Successfully franchised businesses run on a tried and tested formula, and there are several important factors that a leading franchisor can guarantee: an established brand with a unique position within the market place; a scalable business structure with a strong set of operational systems and a business model with a proven track record of both success and profitability.
Franchised businesses are continuing to expand and look for new partners and, as long as you have the capital, becoming a franchisee is easier than you may think. An investor would look at an average start up cost of £185k to start a Pizza Hut Delivery franchise. Fortunately, getting involved with a big name brand is seen by banks as lower risk, so they are more likely to provide loans to support investment.
Relevant experience is helpful and although franchisees can come from a variety of professional backgrounds, familiarity with retail/multi site management is a plus. Having owned your own business is also a bonus, as it means that you are already familiar with banking, loans and taxation processes. All the experience in the world, however, is irrelevant if a potential franchisee has no passion for the company, and doesn't share its values. Franchisors are not interested in anybody trying to make a quick buck - they are looking for business partners who exhibit a real driving force, a desire to not only get involved in the brand, but to help it grow as well.
Most major franchisors will have an internal support system,
where new franchisees undergo a training programme from experts
One of the major advantages of becoming a franchisee is the support network in place. Not only are you buying into an established brand, but you are also buying into its resources. What is more, by becoming a franchisee, you are able to join the British Franchise Association (BFA), which has experts available to offer assistance at all levels of the business.
Most major franchisors, however, will have an internal support system, where new franchisees will undergo a training programme from experts within the business. The training allows them to get to know the business and understand the operational side of the franchise, as well as receive marketing and sales advice.
At Pizza Hut, we support our franchisees in creating a business plan and identifying potential trade zones. We also have experts to help with the acquisition and planning process once a suitable site has been located. We can also help with the fitting of the outlet, and can provide all of our equipment and access to supply chain. We frequently work with our franchisees on initiatives to publicise the opening of the store, and they have ongoing access to our marketing and support centre teams, as well as regular contact with a Franchise Business Manager, who serves as a consultant.
We look for long-term partnerships and our franchise contracts are for an initial ten year term with the option to renew for a further ten. Because of the long-term nature of these deals, we would expect a commitment from franchisees to expand and operate several different outlets.
We encourage our franchisees to open a new store every 12 months, but some are clearly either faster or slower than this. Typically, an ‘owner-operator' would manage the first store himself, and open a few more over the next three to four years to end up with perhaps five stores in total. However, we also have some ‘investor franchisees', with more capital, who open around five stores initially and open another ten over the next five years.
Regardless of their size, our business is full of examples of successful franchisees. At a time when many smaller businesses are having trouble staying afloat, there has never been a better time to get involved with a well-established company with a proven track record for success.
