Making the transition from employee to franchisee


Feb 10, 2017

People purchase franchises for many reasons – they have a redundancy package, they can’t get a job, they are fed up with their current role or they simply have excess savings to utilise. Whatever the reason, the underlying rationale always remains the same: they want to be in control of their own destiny.

With less ‘traditional’ job security available, employees are recognising the increasingly lucrative opportunity to not only join a successful and established brand but to build and manage a business of their own. With this in mind, it’s no surprise that there’s been a 20 per cent increase in franchise employment over the past 5 years.

According the BFA, in January 2013 the total number of people employed in franchising in the UK was 561,000, there were also 930 franchise systems in operation. So whether you’re looking for a complete change of direction in your career or want to use existing knowledge or experience to build a successful franchise, the franchise business model’s one size really does fit all.

Let’s firstly look at the benefits for the franchisor. The initial franchise fee can be used to invest in the core business to provide structure and support for the franchise network.    Many franchisors will also charge a monthly management or marketing fee to cover all of the on-going support available to sustain long-term business growth. In Bartercard's case, for example, part of the initial fee goes towards world-class residential training and on the ground training and support. Bartercard does not charge a marketing fee but takes a percentage of the on-going member trading fees so that the franchisee only pays in line with his business growth.

The franchisee benefits from working with a national or international brand, utilising the support and skills afforded by its experience, but with the knowledge they still have their own business. For example, an established national or international brand offers the recognition and structure to provide a great start for any new franchisee. If the name above the door is well known, it will be much easier to win business.

However, it’s not just about the brand name. Individuals looking to become a franchisee should also find out what support is made available from the franchisor. Things like marketing, financial and operational systems are often already in place allowing the new franchisee to concentrate on developing the business. In order to market the business, does the franchisor deliver any online marketing or public relations support? What defined processes are in place and how can these help franchisees adapt operating procedures? What help will be available to guide you through all the aspects of your new business?

Franchisors may vary in many ways but they are all in a position to provide support to new franchisees. This is key factor in choosing the right franchise, and franchisees must establish exactly what is provided, or risk losing out on business and marketing opportunities – factors that could make or break any new business.

Taking the next step – the big transition

For most people who make the move from employee to franchisee, the first challenge they will face is coming to terms with the change from following a set routine dictated by someone else – their employer – to a life where franchisees must create their own routine and manage their own time. The freedom is nearly always welcomed, but many will find it challenging to adapt in the initial transition period.

During this time, the number one concern for those making the transition is access to resources. Many franchisees are a one-man band, which comes with its own unique challenge of learning how to balance winning new business, servicing existing business and completing the admin required to keep the business running. It’s an ongoing challenge that most business owners have to master. For example, if too much time is spent looking for new business, the franchisee could actually be neglecting the business it already has resulting in lost income and unhappy customers.

Another dilemma is that many franchisees have not necessarily come from a sales background, so what should be one of the most important aspects of their business is the one thing most alien to them. Attending networking groups, and simply networking in general, can be a daunting task if you’ve never done it before but ultimately; it’s what your business will need.

Another factor to consider is time management. As an employee, regulated working hours offer a set and disciplined regime to stick to. Your working hours and the responsibilities of your role are clearly outlined when you join an organisation. When you become a franchisee, you become your own manager – you’re in control of your own destiny, which takes focus and discipline. This is a particular problem in home-based franchises where it’s too easy to say ‘It won’t hurt if I just take a long lunch break or pause to finish a household job.”

The final thing to consider is managing the financial and administrative sides of the business. Once again, most franchisees will have no experience in this area, although help in these areas is much easier to find. Many franchisors will have financial or business plan modelling and a simple accounts system such as Sage or Quick Books that makes running the financial side of the business much easier than it used to be.

In summary, when making the transition from employee to franchisee the most poignant challenge to conquer is perhaps making the initial adjustment to a completely new way of working – but this is something you won’t have to conquer alone – among the best franchisors, help and training is readily available to ensure the new franchisee has everything they need.

While transitioning between employee and franchisee may have it challenges, to establish your own business, make a profit and be provided with the opportunity to control your own destiny - there’s no feeling like it. So, if you’re unhappy at work, want to be your own boss, want a better work / life balance and to take control of your daily life, the chances are becoming a franchisee is the job you’ve been looking for.

For more information on the Bartercard Franchise, visit their Franchise Expo listing