer bet than starting up your own business? Due to the ongoing impact of COVID-19, the answer is yes.
Further statistics released in April of this year by the Enterprise Investment Scheme Association showed that within 12 months, nine out of 10 growth businesses may disappear if urgent help is not delivered.
With that in mind, there are several reasons why working with a franchisor is now becoming the favoured option – not least because 97 per cent of UK franchises were operating at profitability last year.
The ability to work from anywhere is also appealing, as is the fact that you have the support of a big and experienced company behind you, which provides the necessary training and guidance as you progress.
All of that combined and it is no surprise that over the last four months, InXpress, a global shipping solutions franchise that was recently shortlisted for the 2020 Franchisor of the Year and International Superband awards by the British Franchise Association, has seen an 81 per cent increase in enquiries relating to starting up a franchise, during the pandemic.
There’s far more to it than just McDonald’s and Subway as well. Currently on the British Franchise Association’s ‘find a franchise’ directory, there are 260 different businesses operating as franchises right now and that’s just the website’s full members. It is thought that there are over 20,000 franchises in the UK right now.
With many aspiring business owners now exploring this new option instead, here’s a helpful guide on how to get started and thrive in the world as a franchisee.
Find a franchise that matches your passion
Do your research and work with a business that genuinely interests you. There are a lot of opportunities out there and it is important to find the best one for you.
There are also lots of online portals that help match up what the right franchise for you is. It pairs you up by digging into your skillset, your ambitions, and what you’re interested in.
There are several sectors to work within as well. Some that are thriving right now – even in the midst of COVID-19 – including fast food, senior care, home services, junk removal, commercial cleaning, and property management.
That aside, there are also retail, cafe, gym, education, maintenance, and restaurant options to consider.
Finally, you don’t even need to be from the industry that you’re going into. One of InXpress’ newest, and highly successful franchisees, used to be a professional poker player. He’s doing amazing.
Let’s talk money and your business plan
Firstly, it costs £35,000 to start a franchise with InXpress, but that price will differ depending on which business you want to work with.
That fee gives you access to the brand, its collateral, its training programmes, its support network, and its database.
The upfront fee, naturally, is the biggest deterrent. There’s also a monthly management fee – a percentage taken from any profit – that any aspiring franchisee would need to be aware of. That allows the franchise to keep running and keep growing the business.
Most franchisors, however, work with trusted lenders that will be able to assist you with that payment.
Secondly, you also need your working capital. There needs to be a clear business plan that clearly shows your living plan for an 18-month period. The likelihood is that you’re going to need the support of your family at the beginning of this new venture because getting to the stage where you are profitable can take time.
Some start making a profit really early, but there’s definitely a need to plan for that not happening. Our failure base is low, but it can take time to build up a customer base. You still need to be able to pay your mortgage during that time.
So long as you have a laptop and good WiFi, you’re all set
The biggest appeal of running an InXpress franchise is that you can do it from anywhere, so long as you have a WiFi connection.
This, however, is the case for most franchise opportunities out there.
You could quite literally work from your bedroom! We work with people that spend their days sitting on a beach working – some earning more money doing that than they had ever before.
Many start working from home and progress to working from an office. That applies to even some of the biggest franchisees in the world, including the founder of InXpress, John Thompson, who started this company from their bedroom in Rochdale.
In short, it’s very flexible. You work your own hours and fit it around your life.
Don’t skip the training
Franchisors all across the world hold some form of training to help franchisees get started.
Typically, there is a week of hard sales training and then a week of operational training. It helps you get clued up on the latest in marketing, finances and systems.
That training gives you the basics, like for example how many calls need to be made a day and how much time should be dedicated to ‘sacred selling time’ (time spent on the phone).
It gives the key principles of how to make it work and always say, if you follow the model, it won’t fail.
How to build your customer base
A lot of it comes down to spending time researching companies that would be relevant for the service your franchisor is providing. This can be done through platforms like LinkedIn, Facebook, eBay, Instagram, Twitter and even referrals.
It’s all about finding those SMEs that we can help. Consider yourself a consultant rather than a salesperson and asking how your franchise can add value to another’s business – especially right now during this pandemic.