Franchising - from both sides of the counter
Chris Hogan, 13th May 2015, Business
Have you ever thought of buying a franchise? What about turning your
business into something that you can sell as a franchise? How does it work
and what makes a good franchise?
A long-standing supplier of ours is turning their business, Thomas Cleaning, into a successful franchise and we asked company boss Richard Thomas, who started the business 25 years ago, to tell us all about it.
What's the business about?
You won't be surprised to find out that Thomas Cleaning supplies cleaning services to domestic and commercial premises, operating in the West Oxfordshire area.
Richard had worked in retail, turning around failing stores, which meant moving from city to city. But having always wanted to work for himself, and having noticed many window cleaners on his travels, he eventually took the plunge and started cleaning himself.
Very quickly he found he had megastores across the country and even Heathrow Airport on the books, so clearly he had no trouble in finding customers. He soon found himself hiring staff and it's now a million-pound business.
Driving factors for franchising
It was keeping the good staff that led Richard down the franchising route.
"Initially we saw it as a way to keep good staff," he said, "with the best will in the world, cleaning isn't a first choice for many people, so setting them up with their own franchise was a way of giving them a career development path and keeping their skills close to us."
Those first two franchises were in the areas around Leamington Spa and Cheltenham and it worked so well that Richard quickly realised it could be taken nationally. Now an additional three franchises have launched and there are over ten in the pipeline for this year.
franchising is an easier, less expensive and faster way to expand - it's a classic case of swings and roundabouts
Growing a business
The alternative method of growing a business would be for someone like Richard to go all over the country finding premises and managers to run branches for him. Many businesses do go down this route but it can be slow and expensive.
Franchising is faster because the franchisee handles the setup and operation of the 'branch'. In return for support, marketing, training and know-how, the franchisee puts up a lump sum to start the business and then pays regular fees to the franchisor.
In the end expanding via franchises is less lucrative, because setting up your own network of branches means more profit. But franchising is an easier, less expensive and faster way to expand - it's a classic case of swings and roundabouts.
Cleaning as a franchise
For a business to be franchisable it has to be able to be parcelled up into something that can be bought to get a head start in a business. So what is it that makes the franchise model work for Thomas Cleaning?
"For one thing," said Richard, "cleaning never goes away, it's always needed, so there's good demand all over the country. It's immensely popular, with about 35 franchises available in the UK."
we enable people to grow their business much quicker than when starting up on their own
But couldn't anyone with a bit of get up and go start their own cleaning business?
"Yes, they could," Richard agreed, "but we enable people to grow their business much quicker than when starting up on their own."
Strong packages
The marketing package includes (depending on the level you buy) the brand, vinyl wrapping for vehicles, marketing collateral and training on how to market the business, even to the extent of providing initial customers.
Support includes "StressBuster" - Thomas Cleaning's scheduling software which manages the administration of a cleaning business (there's an awful lot of admin, Richard points out) with email alerts for customers and staff as well as agreement management - vital for coping with different charging levels, management of keys and different levels of service for each customer.
Creating a franchise
we have three levels people can buy in to and two money-back guarantees to give them the confidence to give it a go"
So what would Richard say to someone who thinks their business might make a good franchise?
"Sift through the advice you're getting, it was difficult finding out who to listen to. We spoke to a couple of local business who operate national franchises and joined the BFA (British Franchise Association) which was very helpful with sorting out legal stuff like contractual agreements at the beginning."
"Learning who to say no to, and how to say it, was a big learning curve," he added, "so now we put a lot of effort into our own marketing; this makes us more likely to attract the right people in the first place - it saves a lot of time."
Getting a franchise
We also asked Richard what he would say to someone thinking of buying into a franchise, whether it was for cleaning or something else.
"Shop around, don't just go with your first choice," he said, "ask to see accounts, speak to other franchises, and have contracts read by solicitors. You could also secret shop the organisation - pretend to be a customer - to find out what kind of response you get."
good ongoing support which helps both us and our franchisees to be consistently profitable
"Find out what safeguards there are too, we offer money back guarantees, so see what other franchises offer. Investigate the financial arrangement thoroughly and think about what's behind it. A flat fee encourages a business to find franchisees but there's less incentive to offer good support.
"We chose a percentage," Richard explained, "which encourages both us and the franchisee to make it work, we're motivated to provide good ongoing support which helps both us and our franchisees to be consistently profitable."
Take a look
If you're thinking of a franchise and want to take a look at what Thomas Cleaning offers, call 01608 646116
Thomas Cleaning Fanchise website
