Franchising my company, any advice?
Discussion
Hi there, I run my own valeting business and currently have 3 members of staff and 1 van on the road, soon two vans of my own!
i was approached a few days ago by someone i know who is moving to Exeter and wants to consider a franchise of my business!
I this was always mt ultimate aim but this is sooner than planned!
I was thinking £XX upfront then £xx a month for a min 3 years
They would get brand new van, signwriting, equipment, website, buisness cards, uniforms, leaflets, all insurances, training and constant help and support from me on call.
questions:
1.Due to finance of van and threat of them starting up on their own how easy is it to tie someone into a contract for £xx a month for ? years like a mobile contract ect?
2. How can I diswade them from just starting up on their own once I have trained them ect (even years down the line)
3. ill think of more and ask tomorrow
i was approached a few days ago by someone i know who is moving to Exeter and wants to consider a franchise of my business!
I this was always mt ultimate aim but this is sooner than planned!
I was thinking £XX upfront then £xx a month for a min 3 years
They would get brand new van, signwriting, equipment, website, buisness cards, uniforms, leaflets, all insurances, training and constant help and support from me on call.
questions:
1.Due to finance of van and threat of them starting up on their own how easy is it to tie someone into a contract for £xx a month for ? years like a mobile contract ect?
2. How can I diswade them from just starting up on their own once I have trained them ect (even years down the line)
3. ill think of more and ask tomorrow
Aside from getting real lawyers to provide advice the key to franchising is to sell the franchisee all the goods they need to do the work.
In the case of a valeting franchise that means selling the franchisee the buckets, sponges, soap, cleaners, wax, chamois and drying cloths.
It may not be important for the first franchisee, but when you have 20 and one turns out to be a problem if they have broken the franchise you can get rid of them.
I'd buy a Dalton's Weekly and look at how the numerous franchise companies out there structure their deals for franchisees.
I'd also avoid charging them for the van. Make them buy / lease their own. You don't want to be paying for somebody else's failure. They are paying you money for your winning formula and the risk should be on them, not you.
In the case of a valeting franchise that means selling the franchisee the buckets, sponges, soap, cleaners, wax, chamois and drying cloths.
It may not be important for the first franchisee, but when you have 20 and one turns out to be a problem if they have broken the franchise you can get rid of them.
I'd buy a Dalton's Weekly and look at how the numerous franchise companies out there structure their deals for franchisees.
I'd also avoid charging them for the van. Make them buy / lease their own. You don't want to be paying for somebody else's failure. They are paying you money for your winning formula and the risk should be on them, not you.
I don't mean any disrespect,it's more curiosity really...why would anyone want to pay you to work as a valeter in a location remote from where you are based? It's not as if you are a large household name,or have a successful business well known in Exeter,what's the attraction for him to franchise rather than go it alone?As I said no disrespect meant.....just curious...
esselte said:
I don't mean any disrespect,it's more curiosity really...why would anyone want to pay you to work as a valeter in a location remote from where you are based? It's not as if you are a large household name,or have a successful business well known in Exeter,what's the attraction for him to franchise rather than go it alone?As I said no disrespect meant.....just curious...
My thoughts too....Again, no disrespect intended..
..but what's to stop [/b]anyone[/b] going out buying a van, bucket, wash leather, shampoo, tyre wall black and a bit of fancy turtle wax........I can understand it with something like snap-on tools maybe, because at least you are buying into a BRAND......Listen carefully, I will say this only once...
I bought a franchise.
The franchisor got it wrong and the venture went tits up.
I, and about six other franchisees, sued the franchisor to recover our losses.
It cost the franchisor £5,000,000 in compensation and our legal fees. It also cost him his own legal fees, which are unknown.
Be very careful...
I bought a franchise.
The franchisor got it wrong and the venture went tits up.
I, and about six other franchisees, sued the franchisor to recover our losses.
It cost the franchisor £5,000,000 in compensation and our legal fees. It also cost him his own legal fees, which are unknown.
Be very careful...
GavinPearson said:
Don't forget that McDonalds was originally one 'restaurant', as was KFC. Dominoes was originally one pizza shop. But they have all been incredibly successful. There is no reason that this valeting business shouldn't be successful in a similar way.
I don't think anyone is saying differently...just wondered what the USP was for this valeting company..what are they doing differently that would make it wothwhile paying the franchise fee?For many franchisee it's not necessarily a USP they're after. A franchise offers backroom support and access to marketing material, suppliers etc. Ok, so you can do all this yourself, but not everyone wants to.
