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It’s a two-way street: Should you be a business franchisee, or a franchisor?

Becoming a franchisee is a great way to start your own business without taking on all the risks - is it the right way for you to scale up?
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Warren Ferguson, franchise director at World Options, takes us through franchising, and what business builders should be aware of before they take the plunge.

If you are looking to scale up your business in double time, one option worth considering is franchising. Franchising means giving your permission for someone else to operate under your brand, using your business model, for a fee.

In theory, both parties benefit from this arrangement. The original business owner gets to spread its brand at a pace, and make money off the back of it – the business receives an upfront fee and royalties on an ongoing basis. Meanwhile, the franchisee gets to buy in to an existing, successful business without having to take on the same level of risk as an early-stage startup.

Franchising is a fairly common practice. McDonald’s, KFC, Burger King, Marriott and Hilton Hotels are all famous examples. However, that’s not to say it’s just for the big players out there – franchising can work really well for smaller businesses, but there are certain challenges to be aware of.

We caught up with Warren Ferguson, franchise director at courier services company World Options, to find out more.

What are the biggest challenges when it comes to franchising?

The biggest challenge at first is choosing the right franchise which suits the individual. There are so many franchises out there sometimes the choice is huge. It is also important to consider any weaknesses, for example, a World Options franchise would not be suitable for someone who is not computer literate, as our online portal is used by franchisees to demonstrate how we ship items through the system to our business customers.

Once a franchisee has signed up, the first year of business is crucial: that’s when they are most excited about the opportunity, so it’s essential to use that excitement to build a momentum and work as hard as possible to build a customer base.

How can you overcome the challenges of franchising?

Our customers and franchisees are supported by our customer service and accounts team at our support centre, and any challenges can be rectified by just picking up the phone to speak to a member of the team or management.

Why is it important to offer regular training to franchisees?

We take a very entrepreneurial approach to our online products and services, consistently working towards developing and improving what our franchisees offer their business customers. So as our systems improve and industry practices change, we keep our franchisees informed and educated by offering them the very best training at our support centre. Each franchisee is also appointed a dedicated mentor from our training and development team who they can speak to with any questions or queries at any time.

Each franchisee who comes on board as a World Options business owner signs a franchise agreement, which is a contract saying they will adhere to World Options practises and standards. Our franchisees take this document very seriously, because if they don’t they are potentially risking the ending of the contract and the end of their business.

What is the best thing about franchising, in your opinion?

We have franchisees who are driven business people; they want to reach for the stars, they will be smart, business savvy and entrepreneurial to make their business success. Then we have working parents and couples with families who want to work flexible hours and still earn a good living. We have sales professionals or courier industry professionals – some recently graduated from university.

For me, that’s the best thing and brings me the greatest joy. They have freedom, financial security, and are able to enjoy the life-changing rewards this brings.

This article is part of a wider campaign called the Scale-up Hub, a section of Real Business that provides essential advice and inspiration on taking your business to the next level. It’s produced in association with webexpenses and webonboarding, a fast-growing global organisation that provides cloud-based software services that automate expenses management and streamline the employee onboarding process.

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About Author

Letitia Booty

Letitia Booty is a special projects journalist for Real Business. She has a BA in english literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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