Coffee Franchise UK – Should You Invest in a Coffee or Coffee Shop Franchise?

January 18, 2019

Saturated market that’s got no room for new players, or a crowded canvas ripe for innovation? Let’s see what buying and running a Coffee Franchise UK is all about.

Coffee has never really been the beverage of choice for Britons. We’ve always been more of a ‘tea’ people.

The historical trade connections to tea growing parts of the world are – quite naturally – at the heart of the quintessential British love for a piping hot cup of afternoon tea. Coffee never really was able to break that ice and end up becoming a socio-cultural phenomenon in the UK, as it did in the US.

But that has been fast changing, especially since the 90’s.

It would be hard today to find a restaurant or café that doesn’t serve coffee. In fact, a quick look around – especially at the younger demographic – tells us that coffee is in.

Coffee franchises, coffee shop franchises and even café franchises have a lot to do with this mini coffee revolution. In this post, we’ll see what buying a coffee franchise in the UK means in the current economy and what would-be franchisees need to know about the relative downsides of owning one.

Is There Enough Room for More UK Coffee Franchises?

Like we always do in our franchising blogs, we’ll start this analysis with a brief look at the market itself.

Coffee Franchise UK

Number of coffee shops in the UK (2007-2017)

  • The coffee market in the UK has been growing steadily in the last ten years. In 2008, the estimated coffee consumption in the UK was approximately 70 million cups a day. The same number grew to 95 million cups a day in 2018 – a 35% rise over ten years.
  • Instant coffee used to be the staple for coffee lovers in the UK. That has been changing – most coffee drinkers in the UK now give as much importance to the ‘coffee experience’ as to their coffee.
  • The coffee habits are evenly spread across all age demographics.
  • Britons spend over £9 bn each year on coffee shop visits.
  • 81% of adults are estimated to visit a coffee shop at least once each week. This rate of return visits is, in fact, one of the major factors behind the success experienced by coffee businesses.
  • There are close to 25,000 coffee shops spread across the UK. Of these, roughly 40% are branded chains, most of which can be safely assumed to be franchise units.
  • By 2022, the number of coffee shops in the UK is estimated to cross the 30,000 mark, with the annual industry turnover estimated to touch £13 bn.

Considering these stats, it’s clear that the idea of running a coffee franchise or a coffee shop franchise does deserve to be taken seriously.

At the same time, it’s important to consider a few negative points brought about by the present market situation:

  • The coffee shop market poses some unique challenges to new franchisees. The top 3 branded chains – Costa Coffee, Starbucks and Caffé Nero –take up more than 50% of the market share.
  • Only about 10% of overall coffee consumption can be attributed to coffee shop or café visits. Looked at from another angle, this can also mean that there’s huge potential for growth.

Sources: Independent, Statista, Convenience Store UK, World Coffee Portal

UK Coffee Shop Franchises – What Makes Them Tick?

Before we get to the franchising aspect of coffee businesses and coffee shops, let’s take a moment to understand why this particular industry has managed to post some of the best growth rates over the past few years.

Firstly, it must be appreciated that coffee is more than just a beverage – it’s a global phenomenon. You’ll meet equally passionate champions for as well as against coffee, as far as its productivity effects and long-term health impacts are concerned. One thing, however, cannot be denied – coffee is the go-to drink for millions of Britons, especially at workplaces.

“Apart from being a bona-fide productivity booster for many, coffee has also gained unquestionable dominance through a peculiar social angle. Whether it’s a date, a casual meeting or a business appointment – people like coffee to be the proverbial ice-breaker.”

Combine both these aspects and you get a step closer to understanding why coffee franchises have been doing great.

Recommended: Fast-Food Franchises Are Doing Great. Here Are 10 Thing You Need to Know About Them.

Does Your Coffee Franchise UK Offer a ‘Coffee Experience’ or Just Coffee?

As we mentioned earlier, we have come a long way from having to make do with soulless, cheap and – in all honesty – horrid tasting instant coffee. You won’t find many cafes or coffee shops serving those anymore.

But, why?

The answer is simple.

Regardless of the niche you want to be in, people expect their cup of coffee that costs anywhere between £2 to £5 to be a wholesome, rewarding experience. So, if you’re a coffee shop wanting to franchise, make sure you’re offering the best value combined with the best experience (if you aren’t already), otherwise there’s really nothing new you’d be bringing to the table.

If you are a would-be franchisee looking to invest into a coffee franchise, make sure your franchisor shortlist contains names that tick this box.

How Much Does a UK Coffee Franchise Cost?

Among all franchise business sectors out there, food and beverage franchises probably have the widest cost spectrum.

As far as coffee or coffee shop franchises go, the cost depends predominantly on two factors:

1. The Brand Name

The value of the franchisor’s brand plays a huge role. If you want to buy a franchise from a world-renowned brand like Starbucks, you will need to shell out hundreds of thousands of pounds in initial investments. More importantly, your investment potential, on its own, cannot still guarantee that you’ll really be able to own a franchise in such cases.

Of course, running a franchise under a brand that’s synonymous with coffee itself has its benefits. We would go so far as to say that buying a franchise under a well-established brand can take a whole lot of marketing hassle out of your way.

2. The Industry Niche

This will also have a telling impact on how much you’ll be paying to get started with a coffee franchise.

