Starting a Franchise

Log in to reply
C

codltd

  • #1
    Hello,

    I currently run a small business as a Limited Company but feel the business would be great to franchise, however I have a couple of concerns;

    1)Is there any legal required to go from Ltd to Franchise?
    2)Best place to advertise your business model (cheaply)?
    3)How to price the franchise?

    Any help would be great thank you
     
    A

    Andrew46

    Free Member
    May 20, 2011
    230
    45
    London
  • #3
    currently run a small business as a Limited Company but feel the business would be great to franchise, however I have a couple of concerns;

    1)Is there any legal required to go from Ltd to Franchise?
    2)Best place to advertise your business model (cheaply)?
    3)How to price the franchise?
    Click to expand...

    First I assume you have successfully run the business yourself for at least 2/3 years and the business model is proven. Have you researched the market and reviewed available information, e.g. the British Franchise Association website?

    In answer to the questions;

    1. There is no such thing as a legal "Franchise" status. You could use your existing company to grant franchises or more probably for commmercial and tax reasons set up a separate company as a subsidiary or stand alone. You need professional advice on that aspect.
    2. Not my area but try the various franchise magazines?
    3. Assuming you have developed financial projections based on your own experience, you then need to research the market to see what comparable franchises charge in relation to expected levels of profitabliity. Get advice from an accountant with relevant experience or possibly a business franchise consultant.
     
    Upvote 0
    C

    codltd

  • #4
    Andrew46 said:
    First I assume you have successfully run the business yourself for at least 2/3 years and the business model is proven. Have you researched the market and reviewed available information, e.g. the British Franchise Association website?

    In answer to the questions;

    1. There is no such thing as a legal "Franchise" status. You could use your existing company to grant franchises or more probably for commmercial and tax reasons set up a separate company as a subsidiary or stand alone. You need professional advice on that aspect.
    2. Not my area but try the various franchise magazines?
    3. Assuming you have developed financial projections based on your own experience, you then need to research the market to see what comparable franchises charge in relation to expected levels of profitabliity. Get advice from an accountant with relevant experience or possibly a business franchise consultant.
    Click to expand...

    Thanks for the advice, ill be honest with you, I started the company 4 weeks ago and have already turned over £44,000, had to take on staff and the phone hasn't stopped ringing.

    Its these reasons why I want to get a franchise out asap and strike while the iron is hot.

    Cheers
     
    Last edited by a moderator:
    Upvote 0
    B

    businessfunding

  • #9
    codltd said:
    Fair point but I would discuss this with people who are actually looking to invest in a franchise, if thats the case drop me a pm and we can talk privately.

    thanks
    Click to expand...

    From what you have said this looks like a short-term opportunity rather than a franchise. Generally speaking for a franchise people will look for an established history of profiatability, a set system/procedure and an established brand.

    You might do better to look at ways of protecting your market and building it yourself
     
    Upvote 0
    C

    codltd

  • #10
    kickstartbtm said:
    From what you have said this looks like a short-term opportunity rather than a franchise. Generally speaking for a franchise people will look for an established history of profiatability, a set system/procedure and an established brand.

    You might do better to look at ways of protecting your market and building it yourself
    Click to expand...

    Well this isn't a short term industry, we have annual contracts with over 200 customers and growing.

    This is a long term business with plenty of room for growth.
     
    Upvote 0
    M

    MH1

  • #11
    I think for yourself to consider selling as a franchise any potential investors would wish to see at least a couple of years successful trading under the franchise model, preferably 3-4 years.

    That said if you can find potential investors you might be able to attract some with a low initial fee on the basis they are helping you establish your franchise, not my area but a good franchise should not be afraid of replication, either by your company or anyone else.

    After all, franchising is replication of the same business model.
     
