Franchising is a proven method of lowering the risk of going into business for yourself. It’s lower risk, you have ongoing support, your new business is tried and tested, and usually there’s a guarantee that nobody else can set up the same business within a certain distance. There are hundreds of businesses who have used the franchise model as a way of growing their company both nationally and internationally but such a huge choice of businesses can be baffling – where do you start? There’s a lot to think about, but here are some of the franchise businesses which are currently hitting the headlines and some advantages and disadvantages of each.
Founded in the USA in 1965, the Subway sandwich bar chain now has over 44,000 branches worldwide and is officially the world’s fast food chain with the most branches. Operating in 93 countries, the brand has ambitious plans for expansion, with aims to double their operations by the end of the decade. The Subway business model is most definitely tried and tested, but raises a few issues for the potential franchisor. Have all the prime sites for new Subway stores been snapped up already? How protected is my business if tastes change, the economy slumps and people stop buying sandwiches at lunch? And with a company growing so quickly and taking on so many new franchisees, just how much ongoing support can I expect to receive?
Although second to Subway in terms of the number of outlets, there’s no arguing that McDonald’s is the world’s best known fast food brand. Buying a McDonald’s franchise can be expensive, as franchisees help to fund the brand’s extensive marketing and promotional activities. There is also the same issue with Subway in that the brand is well-established in most countries and the most lucrative sites will have been taken already. There is also growing awareness of nutrition and problems caused by obesity – is the tide turning against fast food outlets?
One of the ways in which Homeclean differs from many of the other opportunities open to franchisors is that it is at a totally different stage in its development. Although the business model is proven and lucrative in the UK home market, expansion to other parts of the world is at a very early stage. That position provides the exciting opportunity not only to take a franchise, but also to get more involved in the company as a Master Franchisor with complete responsibility for a given country or region. Wouldn’t it be exciting to be in at the start of a company’s growth and to be responsible for selecting your own network of country franchisees to grow and develop the Homeclean business? Take a proven business model and roll it out into your local market, with the potential for very high yearly earnings. This is the sort of opportunity which doesn’t come along every day.
If you haven’t got children, you may not be aware of Kumon, but this is an educational franchise opportunity which tutors children of school age in English and Maths, using materials and methods supplied by the parent company. Although successful in some areas, not all towns or regions will have a large enough pool of potential students to enable franchisees to make a success of a Kumon franchise. Franchisees must be educated to degree level, and most have a background in teaching. Franchisees also take the responsibility for finding a location for their centre, which may not always be straightforward.
Mobile phone ownership in the UK stands at over 90% of the population, so buying into a franchise which sells mobile phones might at first seem like a no-brainer. There’s certainly no implication that we’re going to stop buying mobile phones any time soon, but is the way we’re shopping changing? There’s definitely an increasing move to online retailing, and with consumers confident about searching out the best deals and researching handsets, there’s perhaps less need than ever for a traditional bricks and mortar mobile phone shop.
Budget Rent-A-Car, Avis and Europcar
These are all separate franchise opportunities, but offering pretty much the same thing. Mostly found in larger cities and airports, these chains all rent cars to business and leisure travellers and holiday makers. It’s certainly a lucrative, steady business but the chances of finding an airport or major city which has a need for a hire car operation but which doesn’t have one already is slim. There’s huge competition in the market too, with most customers being very price sensitive and having no loyalty to one particular brand.