If the franchise is a new-age, out-of-the-van mobile coffee business, it’ll cost you – on an average – to the tune of £20,000 to £40,000. On the other hand, a location-based coffee shop franchise will cost you significantly more (upward of £50,000). Moreover, coffee shop franchises have other overheads like rent to worry about.

Coffee Shop Franchises Must Innovate

As we have already mentioned in the market review, there are over 25,000 coffee shops spread across the UK. This doesn’t even cover for all the other restaurants and cafes that serve coffee as a part of their menu.

So, how does one get noticed in such a seemingly overcrowded market?

Well, as usually is the case, the answer lies in innovation.

To succeed as a coffee franchise owner, you’ll need to make sure that you choose a franchise business that offers something unique. Here are some ideas that may be worth thinking about:

Menu Innovation – From Mundane to Exotic

Of all the coffee franchises that exist in the UK, many are young businesses built exclusively on menu innovations.

This applies even more prominently to businesses that operate exclusively in big cities.

Along with the generic, standard cup of coffee, businesses that offer new, exciting, innovative flavor varieties have a significant competitive edge. From the mysterious Hawaiian Kona to exotic Guatemalan El Injerto, coffees from around the world are now finding their place on menus across the UK. When buying a franchise, you need to look out for such USPs.

Finding A Lucrative Niche

This is the holy grail of franchise market research.

If the niche you zero in on doesn’t have much to offer, it’s always going to be a tough ride.

Think about this – it may make sense to run a mobile coffee franchise in a busy business district, but it would be almost pointless to do the same in a sleepy retirement village. In that sense, it becomes extremely important to mould your niche to the location you want to operate in or the territory you want to claim as your own.

Focussing on the Coffee Experience

Coffee franchises that aim to offer a complete coffee experience are usually the ones that win the race.

This isn’t to say that on-the-go coffee franchises that offer cheap coffee don’t make it – they certainly do. But, the ideal locations for such franchises are only a handful. These are also businesses that people visit only when they need to.

Instead, by investing a little more, if you could build a coffee shop franchise unit that offers a great social setting where people want to go, it could well be the recipe for great success.

Food Matters!

Coffee shops that serve nothing but coffee form a great niche. However, they are becoming a rarer sight every year.

Cross-selling and up-selling food items as complements to a cup of great tasting coffee is a trick that works more often than not. Just think about the times when you’ve ordered a biscotti or a shortbread to go with your tall frappe at Starbucks!

The point is this – when you’re looking for coffee franchise opportunities, it’s important to weigh the brand name, the business model and the USPs to arrive at an actionable conclusion.

Recommended: Pros and Cons of Running a Franchise Business – A Must Read for First-Time Franchisees

Types of Coffee Franchise UK

Here are some of the most common coffee franchise types that you can classify franchise opportunities into:

A. Coffee As A Commodity

These are a hit among the urban demographics. Gourmet coffee franchises work just like other retail franchise businesses. If you can combine unique products with a great location and prop it all up with a good deal of marketing, such franchises can be profitable investment opportunities.

B. Dedicated Coffee Shops

Among all coffee franchises, these seem to be the most common. To make a coffee shop franchise unit successful, it’s important to get two things right – a franchisors that offers unique flavors and a location that experiences heavy footfall.

C. Café Franchises

A strategic retail location combined with a range of menu items is the key here. Café franchises don’t focus exclusively on coffee.

D. Mobile Coffee Vans

In a large enough city, mobile coffee van franchises can secure steady business. These franchises are usually the lowest priced and worth considering if you can match the rigours of the job.

Recommended: The Only Franchising Checklist You’ll Ever Need. Download for FREE Now!

Top Coffee Franchises UK

To give you an idea about what they bring to the table, here’s an overview of some of the most popular coffee franchises UK*.

1. Coffee-Bike

  • Minimum Initial Investment: £7,490 (plus VAT)
  • USP: Coffee on a bike for events, gatherings and other occasions
  • Eco-friendly bike
  • No monthly fees, fixed royalty per sale
  • Full barista training
  • Over 250 units in operation

2. Cafe2U

  • Minimum Initial Investment: £10,000 (plus VAT)
  • USP: Mobile coffee vans
  • Barista training provided
  • Marketing support
  • No royalties
  • Fixed weekly fees
  • Partner income guarantees
  • Associate BFA Member

3. Esquires Coffee

  • Minimum Initial Investment: £85,000 (plus VAT)
  • USP: Retail gourmet coffee brand and coffee houses
  • Store-design and location assistance
  • Full training
  • Ongoing support
  • Equipment provisions
  • Associate BFA Member

4. Really Awesome Coffee

  • Minimum Initial Investment: £9,500 (plus VAT)
  • USP: Mobile coffee vans
  • Thorough training provided
  • Business launch assistance
  • Technical and technological help
  • Low ongoing fees
  • Get started fast
  • Associate BFA Member

5. CoffeeBoy

  • Minimum Initial Investment: £55,000 (plus VAT)
  • USP: New-age café experience
  • Funding assistance
  • Full training
  • Multi-unit operations available
  • Ongoing support

Coffee Franchise UK – The Takeaways

  • Focus on franchises that bring something new to the mix.
  • Market research is extremely important.
  • Draw a detailed business plan for all your shortlisted coffee franchise opportunities.
  • Go with franchisors that offer ongoing support and assistance.

