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SarahBell

Franchises - Are They A Solution?

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Speaking to someone yesterday about a workshop they'd been to about franchises.

A company has been given some money by the govt to give people 30% loans for a franchise so that banks will lend them the other 70%.

It's being seen as a great option - and the "30% is only about 10k" and "they have a 9/10 success rate over 5 years" (But think this company has only been going 3 years.

The 30% is repayable after 3 years I think ....

They're not huge franchises just cleaning and gardening type stuff.

My thoughts were money would be better spent showing people how easy it is to go self-employed, what pitfalls to avoid. I think HMRC already does courses and help for people - so very little help would be needed - a little basic accounting, how to market your business locally etc...

Certainly not something that needs £30k+ throwing at a franchise.

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I think they can be useful as they can give you a turnkey business - and a lot of support if you are completely new.

Trouble is that I think a lot just end up being a job you paid to get employed in. If you have to work everyday in the business - you aren't much different from the rest of the employees. I'm often astonished how little people are prepared to work for when running their own business. Local fish and chip shop is up for sale. £70K/year turnover - and for that you get the hassle of working unsocial hours, employing 2 other staff, smelling of grease, dealing with all of the various rules and regulations, etc. If you employed a manager to run it for you - you'd probably walk away with almost nothing.

Also suspect that the franchiser benefits more than any franchisee - it must be one of the lower risk ways of expanding a business.

Edited by StainlessSteelCat

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Speaking to someone yesterday about a workshop they'd been to about franchises.

A company has been given some money by the govt to give people 30% loans for a franchise so that banks will lend them the other 70%.

It's being seen as a great option - and the "30% is only about 10k" and "they have a 9/10 success rate over 5 years" (But think this company has only been going 3 years.

The 30% is repayable after 3 years I think ....

They're not huge franchises just cleaning and gardening type stuff.

My thoughts were money would be better spent showing people how easy it is to go self-employed, what pitfalls to avoid. I think HMRC already does courses and help for people - so very little help would be needed - a little basic accounting, how to market your business locally etc...

Certainly not something that needs £30k+ throwing at a franchise.

if for 100K you can buy a KFC or a Pizza hut...great...but gardening and cleaning?

All you need is a van and an advert...and you wont be paying annual royalties.

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In acknowledgement to the other thread.

How about starting a cupcake franchise.

Create a "pack" (contains some copyright free google images of cakes, a collection of recipees, a banner to stick on the car, some instructions on how to get custom, how to create flyers, business cards), then sell this "franchise" to punters for £2000 a piece.

No baking necessary.

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if for 100K you can buy a KFC or a Pizza hut...great...but gardening and cleaning?

All you need is a van and an advert...and you wont be paying annual royalties.

You're making the assumption that the person doing it has some reasonable level of business nouse. The few people I know who've bought those types of franchise were, quite frankly, pretty dim. Buying the complete package was pretty much the only way they would ever be able to start any kind of business.

I also know a guy who owns 5 McDonalds franchises who is super-smart and super-rich. He did the sums when he first started out and figured out that the ROC for a McD's was way higher than just about anything he could dream of starting himself. Hard work though.

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if for 100K you can buy a KFC or a Pizza hut...great...but gardening and cleaning?

All you need is a van and an advert...and you wont be paying annual royalties.

I've often thought if I was to be made redundant I'd get some cards printed and put some adverts out for just about every low-skilled business I could think of - cleaning, gardening, PC repair, removals, handyman, tyre repair, laminate floor fitting - then just take whatever came in.

I think that with a bit of graft at least one of them would stick.

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I've often thought if I was to be made redundant I'd get some cards printed and put some adverts out for just about every low-skilled business I could think of - cleaning, gardening, PC repair, removals, handyman, tyre repair, laminate floor fitting - then just take whatever came in.

I think that with a bit of graft at least one of them would stick.

I'd love to see the state of your house whilst you work out what you should do !

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I've often thought if I was to be made redundant I'd get some cards printed and put some adverts out for just about every low-skilled business I could think of - cleaning, gardening, PC repair, removals, handyman, tyre repair, laminate floor fitting - then just take whatever came in.

I think that with a bit of graft at least one of them would stick.

That's master of all trades..................... till you get found out. :D

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That's master of all trades..................... till you get found out. :D

Youtube, a socket set and a lawnmower. There's nothing a man can't do. Cash in hand of course to top up the tax credits.

I'd love to see the state of your house whilst you work out what you should do !

The market will decide what I should do :)

Edited by frozen_out

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Want to open a KFC? http://www.kfc.co.uk/our-restaurants/franchise

"What you'll need.. A minimum of £5m if you're a business - £2m will have to be your own investment, and you must have access to additional funding to match growth"

To get rich it helps to start rich.

Yep, a decent franchise is far more expensive than you'd think. Not just the uk. I was thinking of going the Lizrran or 100 montaditos route - they are expanding throughout Spain and abroad. In fact 100M have brought down the entry cost, but it'still 150k euros, and that presumably is before you pay for premises.

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Yep, a decent franchise is far more expensive than you'd think. Not just the uk. I was thinking of going the Lizrran or 100 montaditos route - they are expanding throughout Spain and abroad. In fact 100M have brought down the entry cost, but it'still 150k euros, and that presumably is before you pay for premises.