    Upvote 0
    C

    Chris Ashdown

    Free Member
    • Dec 7, 2003
    13,389
    3,006
    Norfolk
  • #13
    You need the ability to pick people who have both the money to buy in and also the ability to learn the trade

    You need to have a full set of instruction manuals for them to follow

    You need to be able to convince them that they can make a good living from it and trust you for their marketing etc

    You need to spend lots on solicitors making up legal agreements, defined area's of operation and where they buy their exquipment from

    You need someone to make sure they keep up the standards you specify

    Is the figure you quote turnover or net profit
     
    Upvote 0
    P

    Pete31

    Free Member
    Oct 7, 2010
    84
    14
    Kent
  • #14
    your main problems are as follows:

    I dont think anyone here can quite belive how well you have done...unless your reference to the 'pet industry' is to use said pets in the smuggling of drugs. i am not inferring that you havent acheived what you have said...just that when something sounds to good to be true..etc etc

    secondly, you want people to buy into something that has no proven history...one months trading, no matter what the figures doesnt count as a trading history.

    if i were you, id carry on trading for yourself, build it big over the next few years then sell it off for a massive profit, retire, live in the bahamas and have dancing girls serve you vodka over ice all day long.
     
    Upvote 0
    C

    codltd

  • #16
    Chris Ashdown said:
    You need the ability to pick people who have both the money to buy in and also the ability to learn the trade

    You need to have a full set of instruction manuals for them to follow

    You need to be able to convince them that they can make a good living from it and trust you for their marketing etc

    You need to spend lots on solicitors making up legal agreements, defined area's of operation and where they buy their exquipment from

    You need someone to make sure they keep up the standards you specify

    Is the figure you quote turnover or net profit
    Click to expand...

    Its turnover, however the costs to us is about £25 per month per employee.
     
    Upvote 0
    N

    nathan@innovateconsulting

  • #17
    If its easily repeated/copied to the point where you can't give any details here, the only thing you can offer to a franchisee is your brand/customer loyalty/recognition.

    If you've only been trading 4 weeks, then a strong brand/customer loyalty/recognition is going to be extremely limited.

    If its easy to copy, and it's not a well known brand, then what value will someone get from giving you money?
     
    Upvote 0
    C

    codltd

  • #19
    Pete31 said:
    your main problems are as follows:

    I dont think anyone here can quite belive how well you have done...unless your reference to the 'pet industry' is to use said pets in the smuggling of drugs. i am not inferring that you havent acheived what you have said...just that when something sounds to good to be true..etc etc

    secondly, you want people to buy into something that has no proven history...one months trading, no matter what the figures doesnt count as a trading history.

    if i were you, id carry on trading for yourself, build it big over the next few years then sell it off for a massive profit, retire, live in the bahamas and have dancing girls serve you vodka over ice all day long.
    Click to expand...

    Thanks for the advice. oh an no i am not smuggling pets lol....all legal
     
    Upvote 0
    L

    lyndonio

    Free Member
    May 11, 2011
    22
    1
    Blacburn
  • #20
    What a time waster you say you are interested in selling your amazing business as a franchise? You have been trading four weeks lmao come back in 3 years! You say each employee costs £25 per month are you kidding? Stop being so vague and people might take you seriously. As previously stated if its so easy to replicate why would people pay you any money.
    JOKER!
     
    Upvote 0
    C

    codltd

  • #21
    lyndonio said:
    What a time waster you say you are interested in selling your amazing business as a franchise? You have been trading four weeks lmao come back in 3 years! You say each employee costs £25 per month are you kidding? Stop being so vague and people might take you seriously. As previously stated if its so easy to replicate why would people pay you any money.
    JOKER!
    Click to expand...

    As I said before if you are interest seriously then pm me for a private discussion on this. If you dont believe the figures i am quoting then that fine by me.

    Oh also I started this business with less the £500
     
    Upvote 0
    C

    codltd

  • #23
    Chris Ashdown said:
    9 long term contracts a working day means you must be the worlds best sale person to get these on say under a hour a day, then also doing the paperwork and so on, most impressive

    Sorry Del boy, but something smells a bit rotten somewhere
    Click to expand...

    We advertised on groupon and got ALL our customers in a 24 hour period

    Also ALL paid up front for the full year...
     
    Last edited by a moderator:
    Upvote 0
    Log in to reply

    Latest Articles

    Top Bottom
    Community
    Articles
    Menu