If you run a coffee franchise, we’d love to hear from you. Your insights will help us educate thousands of regular readers who visit our website for free franchising guides.

All You Need to Know About Running a Spa, Beauty & Hair Salon Franchise UK (Health & Beauty Franchises UK)

January 14, 2019

Health & Beauty Franchises UK – If you have the right skill set and temperament, beauty franchises have a lot to offer to you. Here’s all you need to know about beauty salon franchises in the UK.

In our blog, we often talk about various franchise business sectors. This article about spa and beauty franchises comes as a perfect fit for this series – especially given the fact it represents one of the most underrated yet undeniably vibrant section of small businesses in the UK.

Franchising is on the rise – as it has been for years now. A lot of its success is due directly to the fact that the very nature of employment is changing – and changing fast. In the UK, more and more people are looking to be self-employed, with special focus on being an entrepreneur.

The unfortunate part is that the spirit of ‘starting up’ has been somewhat lost on us, thanks to a handful of billion-dollar tech ventures. The fact is – to feed your entrepreneurial ambitions, you don’t always need to blaze a trail or break new grounds. Starting a business of your own that does the same old thing better is often enough.

To understand what we mean by this, look no further than beauty franchises around you. In this post, we will discuss how these franchises work, what sort of investment is required, what goes into making one successful and what potential downsides there exist.

Spa, Beauty and Barber Franchises UK – Crunching the Numbers

As always, our analysis of spa and beauty franchises in the UK starts with some numbers – both good and bad. To keep things fairer, we will consider the overall performance of the industry, rather than limiting ourselves to the franchising aspect of it.

  • The spa, hair and overall beauty industry in the UK is a bigger deal than you think. At an annual revenue of over £4 bn, it forms one of the most important arms of personal care businesses.
  • Being entirely consumer facing, there are obvious struggles associated with the industry. Despite these, the industry has managed to grow steadily at nearly 1.5% each year, over the last four years. This rate is just a few points above the average annual growth rate of the national economy.
  • The number of independent salon, spa and beauty businesses in the UK has also shown similar growth numbers. As things stood in 2018, 34,000 to 42,000 businesses can be counted as a part of this industry.
  • Most of these businesses are small to medium sized, with 70% employing fewer than 10 people.
  • The UK beauty industry employs over 150,000 people.
  • The most interesting stat in this regard – the beauty services industry in the UK is largely localised and fragmented, with no major national players. In fact, the 3 largest UK beauty businesses have a combined market share of less than 3%. This is an extremely promising sign for franchisees who want to run a local beauty franchise.

Sources: Ibis World, NHF NBF

Changing Social Norms and Beauty and Hair Salon Franchises

While discussing various franchise businesses and their potential, we always make it a point to dig deeper than just the numbers.

When it comes to discussing beauty and hair salon franchises in the UK, it’s important to understand how the changing social norms have contributed to the growth. The most promising sign in this regard is the annual spending – UK adults now spend over £6 bn annually on beauty treatments, hair care and other spa services. Much of this surge can be assigned to the penetration of the industry into demographics that would – not too long ago – have been considered off the table.

How Do Hair Salon and Beauty Franchises Work?

Hair and beauty franchises are service providers. While it’s true that many businesses also include products as a part of their offerings to diversify revenue streams, it can’t be denied that the performance of the ‘services’ is the decisive factor in this context.

So, to understand how these franchises work, it’s important to understand how a service-based franchise works.

Let’s outline the three building blocks of service-based franchises.

A. Market Research

One word – important.

We understand that it can be overwhelming for a person not initiated in the world of numbers, data and business to make sense of this – but we strongly recommend that you base all your future franchising decisions on this foundation. A typical hair salon and beauty franchise market research will involve the overview of operational competitors in the territory, assessment of the location, study of the target demographic and a broad-ended profitability analysis.

For example, if you wish to run a beauty franchise in in a major city centre, you may find that the market is already nearing saturation. The way out would be to focus on a non-saturated niche (oriental beauty treatments, for instance). On the other hand, if you want to run a spa franchise in a mid-sized town, you may find that there isn’t a lot of demand for niche services. So, instead, you can focus on doing better what’s working for your competitors. All these ideas will help you narrow your search down for the perfect franchisor.

Recommended: Everything You Need to Know About Franchise Market Research

B. Choosing the Right Franchisor

This can be the most critical step of the entire process. This is also a question we get asked hundreds of times each week from our readers. If you aren’t sure how to go about assessing franchisors on your shortlist, do feel free to check out our free how to choose the right franchise guide.

Once you are certain that there’s a market large enough for a new franchise, you can shortlist franchisors that operate in your area. If there aren’t any, you can ask around to see if any franchisors are willing to enter the territory.

Read and understand what the terms of their franchise agreement are, what their business model is and what sort of training, customer service and marketing support the franchisor is willing to offer. Many hair salon franchises operate on a flat-commission basis per month, with the rest adopting the royalty model. Consult with a qualified business adviser to understand the long-term impact of all options, so that you can strengthen your top line revenue.

C. Running the Business

If you get the first two steps right, this one can be a walk in the park – especially if you have prior experience.

This is not to say that running a hair salon franchise is easy. From the initial marketing difficulties to gradually, organically securing a loyal base of customers – it can be a tricky chase. Important things to remember in this aspect are: hiring well-trained staff, managing overheads, re-investing in marketing (on your own or through your franchisor) and staying innovative.

