April 2009 Archives

Prontaprint Ltd, Wiltshire Farm Foods, Pirtek UK, Signs Express, Driver Hire, TaxAssist Accountants, Apollo Blinds, Countrywide Ground Maintenance and Snap-on Tools have all been announced as finalist for the British Franchise Association 'Franchisor of the Year' awards sponsored by Express Newspapers and HSBC. The winner will be announced at a special dinner being held on 18th June at the East Midlands Conference Centre.

Susan Boyle's moving performance on Britain's Got Talent reminds us that we should not judge a book by its cover. You have to read the whole things or at least a good portion to really understand what it is all about. The same rule applies when evaluating a franchise business. Specifically:

1. Keep an open mind
Just because you may be familiar with a company, do not assume that you can simply tell from the product or service what your income, role, or lifestyle will be like. Thus it is critical to focus on the business model, not the widget.

2. Keep your emotions in check
Emotions -- good and bad -- can get in the way of objectivity. Thus, if necessary, pretend like you are a reporter trying to gather as much information as possible about a particular franchise company.

3. Keep the main thing the main thing
Information gathered should be trying to answer four key questions:
a) Does the business model work?
b) Do you want to execute the business model?
c) Will this model take you to your goals and dreams?
d) In other words, is this an owner's role you will enjoy in the long-term?

By trying to answer these questions through a process of mutual due diligence rather than getting bogged down in the minutia of the details, franchisee candidates are better able to stay focus on what is really important -- finding and investing in a franchise business to help create their desired future.

Lately when I review my weekly copy of The Economist, I am reminded of the fact that we are in "the eye of a storm." Major corporates have failed and others are barely holding on. Furthermore, while governments across the globe are working frantically to shore up the markets, things are far from being stabilised. To some degree we can blame the media for revelling in the story and talking up the notion of a crash or worse yet a major depression.

This has trickled down to would be entrepreneurs - either those starting up from scratch or getting into business via a franchise. And as I've seen in my own practice, this has caused some to sit on the sidelines. Others are swimming against the tide and doing all they can to pull themselves and the globe at large out of this cycle. Particularly as despite the challenges, having done their homework in regards to the market opportunity, they feel compelled to move forward and make things happen.

This makes me think about the famous "Citizenship in a Republic" speech given by former American President Theodore Roosevelt at the Sorbonne, Paris, 23 April 1910. A memorable quote from that speech reads:

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat."

Thus as I work with potential franchisees, I am honing in; looking for clues to determine - who amongst the many - will get in the arena. Truthfully, it is not always easy to tell. Sometimes even the most compliant franchisee candidates become overwhelmed with fear and walk away. Others surprise me and charge forth like raging bulls because they understand that while some large companies have failed, there are many other businesses out there thriving. In fact, some industries within the franchising sector could be considered recession resistant. Therefore with proper research and validation, the returns sufficiently justify taking the risk. Particularly as the British Franchise Association recently pointed out: "It's not a matter of pretending that the market conditions aren't tough, because they are, but the inherent strengths of franchising lets it stand out from the crowd."

Last month, I attended the CREATE your Future Conference organised by Women Unlimited. The event was focused on providing inspiration as well as practical knowledge and skills that women business owners could use straight away in business and life.

One of the entrepreneurs that presented was Julie Meyer CEO of Ariadne Capital. I was really looking forward to her speech as I'd watched a video interview she'd given at cmypitch.com and was curious to learn more about the woman who a decade ago co-founded networking group First Tuesday which was sold in 2000 for £33 million.

Julie didn't disappoint. She talked about how men and women are built differently and as such approach business differently. She pointed out that:

• Women learn a lot by sharing.
• We know a lot more than we think we do.
• We want to build each other up.
• We don't want to take credit for other people's work; just our own.
• We understand our role in the community/eco-system.

