Franchise Focus Business News…

A new franchise self-regulatory body has just been launched. The Approved Franchise Association, brainchild of Craig Brittain, will be operating to improve self regulation of the franchise industry in the UK.

Craig told Franchise Direct “The BFA have rarely seen any real competition, and witnessing the rapid growth of the AFA, and the way it is being received by the Franchise Community, will no doubt be causing them to ask questions of themselves about their offer, and considering it’s true financial value and worth in a free market place.“

The AFA will be entering into direct opposition with the British Franchise Association, who have been operating since 1977.

With bfa membership fees starting at nearly £2,000 annually  the AFA is expected to provide a cheaper alternative to regulation of the industry.

He said: “I am delighted to be part of this new and exciting organisation. The franchise industry has grown significantly over recent years and the introduction of this new association can only be of benefit to this very vibrant sector of the economy.

“We aim to make a difference. Our values and principles ensure our organisation remains focused and driven by our collective objectives, surrounding the growth, development and awareness of the Franchise Industry within the United Kingdom.”

He continued “competition, although not always welcomed by all, brings along with it choice.  The choice here is for Franchisors to freely decide for themselves what each association offers, and which is for right for them.

“We pride ourselves on our organisations’ modern style.  Form filling is electronic; communications are quick and effective; and we will never overcomplicate any issue. “

Richard Cobb and Anna Baker from the Business Group at Michelmores provided legal advice to AFA. Richard Cobb said: “It is estimated that there are over 1,000 franchises in the UK and the number is set to increase as this is a tried and tested way of growing a business or setting out in business for the first time.

“Achieving the right relationship between franchisor and franchisee is critical and the AFA’s guiding principles offer the sector a viable alternative association and accreditation system to address the issues involved in a highly professional manner.”

Revealed by the Smith & Henderson Franchise Satisfaction Benchmark

Smith & Henderson, a specialist franchise research firm, has announced  the winners of the inaugural Best Franchise Awards. This follows an industry-wide study of franchisee satisfaction, involving over 1,000 existing franchisees, to understand what franchisors best deliver on their promises, training, support, financial and non-financial rewards.

“With almost 1,400 different franchise opportunities available in the UK, prospective franchisees are faced with an overwhelming challenge when trying to find the very best franchise opportunities,” said Steven Frost, Partner at Smith & Henderson.

“What makes these awards unique is they are based on what the real experts think – actual franchisees who work in those businesses day-in-day-out and their first hand experiences. The four franchisors recognised in this year’s awards are in an elite group and represent the very best franchise opportunities in the UK today.”

The industry-wide study of franchisee satisfaction, known as the Franchise Satisfaction Benchmark, involved gathering feedback from over 1,000 franchisees. Questions included everything from training and support, the actual franchise system, the relationship with their franchisor, the value of the franchise and ongoing management fees, and how the rewards on offer compared to their expectations.

Franchisors from all corners of commerce participated, ranging from children’s sports coaching to business coaching; from lawn care to domiciliary care; and from retail to accountancy.

Presented with the awards were:

Best Training & Support: TaxAssist Accountants
TaxAssist Accountants provide tax accountancy services and advice through over 200 offices in the UK and Ireland. Recognised as having the Best Training & Support, TaxAssist franchisees rated the quality of its initial training and support, head office, marketing and franchisee-to-franchisee support the best in the UK.

Most Recommended Franchise: Puddle Ducks

94% of Puddle Ducks’ franchisees would recommend its franchise to a prospective franchisee – the highest in the UK.

Best Growing Franchisor (franchisors with 8-14 franchisees): Jasper’s Online
Jasper’s Online provides corporate catering throughout the UK. It was rated the best franchisor with less than 15 franchisees (a minimum threshold for entering the main awards).

Nathan Siekierski, Director, said, “Being able to compare your franchise model to the industry standard is something new and refreshing in the franchising world. Winning an award based on franchisee opinions is the icing on the cake and makes the hard work of the Jasper’s team worthwhile.”