How Much Does It Cost to Buy and Run a Barber and Beauty Franchise UK?

Considering the franchise fees and the initial spend to get the business off the ground, beauty franchises can cost you a lot.

Of course, this is always subject to the location, and you can always expect to make this money back provided you have got your market research right and your services are top notch.

A conservative estimate after studying dozens of beauty and hair franchise opportunities tells us that you may need upwards of £30,000 in minimum initial investment to get started. This number can go down if you choose a franchise that caters to a specific niche like beauty and hair services for children.

The main outgoings to consider are:

  • Regular operational costs – insurance, rent, utilities, equipment, inventory etc.
  • Staff salaries
  • Franchisor fees (commission/royalties)
  • Marketing expenses
  • Taxes

UK Beauty Franchises and the Importance of Location

Despite being a service-based business, the location is enormously important for beauty and hair franchises.

On this front, these franchises resemble fast-food franchises – the more the footfall, the better the performance.

Therefore, it’s essential for you to explore, assess and compare various locations and territories before you buy a franchise. Ideally, your territory should have a large enough concentration of the target demographic to sustain your business, and your location should be convenient enough for them to visit.

Recommended: The only franchising checklist you’ll ever need. Download now for free!

Do You Need to Be a Licenced Beautician to Run a Beauty Franchise?

Not really. You can buy and run a beauty franchise even when you don’t have the necessary professional licence. You can, however, only allow trained and licenced staff to perform the treatments, while you oversee the business as the owner.

In fact, this is one of the reasons why franchising has grown so rapidly in the UK. You can identify opportunities in an industry that you aren’t personally familiar with, buy the right franchise, hire the right people and run your business towards profitability.

Beauty Franchises: A Perfect Home-Based Opportunity

If you are trained and possess the necessary licences, you can buy a beauty franchise and run the business right from your home.

In fact, as you may have already noticed around you, a large share of local hair salons and beauty businesses tend to be home-based. Running a franchise business from home can help you get started as quickly as possible, while bypassing many overheads that come with renting a dedicated location.

Three Key Factors That Can Make or Break a Hair Salon Franchise

While there are dozens of factors that go into the making or breaking of a business, these are the three prominent ‘pain-point’s for beauty and hair salon franchises in the UK.

A. Money Management

Clueless money management is guaranteed to take a beauty franchise downhill, simply because the business model is highly vulnerable to spending habit fluctuations of people.

So, being judicious while spending is vital. A good strategy can be to re-invest heavily in marketing and services while cutting down on unnecessary overheads, getting out of expensive debts as soon as possible and raising cheaper capital.

B. Skilled and Reliable Staff

Hire staff that bring on board various skills, can be banked upon to offer nothing but high-quality services and are passionate about what they do. Beauty businesses thrive on personal relationships, and your staff should be able to build these with your customers to secure repeat business and improve the lifetime value of each customer.

C. Cautious Aggression

Health and beauty franchises have one thing in common – the word of mouth plays a huge part.

To make sure that your beauty franchise isn’t missing out on free, passive marketing, focus on improving your social media presence, hire the services of digital marketing experts, participate in local events, maximise the marketing potential of local channels and make your business an important part of the community.

If your franchisor is taking care of marketing for you for a fee, discuss with them how you can invest more to get faster results.

Recommended: Fitness and beauty franchises are cut (nearly) from the same cloth. Know what goes into the making of a successful fitness franchise.

Top Beauty Franchises UK

Here are some of the popular beauty and hair salon franchises in the UK*.

1. Relooking

  • Minimum Initial Investment: £16,000 (plus VAT)
  • USP: Original, new-age beauty treatments and slimming programs
  • Full training
  • Experienced network head
  • Exclusive territories
  • Location assistance
  • Bespoke products

2. Guinot

  • Minimum Initial Investment: £87,000 (plus VAT)
  • USP: Comprehensive beauty treatments for men and women; organic, original products
  • Training and support
  • Marketing support
  • Valuable brand name
  • Associate BFA Member

3. Rush Hair and Beauty

  • Minimum Initial Investment: £15,000 (plus VAT)
  • USP: Unisex hair care services
  • In business for over two decades
  • 60+ units in operations across the UK
  • Full training
  • Growth programs
  • Associate BFA Member

4. Saks

  • Minimum Initial Investment: £25,000 (plus VAT)
  • USP: Industry leading hair and beauty services
  • Training provided
  • Tie-ups with leisure clubs
  • High-street favourite for over 30 years
  • Full BFA Member

*The information provided in this section is merely indicative in nature. Please contact the respective franchisor for more information.

Health, Beauty and Hair Franchises UK: The Takeaways

  • Research the market carefully.
  • Explore the scope for innovations.
  • Re-invest in marketing.
  • Hire reliable, skilled staff.
  • Focus on building personal relationships with customers.
  • Choose a location that ‘sells’.
  • Manage your debts carefully.

If you run a successful health and beauty franchise, we’re excited to hear about your experiences. Drop us a line to stand a chance to feature on our franchising success stories page.

Home Based Franchises UK – Taking Stock of Impressive Work from Home Opportunities

January 12, 2019

Unlike other dubious work from home opportunities, home based franchises UK give you a full-fledged source of income – a business of your own that you can grow the way you want to. Here’s all you need to know about these opportunities.

