BFA News Sept/Oct 2008
Monthly News Program produced for the British Franchise AssociationNational Franchise Exhibition
The National Franchise Show, being held at the NEC in Birmingham is fast approaching. Being held on the 3rd and 4th of October, the exhibition provides an ideal opportunity for attendees to better understand the opportunities available in franchising; whether investing into an existing franchise brand or franchising an existing business. All will be able to see a range of bfa member brands, from the more hands-on operations to many management franchises; across many different industries and requiring many different skills and qualities.
This two day exhibition is the largest franchising show of its kind and provides many opportunities to hear from experts in the industry, meet existing franchise owners and gather new insight into this dynamic and valuable business model. Go to the bfa website at www.thebfa.org to register for your tickets.
Franchisee of the Year Awards
The winners of the Franchisee of the Year Awards will be announced at a glittering black-tie gala dinner at the International Convention Centre (ICC), in Birmingham, on 2nd October.
Cheques for £5,000, £3,000 and £2,000, courtesy of HSBC, will be presented to the Gold, Silver and Bronze Winners at the awards.
Brian Smart, Director General of the bfa, said: "These prestigious Awards celebrate the UK's best franchisees. This year it was harder than ever choosing the national finalists and they are all a great example of how focus and drive, when supplemented by the support of a franchisor, results in the growth of a sustainable and profitable business."
The following businesses are all finalists in the awards and are in with a chance of winning:
Frank Sutherland of Autosmart International
Lisa Tobias of Domino's Pizza
Trevor Conduit of Dream Doors
Jenny Boreham of Fastsigns
Mark Richards of McDonalds
Neil & Lorraine Stapleton of Oscar Pet Foods
Craig Harrison of Pirtek UK
Angie Baynes of Venture UK
Christina Kemp of Western Provident Association (WPA)
Franchising: a success story in today's economic uncertainty (may need to be cut down, but would be nice to have included)
Franchise businesses across the country are reporting not just survival stories, within this time of economic uncertainty, but real success stories; further underpinning the belief in the industry that franchising is one of the most successful and resilient business models in the UK.
Brian Smart, director general of the British Franchise Association (bfa), said: "The 2008 NatWest/bfa survey, published at the start of the year, showed that the number of franchise networks had increased year on year for the last 15 years and in the last year has seen its economic contribution grow at nearly five times that of the national GDP growth (15% economic growth in franchising against a 3.1% GDP growth)."
"With the focus and hype surrounding the economic condition of the UK over more recent months, we felt it was important to hear the voice of the actual businesses today; what they think; how their businesses are operating. The result was a resounding story of success and resilience."
Andy Hirst, head of franchise development of Dominos Pizza Group Ltd, agrees: "In contrast to the economic gloom we're still doing very well and last month reported record double digit sales growth in our half year financial update. We're on track to open our target of 50 new stores this year, and franchisees keep snapping up our exciting new business opportunities. The tried and tested formula of a franchised business offers a welcome safety net, when coupled with a quality product offering and a strong brand."
Mark Lemmon, chief executive officer of Cash Converters, has seen the recent months as a very positive time: "Cash Converters have opened between six to eight stores a year for the last five years and this shows no sign of slowing down, in fact quite the reverse as existing franchisees see the rewards of the business and open additional stores. Key performance indicators have grown steadily for the last seven years and this continues to be the case this year with retail sales remaining in strong positive growth on a true like for like basis."
Even relatively new businesses are succeeding as franchises in this market; Trevor Brocklebank, managing director of Home Instead Senior Care, said: "We only began franchising in the UK and Ireland in 2006 and already have 38 offices across the region. Combined they produced monthly revenues in excess of £1.5m in July 2008. This is more than double the £672k achieved in July 2007. Demand for franchises is strong; ten new owners have joined in 2008, with another four preparing to open for business. In a tight economy, the quality of the business model is critical."
Identifying one of the key advantages of franchising Nigel Toplis, managing director of Recognition Express added: "Franchising has proven to be, by anyone's measurement, successful at launching and sustaining profitable business. The NatWest/bfa Survey of Franchising for 2007 research concluded that 93% of all franchises were profitable after two years compared to the extraordinary fact that four in five non-franchise businesses fail within two years. The very essence of a franchise of course is that you can access the knowledge, the key areas of best practice, the tools and training. Franchising is about being in business for yourself, not by yourself."
Mr Smart concluded: "We found, with research carried out in recent years; given the choice, twice as many customers would prefer to use a franchised outlet over a non-franchised outlet. This local business system, with national business support is a real success story and we expect to see the trend continue."
The bfa continues to support and accredit good ethical franchising across the UK; providing new business opportunities and economic growth.
News from Brussels (nice to have, but not essential)
As the voice of franchising for the UK, the bfa continues to work relentlessly on behalf of the UK industry on both the European and world stage.
More recently the bfa has been defending the needs of UK franchising over the possible revision of the Block Exemption Regulation for Vertical Agreements. Put in place in order to enable franchised and other kinds of business to operate within the restrictions of European competition law, it is currently under review before its next edition from 2010. The danger is that certain revisions could hinder the way in which franchisees, within the same network, are protected and prevented from competing against each other and against the franchisor's brand. Such changes could spell the end of franchising as we know it. Even relatively minor changes in these rules can cause the network as a whole to work less efficiently and therefore become less successful.
Brian Smart, director general of the bfa, who is representing the UK's interests in this matter, sees this as something that the UK can not allow changes on without the proper input. Mr Smart explains: "the Block Exemption Regulation for Vertical Agreements is an integral cog in the franchising machine and to allow this to change, could fundamentally alter all franchise agreements. The bfa now has a key role to play in making sure that our continued work in Brussels fully represents the needs of UK franchising and secures the 2010 revision as we need it."
Mr Smart will continue to work with other experts from across Europe as part of this review of the regulation. Further details on the progress of this will be published in Business Franchise magazine and on the bfa website later in the year.
Who's new at the bfa? (Can use if space permits â€" not essential)
During 2008 the bfa has seen a few changes, including its office move to Oxford from Henley. It now welcomes Tom Endean to the bfa as marketing manager to continue and develop the important work that has been done on promoting franchising as a business concept and evolving the bfa's communications with its members.
Tom Endean said: "I see franchising as a real success amongst many other business models that have stood still in comparison. Franchising continues to grow and gather profile, which I am enthused about supporting and driving further. To come into an organisation, which is so highly regarded, not just within the UK, but on a global scale, is a real honour."
Mr Endean's appointment follows a couple of other changes within the staffing structure of the bfa. Andrew Quail, who had been with the bfa as Head of Business Services for three years and has a 27 year track record within the franchising industry, has been confirmed as head of quality standards and compliance, ensuring the continued security and adherence to the strict ethical standards of the bfa. Mr Quail said: "The reliance on upholding and monitoring the bfa's standards base is increasingly important as franchising grows and as the Association and its members work to maintain their business reputation in the press and with UK and European legislators. The developments envisaged in our consultative document for a new strategic direction with a broader-based franchise constituency, highlights the role of standards and compliance management".
Pip Wilkins, who has been with the bfa for the past nine years, has now been appointed as business development manager. Pip will concentrate on helping the bfa members to fully utilise and benefit from their membership as well as increase the number of members within the association. Ms Wilkins said: "During my time at the bfa I have held varying roles, but I am delighted that I am now able to concentrate so closely on further building the relationships with our members."
