Following on from my previous blog (part 1), where I looked at the reasons and motivations that prompted me to seek change and explore franchising as a serious option. I realised that even though I was so close to finding my future venture, something still wasn’t quite right. Something was missing! It wasn’t immediately obvious what that something was, and this is where my journey continues in Part 2.
What was missing?
In trying to work this out I decided there were really two elements I had to give more consideration to. Firstly, the ‘softer’ aspects of franchising and secondly the harder financial aspects.
On a personal level
In terms of the first part, the softer aspects, what I was really looking for was something that allowed me to be myself. I am really keen on authenticity, so I didn’t want a franchise that was overly prescriptive, and inevitably some unfortunately are. Whilst I’m sure that suits many people it just wasn’t what I was looking for.
I also wanted a close relationship with the franchisor and a relationship where I felt that they had a genuine vested interest in me and my success and weren’t just happy to collect the fees. Someone I thought would go the extra mile to help me succeed. Don’t get me wrong, I’m not saying I wanted to be ‘spoon fed’ but I certainly wanted support I could rely on, particularly in the early days.
On top of all that, I wanted a more flexible lifestyle than I had been used to in my corporate role. One which allowed me to spend more time with my family as well as focus on my hobbies. I was still prepared to work very hard – just on my terms this time.
In some ways the second part was easier to analyse and I had a few ideas about what was concerning me. In some cases, I couldn’t get my head round the initial franchise fee. This wasn’t from an affordability angle because I was in a favourable financial position, but from a value for money point of view. Even this wasn’t straight forward though because it wasn’t just simply a case of the higher the initial investment the more difficult the decision. I realised I needed to justify two things:
- What was I getting as part of the initial investment and was it justifiable?
- How long would it take to get a return on my investment?
For example, in one ‘mid-priced’ franchise I realised that I wasn’t actually getting an awful lot for my upfront investment and I also realised that in another, a lower franchisee fee didn’t mean I should expect lower potential earnings from the franchise. This should have been obvious to me from the start, but it wasn’t and took me some time to get my head round.
The next aspect was the Management Services Fee (MSF) sometimes referred to as the royalty. There were a range of percentages for this and in most cases I couldn’t easily work out what this was meant to cover. Also, in many cases this wasn’t the only monthly fee that was payable. It was quite common to see separate additional fees for central marketing, invoicing, IT and other subscriptions. This often made what appeared to be a low MSF into something which, in reality, was a lot larger.
A slight change in direction
It was also around this time that I met Adrian Knight, through his company Knight Franchises, and I took the opportunity to become a Franchise Consultant. Through my initial research and this 14-months period of working every day in the franchise environment, I was able to gain a really good understanding of the franchising world and how it operates.
This insight was multi-faceted. I found out an enormous amount which I wouldn’t have done otherwise. I identified which were the good ones and which were the not so good. What franchisors look for in potential franchisees, and equally what people investigating opportunities look for from a potential franchisor.
The short of it, I quickly got to know the good and the bad and could easily relate to franchisors and potential franchisees. Armed with all this knowledge I started to develop my own philosophy on franchising and what are the essential elements that make the relationship a success for both the franchisor and franchisee.
Towards the end of that intensive educational process covering all things franchising, a truly fantastic opportunity presented itself. An opportunity to put all that learning and philosophy into practice.
The perfect opportunity
CMC has a fantastic heritage built up over 31 years. Its Business Advisors are very experienced and knowledgeable and have provided invaluable support to many clients in all aspects of their business. So, when Adrian Knight offered me the chance to be Managing Director of his newly acquired company, I was immediately excited by the idea.
Join me in Part 3…
The concluding section in the series of blogs, where I examine my philosophy surrounding franchising.