Working from home is one thing many of us dream of, but only few can well and truly pull off.

There’s no denying – it’s a wonderful idea to be able to work right from the comforts of your home, preferably on your own terms.

The internet has finally made this possible for many – and the number only keeps rising every year.

Franchising, in that respect, has been a great catalyst. Thousands of UK citizens now run successful franchise businesses from their homes. In this article, we’ll take a look at what home-based franchises bring to the table and what you – as a would-be franchisee – can expect from them.

First Things First – Remote Working Is No More a ‘Hip’ Trend, It’s a Full-Fledged Lifestyle

Working from home was never really a mainstream idea before the internet came about.

Today, however, things are a touch different. Working from home is not necessarily something that people are forced into doing as a result of circumstances. It’s an alternate lifestyle that many choose on their own volition. Multiple factors – from the lack of local opportunities to physical restraints – play a part, but the point here is that home-based job opportunities are no more limited by skills or rewards. If your job can be done remotely, you can get paid fairly for it.

The numbers are pretty interesting in this regard.

Over the past decade, work-from-home workforce has been steadily increasing in numbers. ONS data revealed in 2015 that over 4 million people worked from home across industries. An interesting insight – provided by a private surveyor – tells us what businesses think of this trend. Nearly a third of UK business owners think that close to 50% of the UK workforce will be working from home, come 2020.

What Does This Trend Say About Home Based Franchises UK?

A lot.

Throughout our franchising blogs, we have maintained that franchising is a business model that’s here to stay.

Combine this with the trend of people and businesses preferring home-based working and you have a vision that’s more than promising.

4 out of 10 UK Franchises are either presently home based, or have the potential to be. Considering the overall survival rate of franchise businesses over the first five-year period, it’s safe to assume that home-based franchises deserve to be taken much more seriously.”

Home based franchises UK are more popular today than they ever have been, partly because more and more people are now open to the idea of running a flexible business of their own – as opposed to just working for someone else or being a freelancer. All these factors – the growing entrepreneurial spirit, conducive economy, ease of doing business, the flexibility that comes with home-based working and the unlimited earning potential – mean that it’s about time we took home-based franchises seriously.

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How Do Home Based Franchises UK Work?

The biggest concern that many franchisees have before signing up is the ‘fear of the unknown’.

Working from home for an employer is one thing – but having to run the whole show yourself is a completely different ball game. So, it’s not too difficult to see where the apprehensions come from. A good way of dealing with this is to know and understand how home-based franchises work.

The Niche – The Most Prevalent Bottleneck

If it were possible, most businesses would hire home-based employees. But unfortunately, that isn’t the case.

In the same spirit, the business niche is the most definitive bottleneck as far the inner working of a home-based franchise is concerned. As of today, the majority of work-from-home franchises are professional service providers of some sort. Think accounting, consultations, pet services, real estate and even babysitting. Another common denominator in most of these franchises is the personal involvement of the franchisee. If you are already experienced in the field of business your franchise will operate in, you will have no trouble getting your business off the ground.

The Operations

The operations of home-based franchises are like any other franchise – except they are all carried out from your home, and not some office.

What this also means that your work will either be exclusively remote with no customer walking in, or visit-based where you visit the customer’s home/office as and when the need be.

The Employees

Will you be required to hire staff? Where will this staff work from? Will you delegate all your work to the staff and just play the manager?

It all, again, depends on the nature of your business.

If you want to run a home-based pet food franchise, you’ll probably need a few employees to drive mobile vans, tend to customer appointments and answer routine service calls. On the other hand, if you want to run a home-based accounting franchise, you may not need to hire staff at all until you decide to expand your operations.

The Training

For a home-based franchise, this is another aspect that often turns into a headache.

Will the training be online or on-site? Will there be regular training sessions as your business grows? Will the franchisor take responsibility of ‘initiating’ you in their business?

The level of training you receive from the franchisor will always play a huge role in deciding how well you get up and running and how quickly you get used to this new model. If you work with a reputed franchisor, it can be expected that they have elaborate training programs in place to keep you on track. If not, you will be forced to figure things out on your own.

This is precisely why it is extremely important to choose the right franchisor.

The Pros and Cons of Home Based Franchises UK

Home-based franchises have some obvious and some not-so-obvious pros and cons that all need to be considered before you make a business move.

Advantages of Home Based Franchises

1. Cheaper to Buy and Run

The minimum initial investment for most home-based franchises is usually on the lower side when compared with traditional, location-based franchises. Some work-from-home franchise opportunities let you get started for a minimum investment as low as £4,000!

This includes lower franchise fees, marketing capital and other one-off overheads.

As far as regular operations go, home-based franchises are unanimously cheaper to run. You don’t have to worry about renting a location and paying for the utilities. If your franchise can run without you requiring to hire staff, that can also save you a great deal of money.

2. Freedom (That Comes with a Lot of Responsibility!)

The freedom to work on your terms is certainly a thing of luxury. Home-based franchise opportunities allow you this freedom.

At the same time, it needs to be remembered that you will be responsible to the performance of your business. Choosing the right business structure can take care of many issues related to this.

3. Flexibility

This is perhaps the most compelling argument in favour of work-from-home opportunities – and home-based franchises are no exceptions. Running your business from home allows you to be flexible in terms of scheduling your work hours, getting work done and looking after your other interests.