These traits give us a great advantage. Thus, women should worry less about breaking through glass ceilings and build our cathedral. That's why she created Arianne Capital - to create her own rules of engagement and more importantly spread her wings. In regards to what makes a winner, Julie points out that:

• They feel like one before they are one
• They expect success
• They focus on their unique contribution to the world
• They build long-term relationships with people
• They look for their unfair advantage
• They don't treat the losers like losers

With that, the critical success factors include:

1. Be as Unreasonable About Success as an Entrepreneur: Entrepreneurs have a view of the market and/or a consumer behaviour, which drives them to bring an innovation to life.
2. Acknowledging that You Know More Than You Think You Do: Don't just trust your instincts but listen, hone and refine your instincts.
3. Invest in the success of others: Focus on being a net contributor to the system rather than a net taker, and what you find is that your sphere of influence over the system increases.
4. Be Radically Open To The World: Build reliable means to continually pull in what's relevant and potentially threatening to your business.
5. Exact Accountability: The best entrepreneurs and executives are both leaders and good managers.
6. Create the Conditions of Trust so that Great Things can Happen.

With this sort of mindset, no wonder Julie's business which has equity stakes in 24+ high-growth private companies continues to go from strength to strength. Should also mention that she is one of the entrepreneur investors in a new online version of BBC's Dragon's Den.

For anyone considering franchise business ownership, would recommend if possible, attending a franchise exhibition. Particularly as they provide the opportunity to meet representatives from a wide variety of brands all in one day. Also, there is the added bonus of attending seminars and presentations which provide franchisee candidates with practical advice and information on all aspects of setting up a franchise business.

Heck, even franchise consultants like myself, find value in attending these events as not only are they a great lead source, but they provide the opportunity to network and get better acquainted with the ever growing list of franchise brands. Thus, was really pleased that the company I'm aligned with had a booth at last month's British & International Franchise Exhibition. Particularly as the event was well organised and marketed by the British Franchise Association.

Upcoming events on the UK & Ireland calendar include:

2nd Quarter 2009

9 May: South Coast Franchise Show, St Mary's Stadium, Southampton FC

21 May: Sussex Franchise & Business Start-up Show, Brighton

28 - 29 May: Business Startup Excel, London

5 - 6 June: Scottish Franchise Showcase, SECC, Glasgow

11 June: Anglian Franchise & Business Start-up Show, Newmarket

20 June: East Midlands Franchise Show, Leicester Racecourse

24 June: Wales Franchise And Business Start-up Show, Cardiff

3rd Quarter 2009

10 - 11 September: Thames Valley Franchise Show, Madejski Stadium Reading

4th Quarter 2009

2 -3 October: National Franchise Exhibition, NEC, Birmingham

November: MK Franchise Show, Stadium MK, Milton Keynes

20 - 21 November: Irish Franchise Exhibition, Dublin

1st Quarter 2010

29 - 30 January: The British Franchise Exhibition, Manchester

12 - 13 February: The Franchise Show, London

19 - 20 March: British & International Franchise Exhibition, London

Property Services may account for nearly a quarter of all franchise systems, however, Hotel & Catering franchise systems have the largest number of units/franchisees.

From the 2008 NatWest/BFA Franchise Survey, here are how things break down by industry:

• Hotels & Catering: 8,100
• Store Retailing: 5,100
• Personal Services: 5,900
• Property Sevices: 6,650
• Transportation & Vehicle Services:2,925
• Business & Commercial Services: 5,525

All total there are 34,200 franchisees/units, the highest number since tracking began in 1984. This represents a 8% growth over the previous year.

Without fail, whenever I tell a franchisee candidate that they are over 800 franchise brands in the United Kingdom generating £12.8 Billion in revenue each year, they are surprised. Most are familiar with the fast food franchises, but few can think of many beyond this sector.

From the 2008 NatWest/BFA Franchise Survey, here are how things break down by industry:

• Hotels & Catering: 115
• Store Retailing: 101
• Personal Services: 159
• Property Sevices: 202
• Transportation & Vehicle Services:73
• Business & Commercial Services: 156

Surprisingly property services is the largest sector, accounting for nearly a quarter of the franchise brands. Much of this growth was due to the property boom -- however as the property market has cooled somewhat, it will be interesting to see how things develop in the years to come.