Franchises

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Thu 9 Jul 2020 14:30
Franchises - paul45

Hi All,

I suspect like a number of BR's that I'm not unique in being in a furlough situation - to be fair it could be much worse, as I at least receive some money based on my PAYE element of my Ltd company status.

My question is around what experience others have of buying into Franchises - in particular "white collar franchises" as the sales rep pitched it.

Long story short, I was targeted via Linked-In as a possible candidate for this opportunity. Having had the brief conversation yesterday with one of their sales guys, the area of my expertise, which is mostly office based, thus the reason I have been furloughed for the past 2 months, is an area where according to him many franchises exist.

This is around business improvement, operations management, consulting and senior team coaching. I have to admit of not having heard of any franchise that does this, consultancies yes, I have worked with many over the years, but not franchises.

Of course I accept that because I haven't heard of them, or come across them, this does not mean they don't exist, it's just I'm sceptical as to who they are and why I haven't met any of these people / organisations.

The usual piece about an upfront fee and an ongoing % of profits (5-15%) came up, but given this was a purely exploratory conversation there was no real info shared, due to client confidentiality concerns on their behalf - which I understand.

Anyone who can share any experience of this type of franchise arrangement - different to businesses such as restaurant chains - I would be most grateful.

Thanks in advance - Paul

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Thu 9 Jul 2020 16:05
Franchises - Falkirk Bairn

You have not heard of them

You pay money upfront

Either strong smell of a scam or spam.

Take your pick

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Thu 9 Jul 2020 16:31
Franchises - galileo

If you had had a cold-call with this proposal would you be suspicious?

Being approached through Linked-in lends it a veneer of respectability which it may not deserve.

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Thu 9 Jul 2020 16:44
Franchises - concrete

As others have stated, there is an element of doubt. If the franchise is so good why are they marketing it through cold calls? Usually word of mouth from satisfied franchisees is enough to generate enquiries. My experience of friends involved in franchises is positive, but they picked top draw ones with an established track record. ( usual high street/retail park outlets) The only downside to top draw franchises is the hefty fee to buy in. But if you do a real business study, based on factual evidence and not projections of potential, the truth will be revealed. The results of good franchises are relatively easy to uncover, less so with the doubtful ones. try to find an existing franchise holder and quiz them. If you are determined to have a franchise you need to do your homework. You could always start your own business based on your skills. If you are confident enough to make a franchise work you can make a business work. You have some thinking to do, good luck.

Cheers Concrete

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Fri 10 Jul 2020 00:50
Franchises - Zippy123

If its a white collar professional service and they are good and you are good, from my experience, they will offer you a consultancy to be paid a fee for work done and as they get to know you, offer you a partnership in the business - the assets being what your brains can offer them and their customers.

If they are asking for money upfront then it sounds like they are not doing too well and / or it's a scam.

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Fri 10 Jul 2020 13:43
Franchises - MGspannerman

“Targeted”? Or just cold called from a list a mile long? I regularly receive requests to connect etc from people on LinkedIn and just as regularly turn them down. For a franchise to operate there needs to be some form of intellectual property or at least uniqueness associated with it. Otherwise to be offered a geographical exclusivity could be seen as an anti-competitive practice.

What do they offer for their fee? A brand, system or process could count, or access/licence to use a piece of equipment etc. What do they offer in terms of business support and lead generation? Maybe back office services and advertising and promotion for example.

if you are interested then check them out at Companies House, check how long they have been going, scrutinise their terms, conditions and business offer and I would certainly want to speak to established franchisees before even considering this further. In other words, due diligence.

as you will know consultancy is a tough business and it is all about prospecting for and then keeping/up selling the clients. The day rate can be an important consideration especially if it is a competitive tender. If in your first year you can sell 40% of your time, the rest being prospecting, then that would not be a ridiculous figure for a new consultancy, I really wonder what is that makes them so good that they can make a business out of it, sell it to you and then take ongoing fees.

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Fri 10 Jul 2020 23:11
Franchises - catsdad
I have been retired for nearly 7 years but have left a consultancy profile on LinkedIn. Last week my profile was accessed by 15 people. Well up on the average of a couple a week that usually happens. I don't think it's genuine demand but some effect of the downturn. Maybe agencies are taking on recruiters on a commission only basis.

As for a franchise in consultancy, I can't see it stacking up from a prospective buyer's point of view. You either used to buy from an established name with a range of employed specialists or directly from a one-off expert. I am out of date (as per my opening sentence) but the proposed model sounds a bit flaky, at least for blue chip clients.

Edited by catsdad on 10/07/2020 at 23:12

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Mon 20 Jul 2020 17:02
Franchises - paul45

Thanks all - have to admit I was lukewarm at best on this, and given I've run my own consultancy for the last 20 years, and I have never heard of this model working in the types of work I've been involved with, suspicious at worst.

Shan't be bothering, but interested to hear other's views.

Cheers all,

Paul

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Tue 21 Jul 2020 15:59
Franchises - concrete

Good thinking Paul. If they aren't doing anything radically different from you that will make a difference in the market, then it isn't worth it. Two friends of mine bought into big name high street/retail park outlets. Basically they become a brand salesman for the company. People buy brands and there is money to be made, but the investment is huge. As they say where I come from; "There's nowt for nowt lad".

Cheers Concrete

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