4. Productivity

There’ll be no hours lost in commuting, no time wasted in nursing fatigue/stress that comes with having to ‘go to work’.

Of course, home-based franchises don’t offer you a stress-free lifestyle, but if you enjoy running your own business, this might work very well for you.

5. Opportunity to Learn

Most workplaces don’t offer explicit learning opportunities to their employees. Working for yourself – as work-from-home franchises let you do – can be a great learning experience that can help you grow as an entrepreneur and as a person.

6. Ideal for Parentrepreneurs

Helming the responsibility of looking after a young family doesn’t mean you have to sacrifice your entrepreneurial talents. Home-based franchises offer an ideal platform for stay-at-home parents to explore new avenues, achieve their goals and benefit from a steady stream of income.

Recommended: Be Wise, Be Informed. Here’s Our Take On the Pros & Cons of Running a Franchise.

Relative Disadvantages of Home-Based Franchises

1. Scalability Problems

A good business is inherently scalable. Even when your revenue is limited by the size of the industry itself, it’s makes no sense to have more limitations. Many home-based franchise opportunities face such scalability problems.

2. Blurred Lines

Working from home also means that you’ll always take your work home (and vice versa). In such a situation, it’s very easy to let your personal, social and professional lives to overlap.

3. The Niche Bottlenecks

We touched upon this point briefly in the earlier part of this post.

To find a franchise opportunity that goes well with your expertise AND is home-based can often be a tough task.

4. Inability to Raise Finance

Running a home-based franchise means that you can often make do with limited working capital. In case, however, you need to raise more money to fund business operations, things can get tricky. But it’s not all too bad – if you and/or your spouse have got a good credit score to bank on, you can raise money in your personal capacity to take care of your home-based franchise business.

5. The Red Tape

It’s not always straightforward to convert a home into an office (or, even a home-office).

If you are planning on housing business operations that require storing inventory, equipment or workspace for staff, you may need to obtain licences (usually from your local council). If you wish to make changes to the structure of your house, you will, of course, need the relevant planning permission.

All these bureaucratic hurdles mean that you can’t always ‘start’ right away after buying the franchise.

Types of Home Based Franchises UK

If you can think of a business, it’s likely that there exists some home-based version of it somewhere.

That said, here are some of the most common types of home based franchises UK:

1. Computer/Internet Based Franchises

Web development, customer service, content agencies, graphic design etc.

2. Education/Art Based Franchises

Tutoring franchises – languages, music, sport, fine arts, dance etc.

3. Fitness Instructor Franchises

Swimming, Crossfit, Yoga, MMA etc.

4. Property and Finance Franchises

Asset management, tax consultations, loans, real estate, accounting etc.

5. Pet Franchises

Pet foods, pet grooming, pet care etc.

6. Home Services

Cleaning, home improvements, pest control, landscaping, kitchen makeovers, maintenance etc.

7. Senior Care Franchises

Assistive support, overall care, medical care etc.

8. Vending Franchises

Industrial vending machines, retail vending machines etc.

9. Admin Support Franchises

Providing remote admin support to local/remote clients (as a franchise).

10. Travel Franchises

Travel planning, insurance, cruise agencies etc.

Top Home Based Franchises UK

It’s clear that there’s a huge variety to draw from when it comes to work-from-home franchises in the UK.  Here are our top picks*:

1. Oscar Pet Foods

  • Minimum Initial Investment: £8,995 (plus VAT)
  • USP: Comprehensive pet food services
  • Type: Pet services franchise
  • Full training provided
  • Online presence – social media, dedicated franchise website, Google My Business
  • Marketing support
  • Flexible operations
  • Full BFA Member

2. Right at Home Domestic Care

  • Minimum Initial Investment: £37,000 (plus VAT)
  • USP: High-quality, reliable domiciliary care
  • Type: Senior care franchise
  • Reputed brand name
  • International presence
  • Full training provided
  • Full BFA Member

3. Auditel

  • Minimum Initial Investment: £37,950 (plus VAT)
  • USP: Strategic cost management services
  • Type: Business services franchise
  • A leading business management brand
  • Full training provided (including a residential training course)
  • Personalised support
  • Full BFA Member

4. Aspray

  • Minimum Initial Investment: £37,500 (plus VAT)
  • USP: Property damage insurance claims
  • Type: Insurance franchise
  • In business for over 13 years
  • Large network of franchises
  • Full training provided
  • 100% work-from-home opportunity
  • High profit margins
  • Full BFA Member

5. TechClean

  • Minimum Initial Investment: £19,500 (plus VAT)
  • USP: Specialty IT equipment cleaning services
  • Type: Cleaning franchise
  • Unique services, pioneer in their niche
  • Full training and support
  • Large B2B business network
  • Easy to set up from home
  • Suitable for business district residents
  • Associate BFA Member

6. Sticky Fingers

  • Minimum Initial Investment: £2,995 (plus VAT)
  • USP: Fun, creative cookery workshops and parties for children
  • Type: Entertainment/tutoring franchise
  • Relatively newer establishment, unique business model
  • Opportunity to build a steady business in residential districts and suburbs
  • Ongoing support
  • Low start-up cost

*The information provided in this section is merely indicative in nature. Please contact the respective franchisor for more information.

