What is a Franchise?
A business format franchise, as described by the BFA (British Franchise Association) is,
‘…… the granting of a licence by one person (the franchisor) to another (the franchisee), which entitles the franchisee to trade under the trade mark/trade name of the franchisor and to make use of an entire package, comprising all the elements necessary to establish a previously untrained person in the business and to run it with continual assistance on a predetermined basis.’
According to the BFA Natwest Franchise Survey 2018, there are over 1,000 franchise systems operating in the UK, which the survey categorises under the following broad categories:
- Hotel and Catering
- Store Retailing
- Personal Services
- Property Services
- Transport & Vehicle Services
- Business Communication Services
A multitude of sectors fall under each of these categories – in short the choice is vast!
What is a Management Franchise?
A management franchise involves the owner managing the operation of the business whilst relying on his or her employees to carry out the work required to deliver the required service. Typically a management franchise system will operate in business to business (B2B) environments.
What type of franchise is Minster Cleaning?
There are two main types of franchise:
- Business to business (B2B) franchise (e.g. a commercial cleaning franchise) or
- Business to consumer (B2C) franchise (e.g. a fast food outlet)
Minster Cleaning is a management franchise which operates in the business to business commercial cleaning sector. Current Minster Cleaning franchise partners manage large work forces, often comprising hundreds of carefully recruited employees, to ensure a consistently high quality cleaning service is delivered to all clients. All our franchise partners have very strong management skills and experience and are from diverse backgrounds which include retail, banking and the armed forces.
What qualities do I need to be a franchisee?
Management / leadership qualities and experience are far more relevant to running a management franchise than sector experience, as people management will account for a large amount of time the owner spends in the business.
How much can I invest and what level of return am I looking for?
Understand how much of your own money you would be prepared to invest and how much you would be prepared / able to borrow. Management franchise opportunity costs can vary widely, typically with higher investment level opportunities offering the potential for higher levels of return. Be sure to weigh up the level of investment against any anticipated short, medium and long term returns. The returns need to meet your lifestyle requirements / expectations.
How do I know what sort of business I would be good at running?
Consider types of businesses where your employment experience and skills set could be of real benefit. For example, key skills required for running a management franchise such as Minster Cleaning would be leadership and people management skills and the ability to communicate effectively with office / field based employees, clients, prospective clients, suppliers, fellow franchise partners and the franchisor.
Would you prefer a long established, stable sector or a developing sector? Similarly are you attracted to more well-known established brand names or newer, emerging brands?
The internet is an invaluable tool for researching different markets where you can access market research documents and visit organisational bodies for key information such as market size, growth potential, levels of competition, key influences and trends.
Be sure to visit the website of the British Franchise Association (bfa) – www.thebfa.org. The website provides a wealth of information on franchising in general plus profiles of all its members.
Once you have decided on an industry or industries in which you would like to operate and shortlisted your preferred franchise options, you will need to invest a significant amount of time researching each one. How well known is the brand name and what is its reputation?
What are the potential returns on your investment? What initial and ongoing support and training does the franchisor offer? What would be a typical ‘day in the life’ for you in the business? How has the network grown? Have any businesses failed within the network? If so, what are the reasons for this?
What is the difference between a resale opportunity and a greenfield opportunity?
A resale is the purchase of an existing franchise. A resale brings with it the comforts of an established track record, client base and income stream, albeit at a premium as you will be paying the purchase price for the business in addition to an initial licence fee.
A greenfield (or a start-up site) is a branch that you set up from scratch. You have the help and support of the Franchisor, but the branch is set up from the start.
Who do I direct my questions to?
It is really important that you spend time speaking with the franchisor including, ideally, key members of the support team across various business disciplines such as marketing, operations, finance and IT. Equally when assessing any franchise opportunity, speaking with current franchisees is highly recommended. We encourage prospective franchise partners to speak with any of our current management franchise partners and as many as they wish.