Best Franchise Conference Seminars

As well as the awards, franchisors benefited from seven best practice seminars from:

• Smith & Henderson
• The Franchising Training Centre
• O2
• The Alternative Board
• Puddle Ducks
• Home Instead Senior Care
• Coconut Creatives

These were attended by over 50 franchise professionals and designed to help them improve franchisee satisfaction and develop even stronger franchise networks. Matt Trevor-Roper, Tony & Guy, summed up the day: “A fantastic opportunity to go behind the scenes and find out other businesses’ approaches to running a successful franchise operation,” while Dan Archer, Home Instead Senior Care said, ““A really valuable discussion of franchising best practice - book next year now!”

With a dozen additional franchisors already registered to participate in the 2012 Franchise Satisfaction Benchmark that did not take part in 2011, Smith & Henderson is on target for 80 franchisors to participate in 2012 as the programme becomes a key feature in UK franchising.

An article in yesterday’s Independent newspaper focused on how the fast food giant is weathering the recession. Chatting to CEO Jill McDonald (who took over from Steve Easterbrook in 2006, her name is serendipitous). We’re sharing some of the Independent’s findings  on how the Golden Arches are not only weathering the downturn, but thriving in it.

McD’s have:

• Experienced positive growth for the last 22 consecutive quarters
• Including more than 5% last month alone
• 1,196 UK outlets
• Serve 2.5 million people per day
• Experienced an increase of 90 million visits on last year

A McDonalds Franchise

However the franchise route is narrower with other companies, and requires a large cash investment

In 2006, only 40% of McDonalds were franchise-run, compared to 65% today.

McDonalds open two to three franchised restaurants every year.

As Jill McDonald said in the article “We are inundated and would have 5,000 applicants for one position - it is that sort of scale of interest.”

What McDonalds look for in franchisees is similar to other food and restaurant franchises, although with a larger cash injection.

• Strong people management skills
• Experience running a kitchen
• Understanding of finance

The total cost of opening a McDonalds franchise runs into hundreds of thousands of pounds.

• One off fee - £30,000
• Training courses (can last up to a year) - £5000
• Cost of restaurant (at least 25% must be financed without a loan) £125,000 - £325,000

That’s not it though; franchisees must be able to cover costs like monthly rent of machines and service fees.

Representatives from Recognition Express, ComputerXplorers and the ZipYard franchises led the British Franchise Association delegation to the Houses of Parliament this week.

The group met with MPs including Andrew Bridgen MP for North West Leicestershire who were interested to learn more about the benefits of franchising and how this business model could help regenerate the UK economy.

Nigel Toplis is the managing director of Coalville based Bardon Group. Within the group sit three of the country’s most successful franchises; Recognition Express, ComputerXplorers and the ZipYard.

Mr Toplis said: “Despite the fact that franchised businesses in the UK last year turned over £12.4 billion employing over half a million people, awareness of franchising as a business model is still very low. The meeting with MPs was set up so that BFA members could brief them in more detail about the concept of franchising and its continuing success.

“It’s a proven fact that success rate amongst people starting up their own business as a franchisee is far greater than those who set up without the backing of a proven business model and ongoing support from the franchisor.”

Key business and political  figures have shown interest in franchising and entrepreneurship as a means of boosting job creation and economic expansion.

According to Prof Roy Seaman, managing director of Norwich-based Franchise Development Services (FDS) “We are talking next year of creating 100,000 new jobs through franchises,” he said. “Franchises are a solid foundation with which companies can expand and new jobs can be created.”

With redundancies and unemployment at levels not seen since the early 80s, franchising is offering a solution to get Britain working.

Franchise Direct already operates a comprehensive suite of international franchise websites, and its latest site www.FranquiciaDirecta.com.mx will be an essential tool for Mexican entrepreneur who searching for career independence.