Literature Review Nothing Succeeds Like Franchising
The first thing the curious reader will want to know going through this dissertation is, does franchising work? Because if it doesn’t, or if its performance is at best patchy, there is little point in pursuing the matter any further. Before going into the answer in detail, let’s start on an encouraging note by looking at some success stories. The website of the British Franchise Association (BFA), an organization that lays fair claim to being the voice of British franchising, features some 50 case studies, each bearing a picture of a happy, smiling franchisee who explains in the accompanying text how his or her new business was life-transforming. Straight away, the list makes the point that franchisees come from a wide variety of backgrounds, are of varying ages, and are engaged in a huge diversity of activities.
Iain McKillop, a qualified engineer with 30 years’ telecommunications experience, came across franchising quite by accident. He had been working in Amsterdam for two years until family circumstances brought him back to his native Scotland. While updating his CV on his computer, a pop-up advertisement appeared for the business coaching and training franchise Action International. ‘The timing was perfect’, he says. ‘Action offered everything I was looking for – the opportunity to use my business experience, own my own business, but still work within the support structure of a multinational company.’
He started business coaching in January 2004 in Glasgow and his subse- quent success with clients has earned him recognition from the parent company in the shape of ‘Gold Master Coach’ status. ‘One of the reasons I wanted to get into Action was the support offered to franchisees’, he says. ‘I knew that I would be investing a substantial amount of money and it was important to know I wouldn’t just be abandoned once the cheque was signed. The support was second to none. We have regular monthly meetings as well as annual conferences. I have the opportunity to learn from other people’s experiences every day.’
Neil Newman trained as a plumber, but it was only when he started his own Drain Doctor franchise that he really began to reap the benefits of both his experience and his hard work. Within 18 months of starting his franchise in Exeter he achieved a turnover of £264,000. He puts his success down to following the franchisor ’s business system. ‘I’ve done it the Drain Doctor way and it works’, he says. ‘Someone else who trained at the same time as me didn’t follow the system and eventually gave up the franchise.’
Drain Doctor says it is the country’s largest emergency plumbing and drain repair business and rose to the top through offering reliable service of the kind customers do not always associate with plumbing. ‘Many householders are fearful of calling out plumbers and other construction tradesmen because of the horror stories they have seen on television programmes’, says Neil. ‘It is very distressing to be the victim of shoddy workmanship but Drain Doctor has built a reputation for excellence that wins customer trust and loyalty. By providing a genuine 24-hour service with no call-out charge and no extras for working unsocial hours, we give customers the assurance that they are not going to be ripped off. Our smart vans and work clothes convey a professional image that is empha- sized by our working practices.’
Neil employs his father as a manager, and his partner Anne Pulman handles all the business administration tasks. ‘I couldn’t manage without her’, says Neil. ‘Drain Doctor’s head office team has also been great with the comprehensive initial training and the ongoing support it provides.’
Alan Abel is a franchising veteran. For the past 18 years he has been running a Complete Weed Control business, eliminating unwanted vege- tation on behalf of a variety of industrial, commercial and local authority customers. As a former farm manager, he grew weary of seeing his hard effort not being fully rewarded. Franchising provided him with the inde- pendence he so wanted and enabled him to avoid many of the pitfalls that threaten independent small businesses. When he began his franchise in South Wales back in the 1980s, he started off with the great advantage of taking on many existing contracts and contacts established over the previous 10 years by the parent company. Since then, he says, his client list has grown tenfold and is growing still. ‘Despite many years of experience I still find myself amazed at the number of new opportunities for increasing business that I come across every week.’ In 1998, Alan was appointed to the board of directors of the parent company and now offers advice and support to new franchisees.
In 1993, Rosemary Conley launched her national network of diet and fitness clubs. Operating on a franchised basis, it now has more than 175 franchisees who run some 2,000 fitness classes every week for more than 80,000 members. Jillian MacGregor, franchisee in the Edinburgh West region, was the company’s franchisee of the year in 2000. She won the title just a few days after giving birth to her second child, Cameron. Combining work and family life is, she says, one of the reasons why she loves what she does for a living. ‘I joined the company in April 1995 and haven’t looked back since. Before starting out I was keen to find out every- thing I could about the organization. I received excellent training and the ongoing support and assistance has helped me to make such a success of my business.’
Before signing up as a franchisee, Jillian worked as a computer programmer for British Gas. Leaving her job after 10 years gave her no regrets. ‘It really was a complete change for me but it was the right decision to make and one that I would make again and again if I was asked to choose. I love the flexibility and the improved lifestyle I now have.’