Of course, KFC, Pizza Hut, Lizrran et al didnt start as Franchises.

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Franchises for gardening or cleaning, can help you find leads to work. You already have a big box name brand that people trust more - more so than "honest JAck grass cutters".

If you have little competition I would start on your own name and build the business that way. But if you live in an area with intense competition, a franchise may help.

Edited by out2lunch

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if for 100K you can buy a KFC or a Pizza hut...great...but gardening and cleaning?

All you need is a van and an advert...and you wont be paying annual royalties.

I think the original poster was saying that the franchise was £30,000. "It's being seen as a great option - and the "30% is only about 10k" "

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Franchises for gardening or cleaning, can help you find leads to work. You already have a big box name brand that people trust more - more so than "honest JAck grass cutters".

If you have little competition I would start on your own name and build the business that way. But if you live in an area with intense competition, a franchise may help.

The other point is that in the kosher cases (and there are quite a few shady examples, I agree) then it can be a very good way to not have to invent everything, it's already been proven in other market places. You don't need to think what colours look good on your van, that's sorted, or what wording you should put on your leaflets, that's market tested, or how much you charge for different jobs. Even backroom office processes should be largely decided for you. Not everyone is born to revolutionise their markets.

However, the fact that funding for lending is getting into this space will in a couple of years see the hitherto very low failure rates for franchises go quite a bit higher (and the shady operators increase). I'd really hate to see this underappreciated segment of the business landscape become another bloody bubble.

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There was a relatively new C**H Generator pawn shop in Southampton East Street, which has recently closed down. I know this is a franchise as I had a brief look at it in Franchise Magazine. I didn't think there would be a problem having one there, but clearly it was too near the main town centre (where Debenhams, John Lewis and M&Sm are), and they are more suited to secondary and tertiary town centres. A franchise isn't guaranteed to work either. I can also think of some S*bway franchises which had problems being open on an off for a period in Boscombe.

Edited by out2lunch

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Franchises for gardening or cleaning, can help you find leads to work. You already have a big box name brand that people trust more - more so than "honest JAck grass cutters".

If you have little competition I would start on your own name and build the business that way. But if you live in an area with intense competition, a franchise may help.

But if you live in an area with intense competition you are probably best NOT dipping toes into an overheated market - not unless you are going to lower prices by undercutting people.

Sometimes local and small and personal is best for services like cleaning and gardening and dogwalking. Word of mouth will stand you in better stead than spending £30k on support.

The gardeners round here charge about £12 an hour - but there's 2 of them and you have to pay both. They take their time doing a lawn and hedge too! So I think its about £25 a time - once a fortnight.

They have several jobs on our street all done on the same day.

They have a van, nice business cards and might even be part of a franchise I spose - but I don't think they're making enough to make a nice wage AND pay back £30k of debt - presumably the bank would give a 20k loan over 5 years and the 10k off this group would be paid back over 3 years after 3 years?

Bearing in mind of course that most gardening is summer work for the most park and they'd not be cutting lawns from October to March.

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But if you live in an area with intense competition you are probably best NOT dipping toes into an overheated market - not unless you are going to lower prices by undercutting people.

Sometimes local and small and personal is best for services like cleaning and gardening and dogwalking. Word of mouth will stand you in better stead than spending £30k on support.

The gardeners round here charge about £12 an hour - but there's 2 of them and you have to pay both. They take their time doing a lawn and hedge too! So I think its about £25 a time - once a fortnight.

They have several jobs on our street all done on the same day.

They have a van, nice business cards and might even be part of a franchise I spose - but I don't think they're making enough to make a nice wage AND pay back £30k of debt - presumably the bank would give a 20k loan over 5 years and the 10k off this group would be paid back over 3 years after 3 years?

Bearing in mind of course that most gardening is summer work for the most park and they'd not be cutting lawns from October to March.

People pay to have their lawn and hedge cut? £25?.Bonkers.Iv never ever seen anyone pay for their lawn cut up here in the north east apart from the odd fiver for kids to do it.Im sure it happens but seems crazy to me to pay that.

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Franchises for gardening or cleaning, can help you find leads to work. You already have a big box name brand that people trust more - more so than "honest JAck grass cutters".

If you have little competition I would start on your own name and build the business that way. But if you live in an area with intense competition, a franchise may help.

I cant think of any big brands that do gardening...we do get cards and leaflets through from locals though.

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People pay to have their lawn and hedge cut? £25?.Bonkers.Iv never ever seen anyone pay for their lawn cut up here in the north east apart from the odd fiver for kids to do it.Im sure it happens but seems crazy to me to pay that.

Property managers wont cut the lawns themselves, and some old folks just cant do it.

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Property managers wont cut the lawns themselves, and some old folks just cant do it.

yes I can understand there being a small market for older people with no family close by to do it but for anyone able bodied or with family close by seems crazy to pay that for such a simple thing as cutting a lawn/hedge.

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I've often thought if I was to be made redundant I'd get some cards printed and put some adverts out for just about every low-skilled business I could think of - cleaning, gardening, PC repair, removals, handyman, tyre repair, laminate floor fitting - then just take whatever came in.

I think that with a bit of graft at least one of them would stick.

Word of mouth, trust, reliability and value for money. ;)

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  • 243 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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