Seeking advice on selling operating licence/franchise abroad

Discussion in 'International Business' started by SomethingWitty, Jun 18, 2019.

  1. SomethingWitty

    SomethingWitty UKBF Newcomer Free Member

    4 0
    Hi all,

    This is my first post on this site and I am seeking general advice on how it might be possible to expand my business into overseas markets using a franchise model.

    First, about the business. I set it up myself over 3 years ago with around 4k and since then it has grown to a £180k turnover a year business with over 50 part and full time staff (who are actually contractors).

    The business operates purely online, there are tiny monthly overheads and no office is required. Once you have a laptop and a phone you can run it.

    We sell services in the health and beauty industry and customers book services online. Staff set their working hours online too. The software would cost at least 70k to develop from scratch but I wrote most of the code myself over many gruelling hours. It runs the business brilliantly!

    This business is extremely low maintanence for the owner, all the hard work was in the setup. I think it is extremely attractive to someone who wants to buy into a turn-key model that will offer them great returns for very little time.

    The model only works in large urban areas. Madrid, Paris, Barcelona would likely do very well. I want to sell a licence but not sure where to even begin! I am highly confident that this will sell I just have no experience with this...

    If anyone could offer any recommendations or franchise companies I would really appreciate it.
    Posted: Jun 18, 2019 By: SomethingWitty Member since: Jun 18, 2019
  2. Clinton

    Clinton UKBF Big Shot Free Member

    4,409 1,656
    No, it won't, not unless you throw tens of thousands of pounds of marketing into it.

    I often come across small businesses in the UK that have achieved a little success and think the business can be made into a franchise. Some of them are even one man bands ...and they think the model can be franchised!

    Most businesses are not suited to the franchise model and/or don't have enough independent profit centres operating successfully to demonstrate that the model can work.

    If you want to do this start with a few tens of thousands to get the legal paperwork all drawn up and to put in the systems and processes and forms and failsafes.

    Then comes the job of selling the franchise - selling something that costs even £5 or £10K often takes £50K or more of marketing effort. And people are not going to buy into it unless you've established a bit of a brand and committed to a large marketing/branding spend.

    Once you've got one or two franchisees you'll realise where all the glitches and problems are and you'll have to make modifications to the contract, processes etc. And that'll cost further money. I suggest you don't start till you've got £100K or so to throw into it as you might need different contracts drawn up for different jurisdictions or get other legal advice relating to the country / countries in which you wish to operate.
    Posted: Jun 18, 2019 By: Clinton Member since: Jan 17, 2010
  3. SomethingWitty

    SomethingWitty UKBF Newcomer Free Member

    4 0
    Thank you, I had a feeling this would be the case!

    The business is certainly suitable for franchising but I only want to sell 2 or 3 licences tops as it is only suitable for large cosmopolitan urban areas. Not willing to make that kind of investment though, so thank you for the message.

    I was toying with the idea of having a self employed area manager who gets a small base rate plus a % of the commission the business earns.

    Something like that might be viable. No big franchise fee for me but someone running the business and it's paying me at least 50% of it's income
    Posted: Jun 18, 2019 By: SomethingWitty Member since: Jun 18, 2019
  4. Mr D

    Mr D UKBF Legend Free Member

    16,608 1,847
    Just be careful about whether someone is self employed or an employee. Its not your decision.

    Someone who wears their own clothing
    Uses own tools.
    Drives own vehicle
    Starts and finishes when they want, takes days off when they want.
    Can send someone else to do the work for them
    Invoices you for work done

    They are probably self employed.

    Generally if you want control of someone you will usually be looking at an employee.
    Posted: Jun 18, 2019 By: Mr D Member since: Feb 12, 2017