According to the Cambridge English dictionary, a franchise is:
In layman’s terms this means that a “franchisee” pays a company (franchisor) for training. They can then use the company’s name, logo, branding and systems to create their own business in a specified geographical area.
Success is not a guarantee for any business. It is estimated that in their first year 21.5% of businesses will fail. 30% of those that do survive will not make it to the end of their second year. By the end of year 5, 50% of the remaining business will have failed. Fewer than 30% of those remaining will make it into their 11th year. If 100 new businesses were started this year, statistically, in 10 years-time, only 8 of those businesses would still be surviving.
However, by joining a franchise rather than starting your own business from scratch means that the founder has already got in place systems and experience which will help to prevent the reasons these businesses failed from happening.
Less than 4% of franchises will fail each year and most are profitable within the first two years, is the prediction.
The idea of franchising dates back many years, but possibly the most talked about and most successful franchise is McDonalds. McDonalds started originally as a hamburger stand in 1954. By 1955, Ray Croc opened the first McDonalds Franchise. Recognising that their systems could be easily replicated and sold, thus giving others the ability to create their own successful burger business.
However, not every franchise is a success.
There are 4 key reasons why this is probably the case:
- The franchisee doesn’t have the key skills to operate the franchise. Even though due diligence should have been carried out by both parties in advance.
- The franchisee doesn’t have the working capital to operate the franchise. Lack of money can be counteracted to a small extent by additional effort in some cases. In the early days getting the company name /brand out there takes time and money.
This leads on to number
- 3. Many franchisees think that taking on a franchise is an easy option. Laying the money on the table they think, offers a guaranteed success. Sadly, this is not the case. If it was easy “everyone would be doing it”. Starting any business takes hard work and dedication. (That is why it is so important that you choose to buy into a business you are passionate about).
- 4 .A franchisor fails to give the franchisee the necessary training.
About the author:
Dawn Strachan started Clara James Tutoring in 2012. With no experience in running a tutoring business she took her experience from working for 12 years in education (specifically with early years and special needs children) and her own experience as a parent and asked what would the best tutor in the world do?
This was the formations of the Clara James Tutoring Franchise. Inevitably there have been bumps and curves along the way. Each year the company works hard on growing a reputation for excellence and in part has achieved this through nominations as finalists in National Entrepreneurial Awards in 3 consecutive years.
This attitude is what is taking the company from strength to strength. The goal: to become the “Go To” tutoring business for those who genuinely care and believe learning doesn’t have a one style suits all solution.
To learn more about becoming a Clara James Tutoring Franchisee click here