Home Based Franchises UK – Important Takeaways

  • Understand the risks that come with buying a franchise.
  • Know that running a business is a full-time job. There may be no days off.
  • Carry out necessary market research before you buy a franchise.
  • Understand how working from home will impact your life.
  • Choose your franchisor wisely.

If you run a home based franchise, we (and thousands of our regular readers) would love to know about your experience. To stand a chance to feature in our widely popular franchising success stories section, do feel free to get in touch with us.

7 Steps to Take Before Starting Your Own Franchise

January 5, 2019

A franchise can be a very lucrative business. Investors have a ready market, identifiable name brand and many tools at their disposal. This can make it easy to get the business off the ground and see results quickly. It is important for any potential investor to understand the process and what they can expect. These easy franchising steps help assure any owner has the right franchise for their specific plans.

Research and Paperwork are Crucial

It’s important have a thorough look at any franchise in great detail. Read the brochures. Examine all available franchising literature. Treat this as a job description and remember that upwards of sixty plus hours a week may be required to make it a success. You will need to submit detailed paperwork about your assets and other qualifications before you begin. Franchise owners want to see that you have what it takes to meet their standards and meet the company’s brand expectations. A franchise owner will expect to see that you have been involved in other, previously successful business ventures.

Disclosure Documents and Questions

Government laws require the franchise to provide financial details about the company in advance. These franchising documents should be read closely. These franchising documents may be upwards of fifty pages. It’s a good idea to have an attorney have a look at them. The franchise owner or anyone in charge of vetting people typically requires an in person meeting with all applicants. Now is the time to have any questions answered. It’s a good idea to come to the meeting with a list of specific concerns about the documentation provided. Any interviewer should be able to answer questions about all aspects of the franchise including total annual revenues, the amount of money required for the initial investment and any kind of ongoing expenses.

Narrowing Down the Choices

Now is the time to investigate all possible franchise options in person. Visit at least two locations. Note details such as the cleanliness of the location. Visit at varied times including when the store first opens as well as rush hour. Sample many items on the menu and see how they are prepared. The ideal franchise is one that the investor can embrace wholeheartedly with true belief in the end product.

Related: Setting Up A Franchise Business – Choosing the Right Business Structure

Contact Other Franchise Owners

Now is the time to speak closely with others who have already invested in this franchise. Ask the company for a list of fellow investors. If this is not possible, it’s always possible to go online and look for message boards and other social media outlets devoted to the idea of investing in a franchise. People who have taken this step can share the benefits and the challenges of owning a franchise.

Lining Up Financing

In some instances, an investor may have cash on hand that is available for immediate investment in the franchise. In that case, making sure it is liquid and ready for the franchise owner is best. In some instances, the investor may need to have a source of funding. An investor may have a down payment but not the entire sum. The investor should make sure they have all the money they need to open the business before they begin.

Related: Running Your First Franchise

Picking a Location

Sometimes, a franchise already has a list of potential locations. If this is the case, it is extremely important to decide which one is right. In other circumstances, the investor is the one who must find the location and begin to develop the site. A franchise may not allow a potential competitor to open up a new outlet within a certain distance from an already existing location. Keep in mind that opening up a franchise will typically require working closely with the local planning board. An investor needs permits in place before they can move forward

Hiring Staff and Opening Day

After this process is completed, it’s time to find staffers and begin the process of working towards opening day. Many franchises have guidelines that help people find qualified and enthusiastic staffers ready to work on day one. It’s important to understand exactly how to hire people. Specific requirements may apply such as age groups, the ability to legally work and an applicant’s previous experience in the industry. All these factors, when properly done, will make any franchise a worthwhile investment.

Brittany Waddell is a contributing writer and media specialist for East Coast Wings. She often produces content for a variety of franchise blogs.

Setting Up A Franchise Business – Choosing the Right Business Structure

December 27, 2018

Running your franchise within the right business structure is not just a matter of paperwork – it has the potential to affect your personal life, too. Choosing the right business structure is all about limiting the liability and maintaining control.

Disclaimer: The information in this post does not constitute legal advice. 

Franchising is perhaps the most popular business model, especially among consumer-facing businesses. The UK franchising sector has grown at 10% in the last four years – a period when the national economy struggled to break past the coveted 1.5% mark.

There are multiple reasons to this fascinating growth (and unbounded potential). The most prominent reason is the willingness of successful businesses to open up their operations to outsiders. Franchising allows businesses to expand – at someone else’s expense. On the other hand, it allows franchisees – most of whom are first-time business owners – to leverage a business plan that has been proven to work.

Given this massive appeal, it’s no wonder that more and more people are willing to try their hand at buying franchises. When the business know-how is served in a ready-to-deploy package, it’s easy to forget the basics.

One such basic factor is the business structure. There is widespread confusion among franchisees about which structure best fits the franchising model. In this post, we will try to clear the air by comparing all the options.

Before getting to this point, let’s take a moment to understand the franchisor-franchisee relationship – a vital link (legally, financially as well as professionally) that not a lot of franchisees take into account.

The Franchisor-Franchisee Relationship

When it comes to franchising, there are numerous misconceptions out there that make life difficult for franchisees. It all starts right here, with not knowing exactly what their position is in the whole game.

It’s simple – don’t let anyone complicate this for you.

As a franchisee, you will have a purely contractual professional relationship with the franchisor. You will never ‘work for the franchisor’, nor will you ever be ‘paid by them’. You will generate revenue on your own, through the assistance provided by the franchisor. Depending on the contract you have in place (the Franchise Agreement), you will either pay ongoing royalties or commissions to the franchisor, in addition to all other expense components.

