A Brief History Of Franchising
Franchising started with Isaac Singer way back in the 19th century!!
Mr Singer wanted to distribute his sewing machines outside his geographical area and provide training on how to use the machines, as people wouldn’t buy them without training and retailers did not provide this service. Mr Singer started selling licenses to people in different parts of the country, this licence gave permission for the owner of that licence to sell and teach people how to use the Singer sewing machine. This bought the use of the sewing machine to the public where before it had only been for commercial use.
In 1955 Ray Kroc, a milkshake mixer salesman discovered the McDonald brothers’ on their hamburger stand. He found they were buying so many of his mixers because they had developed a high volume production system which enabled them to provide fast service with consistent results at a low cost.
Ray Kroc became their licencing agent and recruited franchisees, starting in the Chicago area. In 1961, he bought out the McDonald brothers’ and now McDonalds is one of the biggest and most successful franchise organisation ever established, unleashing the wave of franchising as we know it today.
What are the benefits of buying a franchise?
Brand awareness – The corporate image of the company and brand awareness is already established and with each new franchise area, it in turn expands that brand.
Training – Franchisors provide extensive training and ongoing support to the franchisee, stopping all the trial and error when setting up on your own. They have made the mistakes and found the things that work, so you don’t have to make them again.
Saving time – The franchise company already has the business model in place, enabling the franchisee to focus on running and growing a successful business.
Franchise Resales: failure or a measure of success
For far too long there has been a damning untruth in franchising when the time comes for a franchisee to sell their business and go on to pastures new.
It is insulting, quite frankly, to suggest that a resale should be deemed a ‘failure’. This is simply not the case and could not be further from the truth. Taking the plunge and going out on your own, even with a strong support network from your franchise, not to mention the backing of family and friends, can be a daunting prospect, but an equally exciting challenge. So to say that after taking a risk, investing hard earned cash to manage your own business to then sell it on is a sign of failure, is just plain wrong.
Besides, there are plenty of reasons as to why people choose to sell their franchise, including retirement, relocation – either in the UK or abroad – or, simply, to pursue other interests – none of which come even close to being classed as failures.
A well planned and prepared exit strategy, together with a healthy set of financial results and customer base, is always going to be an attractive proposition for any prospective buyer. So, in actual fact, a franchise resale is actually a measure of the success of the previous owner.
Resale opportunities provide a potential buyer with the chance to take over an existing and established brand in an area with a solid customer base and guaranteed income from day one, as well as ongoing support from that particular franchise’s HQ. So, unlike starting out in business from scratch, you are actually already one step ahead of the game.
In most cases at Ovenu, an oven valeting franchise network made up of more than 100 businesses owned by men and women across the UK, retirement is reason for a franchise resale. Some even relocate to other areas of the UK to take up another Ovenu franchise or one of its franchise opportunities abroad.
Ovenu’s standard package contains approximately 60,000 applicable homes, which also includes full training prior to any business launch, professional, uniformed work wear and a liveried vehicle, and ongoing support throughout the life of the franchise along with its trade name and trade mark rights.
So, tens of thousands of potential customers, many of whom are already accustomed to the service they received from the previous franchisee, can provide an exciting business prospect. There is always the opportunity to target a new marketplace and increase your order book too, so growth and expansion plans are readily available once you have settled in to your new surroundings and have familiarised yourself with the market.
Of course, such a success doesn’t happen overnight; it takes months and years to achieve with plenty of hard work and a real hunger to grow your business and see it prosper. A thorough and well planned marketing strategy, customer relations and providing a first class service, which people will remember, are critical to the success of your franchise.
However, not everyone has the business acumen to take on and manage a franchise and make it successful. As the old saying goes, ‘you can lead a horse to water, but you can’t make it drink.’ Even with support from the outside, some people can struggle to adapt and make it work.
It is certainly not a true representation of the industry and to tar all franchise sales with the same brush, as failures, is unacceptable. This myth needs dispelling and the hard work of franchisees who have built their businesses up so that a buyer is in a position of strength from the outset, needs to be recognised.
Rik Hellewell, Managing Director and Founder of Ovenu www.ovenufranchise.co.uk