Nadeem and Sam Sohail run a Benjys delivered ‘vanchisee’ in East London, delivering sandwiches, breads, drinks and prepared meals to a growing number of customers. Neither had any previous experience of the food or retail business. Sam says: ‘Leaving our jobs and setting up a new business was a difficult decision, especially as we have two young children to consider. I used to buy my lunch from Benjys when I worked in the City, so I was already familiar with the brand.’
Nadeem adds: ‘The training you receive when you first start is very thorough. Absolutely everything is covered, from how to store food at the correct temperature, to hygiene and day-to-day business management. You are also given the opportunity to shadow a franchisee and see for yourself how the van operates and what a typical day involves.’
Duncan Rice had already given up a steady job before he discovered franchising. ‘I taught English and drama in schools in England since leaving South Africa in 1985. Increasingly, I felt a real uneasiness about another year of being a hamster on a treadmill; I needed to jump off, get out of the cage and into something more fulfilling. I was bogged down with paperwork, reports, marking, endless parents’ meetings, depart- mental documentation, and the prospect of a looming inspection filled me with dread. So I resigned.’ While he was contemplating his next move he saw a small ad in the Times Educational Supplement offering franchises in Helen O’Grady Drama Academy. It seemed an opportunity tailor-made just for him. Further investigation increased his confidence. ‘I realized that the programme was child-centred and very much in accord with my belief in developing children’s confidence and self-esteem through drama. Within two months, I sold my house in Cambridge and moved to Northern Ireland. All sorts of things were going through my mind. Would I earn enough money to survive? Would anybody sign up? How would the children respond to my accent? No one could have prepared me for the response I was to receive. I was besieged by calls and within two weeks nearly all my classes were full, with extensive waiting lists and a total enrolment of 250 pupils in my school. I feel the freedom of being a free agent – cages and treadmills are in the distant past now.’
After many years working with her husband in a property development business, Glynis Croft decided she would like to run her own business. She now has her own lavatory cleaning operation, or, more precisely, she is managing her own washroom maintenance company. ‘I was originally introduced to franchising through my NatWest Bank’, she says. ‘On a cold and wet November evening I attended a franchise seminar and one of the several speakers at the event was Marilyn Keen, development director of Swisher. I had not heard of Swisher before and I must admit that the concept was not the most glamorous one I heard that evening.’
Over the next few months Glynis spend a lot of time looking at a variety of franchises and, to her surprise, through a process of elimination Swisher came out as one of the two best suited to her needs. ‘During my meetings with Swisher’s corporate team the franchise was very clearly explained and I found all the staff very friendly and approachable. I felt that the support would be good, and I have not been disappointed.
‘Choosing a franchise was a lengthy process, but when I eventually decided on Swisher and started my business I felt confident that I was able to tackle it properly.’
Within six months she gained more than £70,000 of business and by the end of the first year her turnover was £120,000. ‘Working together with my sales and service staff and with Swisher Corporate, I continue to ensure that my staff provide a high standard of service to my customers. This is already showing dividends in terms of growth through customer recom- mendations and various multi-site accounts.’
So what are we to take away from this cavalcade of success stories, this catalogue of dreams fulfilled? At first sight the evidence seems
overwhelming: franchising is a tonic, an elixir. All you need do is swallow a dose and bingo! A new, better you rises from the dead, work- torn, downtrodden you. Liberated from the reins and bridle of wage slavery, you’re free to canter through the lush fields of self-employment, relishing the intoxicating air of freedom. You’re your own boss at last and all is well with the world. Too good to be true? Yes, I am afraid so. Franchising is not a panacea, nor a magic wand, nor even a modest passport to easy business success. It is not even self-employment in the true sense of the term since, as we shall see, franchisees can never be entirely their own boss, free to make their own decisions and determine their own destiny. What franchising achieves, when it is done well, is a measure of independence, a fairer means than salaried employment of matching reward to effort, and a much less risky way of setting up in business than doing so from scratch with no help at all and, perhaps more important, no original ideas of one’s own.
There is much to be learnt from looking more closely at the BFA success stories outlined above. First, we have to bear in mind that the BFA is constitutionally predisposed to accentuate the positive: it wants wherever possible to promote and spread franchising. And so, like an evangelist, it eagerly entices the testaments of converts whose accounts are themselves a touch messianic. All the case studies I have quoted above, and there are many more giving much the same cheerful message, are, of course, genuine. But do they give the whole picture? Well, no. Since they form part of that grey area which is neither advertising nor unrestrained speech but is known as public relations, they tell only part of the story – the part the writers want you to hear. Like all of life, fran- chising has its downside, its disappointments, its setbacks, its drudgery, but no one is going to tell you about those, unless you ask them.
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