Franchising is often seen as the easy way into successful business - but few realise that as little as one in 100 applicants for a franchise is usually taken on.

None-the-less, franchising is a growing sector in Britain, currently with an annual turnover of £7 billion.

Three in the Bradford area are Urban Planters, Prontaprint and Amtrak.

Urban Planters, with its headquarters in Clayton, has nine franchisees from Scotland down to London.

Amtrak's Bradford division is one of a number the group has throughout the UK and is one of the group's success stories. Prontaprint, in Petergate, is also doing well.

Brian Smart of the British Franchising Association says one of the barriers to an even more substantial growth is the difficulty franchisors face in finding good prospective franchisees.

"It is very easy to find bad prospective franchisees but it is very difficult to find good ones," he says. "As a measure of that an established mature franchisor will only select one person out of every 100 serious applicants."

He says it should not be difficult for prospective franchisees to identify franchisors who haven't proven in practice that their business system works. But he is always surprised at the lack of research and investigation by prospective franchisees - something his association can very much help with.

The great advantage with franchising is not just that the business system you join has been proven but that all the problems which the franchisee is likely to come across will have been faced by others many times before.

"That kind of experience to fall back on can be extremely valuable in making sure that you don't make very costly mistakes which, if only you had known, other people had solved 100 times before."

But actually franchising out your business is not easy.

"Nobody should be under any misapprehension," he says. "If they are currently running a very successful fried fish and chip shop then if they are going to go into franchising to expand their business they are going to be deploying a completely different range of skills for the future.

"They need to be able to identify and describe the processes and the standards which make their businesses successful, the staff skills which are needed, the staff organisation, the equipment needs, the site needs and so on, so that they can pass their know how on at arms length in a relatively short period of time.

"That is not about frying fish."

He says franchising out your business is not necessarily a cheap or quick way of creating growth. Establishing common standards and training systems takes time.

However once initial investments in time and money have taken place and the first few franchisees have been successfully established then it can be a fast method of putting in place a substantial number of identical business outlets.

This story is from Business Essentials. For further details phone 01344 397021

Let's make sure that you don't get lost in franchise

By Susan Clare

Franchising may be an opportunity to expand without the need for significant capital outlay or a significant increase in the management requirement.

It may give an opportunity not otherwise available to a business to develop its goodwill and trade name from a local to a national basis or perhaps from national to international basis, writes Susan Clarke.

There may be significant benefits for both parties to enter such a relationship. The franchisor may get an initial capital payment from selling his name, his business format and his method of working. The franchisee has the benefit of an established name and proven track record, rather than starting from scratch. To continue to benefit from the goodwill of his business, and to continue to benefit from the opportunity to franchise, it is extremely important that as much control as possible is maintained by the franchisor to protect his goodwill and the standard of service or product. The great risk for the franchisor is that unless a reasonable level of control can be maintained, the business and its goodwill may suffer from a badly run franchise outlet, or may be diluted by a blurring of the identity of his goodwill and trade name.

If franchising is appropriate for your business, then the legal agreements and the control and regulation of those agreements is vitally important to you. No amount of legal documentation can guarantee control. If the risk is too great for your business, then franchising may not suit you at all.

If you are considering buying a franchise, the quality of the systems, the identification of a trade name and the goodwill associated with it and the support that is given, are all the important factors. The franchisee will be particularly concerned if a large capital outlay is made initially.

The franchisee should also be keen for the franchisor to maintain control and thus requires an agreement that protects him from the eccentricities of other franchisees. It must also provide him with the support that he requires so that he does genuinely benefit from a proven business format and track record. All too often, a franchise arrangements has little control over the activities of the franchisee, but equally the franchisee is therefore left out on a limb having perhaps paid a significant amount of money when really it would have been much cheaper for him to go it alone as he is almost effectively starting from scratch.

A well controlled and regulated franchise system can be a valuable growing asset. A badly controlled and regulated arrangement may destroy the business.

Susan Clarke is a partner with solicitors Last Cawthra Feather

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