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The Franchise Company Presentation 100614

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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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The Franchise Company Presentation 100614

  1. 1. Introduction to Franchising for Franchisors
  2. 2. Seminar Presented By…  Stewart Booth  Mashud Choudhury
  3. 3. 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
  4. 4. 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.
  5. 5. 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
  6. 6. About The Franchise Company Areas 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)
  7. 7. About The Franchise Company The Team  Julie Waites  Ken Rostron  Stewart Booth  Mashud Choudhury
  8. 8. About The Franchise Company Clients 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
  9. 9. 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.
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. 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
  14. 14. What’s involved in franchising? The Steps 1. 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
  15. 15. 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 franchisees 5. Wide scale roll-out
  16. 16. 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
  17. 17. Franchisor Revenue Streams Illustration 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%
  18. 18. Franchisor Revenue Streams Illustration 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.
  19. 19. How to Proceed The 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
  20. 20. Franchising Seminar Q & A

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