The franchise formula
ADVENTURES IN FRANCHISING: Frank Sutherland has embraced the franchisee route with open arms, achieving steady success
Thursday March 12 2009
WITH many people considering their next move after redundancy, starting a business could be a viable option. If this is too daunting a prospect, however, then taking on a franchise may be the perfect solution.
Generally, people who enter into a franchise agreement tend to be more successful in the first few years than those who start a company from scratch.
Frank Sutherland is a franchisee with Autosmart International, a supplier of vehicle cleaning products to the trade. The organisation has over 100 franchises across Ireland and the UK.
“I joined Autosmart because it’s a tried-and-tested business, and has been on the go for 20 years. Aligning with a franchise like this takes the risk out of starting a new business because you already have a successful business model, which gives you more security,” he says.
But how do you know if a franchise is right for you? Anybody considering entering a franchise should, firstly, think about what it is they like and what their interests are. It’s better to opt for a business for which you have enthusiasm. Crucially, you should also look at the size of your budget.
Examining the financials of a franchiser is vital. You should do a thorough background search, and ensure the franchise has enough money to support you and supply you with the product when you need it.
“With Autosmart, I was invited to its operation, shown around and given complete access to existing franchisees. I was able to speak to them about their business,” explains Sutherland.
He says it’s important that a franchiser puts as much effort into recruiting good franchisees as one puts into finding a good franchiser.
“Autosmart interviewed me as much as I was interviewing it because the franchiser wanted someone of a good calibre who was going to come in and care about the business.”
Once you’ve decided on a particular franchise, you should go and meet as many franchisees as possible before signing any contract. Sutherland says openness and transparency within the franchise network goes a long way.
“Ensure you’re going to have the support. The way to guarantee that is to have complete access to the franchisees.”
He says you shouldn’t be afraid to ask those potential fellow franchisees questions such as if the product arrives on time, how the training was given, or if they are getting enough return on their investment.
If a franchiser isn’t willing to give you a complete list of its franchisees, then this signals warning bells.
Now in his third year with Autosmart, and based in Aberdeenshire, Sutherland hasn’t looked back. He joined the franchise when he was made redundant three years ago, and used his last £10,000 sterling and a bank loan to fund it.
In the past year, Sutherland has grown his sales by 135pc. When he started the franchise, he earned in the region of £65,000 sterling a year, and this year he hopes to earn £125,000 sterling.
There are a number of things franchisees should expect for their money, and first and foremost a legal agreement, which is on average for 10 years. Training is also vital. All franchisees should receive an operations manual, which will act as their bible, telling them how to run the business in detail.
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- Linda Daly