I see franchises where the franchisor makes money, where the franchisor makes money, where they both make money and also where neither make money. Like most business proposals it's all about going in with your eyes open, a decent set of agreements governing how things will work, a lot of hard graft and a little bit of luck.
edited to correct typo's - damn phones and fat fingers
I see franchises where the franchisor makes money, where the franchisor makes money, where they both make money and also where neither make money. Like most business proposals it's all about going in with your eyes open, a decent set of agreements governing how things will work, a lot of hard graft and a little bit of luck.
edited to correct typo's - damn phones and fat fingers
Edited by therealpigdog on Tuesday 14th April 11:22
As I looked into buying a valeting franchise a while ago, I will ask you the same question a well respected business owner near me aske me before I stumped up a large wad of cash...
What do you get from the franchise that you cant get by buying your own van and purchasing the products from Autosmart or similar.......
There are a lot of valeting companies who think because they are successful they could franchise and earn loads of money, when in real terms it is 'them', the franchisor, that is successful and not the business model.
What do you get from the franchise that you cant get by buying your own van and purchasing the products from Autosmart or similar.......
There are a lot of valeting companies who think because they are successful they could franchise and earn loads of money, when in real terms it is 'them', the franchisor, that is successful and not the business model.
GavinPearson said:
Don't forget that McDonalds was originally one 'restaurant', as was KFC. Dominoes was originally one pizza shop. But they have all been incredibly successful. There is no reason that this valeting business shouldn't be successful in a similar way.
Yes but dont forget at the time, there weren't many competitors in the same sector and certainly not expanding at the rate that Ray Kroc franchised McDonald's at...To bring it up to date, would anyone who owns a fast food burger house/ kebab house seriously consider franchising teir business?
IMHO there are too many valeting franchises out there offering not much, to choose from considering.
KevF said:
GavinPearson said:
Don't forget that McDonalds was originally one 'restaurant', as was KFC. Dominoes was originally one pizza shop. But they have all been incredibly successful. There is no reason that this valeting business shouldn't be successful in a similar way.
Yes but dont forget at the time, there weren't many competitors in the same sector and certainly not expanding at the rate that Ray Kroc franchised McDonald's at...To bring it up to date, would anyone who owns a fast food burger house/ kebab house seriously consider franchising teir business?
IMHO there are too many valeting franchises out there offering not much, to choose from considering.
Its not just my usp that’s key here it's the:
experience in building and running a successful company from scratch
full training given in the valeting and how to keep land/manage clients
already established company with full website/logo/uniforms/business cards/leaflets
all insurance's supplied
full support forever
ect
I think the second thing I will be trying to make clear is to start up your own from scratch to the level I did I had to spend 5K initially (logo design, website design, van sign writing, equipment, ect) and the insurance alone is about £300 a month for a policy
It will only cost me about £50 more a month for insurance to add another van/driver on so I can pass these savings onto the franchisee
I am only talking like a 3k start up fee and about 700-800 a month (atm my current van is earning circa 3k a month)
this includes uniform/sign writing/all equipment/business cards/leaflets for the full duration of contract as well as my experience and time!
experience in building and running a successful company from scratch
full training given in the valeting and how to keep land/manage clients
already established company with full website/logo/uniforms/business cards/leaflets
all insurance's supplied
full support forever
ect
I think the second thing I will be trying to make clear is to start up your own from scratch to the level I did I had to spend 5K initially (logo design, website design, van sign writing, equipment, ect) and the insurance alone is about £300 a month for a policy
It will only cost me about £50 more a month for insurance to add another van/driver on so I can pass these savings onto the franchisee
I am only talking like a 3k start up fee and about 700-800 a month (atm my current van is earning circa 3k a month)
this includes uniform/sign writing/all equipment/business cards/leaflets for the full duration of contract as well as my experience and time!
The big risk you take is the failure of franchisees.
You might take on several, and none of them make a go of it.
If this happens, and they convince the Court it's your fault, it will cost you dearly in terms of compensation.
There might be some kind of insurance to cover such an eventuality.
You might take on several, and none of them make a go of it.
If this happens, and they convince the Court it's your fault, it will cost you dearly in terms of compensation.
There might be some kind of insurance to cover such an eventuality.
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