So, it should now be clear that running a franchise business is exactly what it says it is. Of course, you will never have the sort of freedom that comes with setting up your very own business from the scratch, but that’s the price you have to pay to fast-track the growth with the help of the franchisor who can offer a well-oiled, ready-to-roll business plan.

If you haven’t already, we would urge you to go through our free franchising guides. They are an excellent repository of all-things-franchising and are updated on a regular basis.

Recommended: 4 Reasons Why Franchising Is Here to Stay in the UK

What Is The Business Structure? Why Should A Franchise Business Care About It?

The business structure is one of the most fundamental identities attached to any business. In many cases, you’ll see it being referred to as the ‘legal structure’ of the business.

“Almost every major legal and financial development that takes place within a business is dictated by its legal structure. So, there’s every reason for you to be careful – about the present and more so about the future – when framing your business within a particular business structure.”

To give you an idea, here are some things that the business structure has directly impacts:

How You Get Started

Quite a few entrepreneurs are put off by the idea of having to deal with a whole lot of paperwork when starting a new business. To be fair, it can get quite overwhelming – but it pays to get done with it the right way.

The paperwork involved in the process will vary based solely on the business structure you choose to go with. In addition, the permissions, licences and clearances you will require from various authorities will also depend on the business structure.

Raising the Capital

On our UK franchising blog, we regularly talk about how franchisees can raise money to get their business up and running. It’s a difficult enough process to start with – there’s no point in making it even more frustrating by choosing the wrong business structure.

Most lenders will refer to the trading history and credit scores before they decide on your loan applications. What they will refer to will, in this case, be determined by the business structure you choose.

Handling the Profits

There are many ways people choose to get paid from their business activities. Some take a regular, monthly paycheque, and others go for selling their equity. Some go so far as to putting in place elaborate profit-sharing contracts among all the partners.

As you can imagine, the kind of legal control you hold over the company will eventually dictate all these decisions. In other words, the business structure will be the sole factor that will decide how you get paid. Perhaps the most compelling reason to think the decision through!

Dealing with the Taxman

Franchise businesses are often found wanting when it comes to being ‘tax ready’.

Our experience tells us that there’s a common reason behind every such story – the lack of experience in running a business.

If you don’t quite know about the kind of taxes franchises are required to pay, we have it all put together for you in this free UK Franchise Taxation Guide.

The types of taxes your franchise business will need to pay (and the amounts, in most cases) will depend, again, on the business structure you choose. What’s more, your personal taxes will also depend upon how you got paid in the first place (the point we made earlier).

Managing the Liability (Very Important!)

Running a business has its risks – and these aren’t always strictly financial.

Any liability that arises directly from your business operations – legal and financial – will be a direct function of the way the business is set up (i.e. the business structure). If the business, unfortunately, has to face bad debt scenarios, the business structure will decide how the liability is shared. Similarly, if there are any legal proceedings against the business, the business structure will dictate how the ramifications are addressed.

Types of Franchise Business Structures in the UK

There are no systemic distinctions between regular businesses and ‘franchise’ businesses.

So, the types of franchise business structures are the same as those for other businesses. In the UK, there are 4 major types of legal structures for businesses:

1. Sole Trader
2. Partnership
3. Limited Liability Partnership (LLP)
4. Limited Liability Company (Ltd)

We will discuss what these are and what they bring to the mix.

Sole Trader

This is the most common starting point for franchise businesses – and justly so.

Registering a business as a sole trader is the easiest, least expensive, fastest and most straightforward way, especially when you are starting out small. Professionals – especially service providers – have been using this business structure extensively for years. In fact, close to three quarters of businesses in the UK are sole traders.

Being a sole trader allows you to bypass most business hurdles as far as decision making is concerned. You will run the business with 100% control, meaning that you will be free to drive it in any direction you see fit. There will be no partners to discuss the matters with, no boardroom meetings to worry about. You will be able to employ staff, run the business as usual and keep things simple.

What Does Registering As a Sole Trader Mean?

Registering your franchise business as a sole trader simply means that you will be working on your own and for yourself. As mentioned earlier, this does NOT mean you can’t employ staff.

Read more: Registering as a sole trader in the UK.

Advantages of Registering Your Franchise As a Sole Trader

  • There are no lengthy procedures or no cumbersome red tape involved.
  • Registering does not cost you any money.
  • The process is quick – within a week of registering (or thereabouts), you will have your registration details (most importantly, the Unique Tax Reference Number, UTR).
  • Registering a business as a sole trader allows you to register the business name, too.
  • Most business expenses – from phone bills to business travels – will be tax deductible.

Disadvantages of Registering Your Franchise As a Sole Trader

  • The biggest disadvantage is the liability – you and your business will be virtually indistinguishable. You will personally be liable for all the business debts.
  • As an extension of this liability, your personal finances are exposed to business risks. In essence, being a sole trader means you expose your house, your other assets and the wellbeing of your family to all these risks.
  • As a sole trader, you will rarely get any tax benefits of running a successful business or employing people.
  • All business profits will be taxed as income. Being ‘self-employed’, you will need to follow the self-assessment procedures as usual.
  • Raising finances as a sole trader isn’t much different from borrowing money in your personal capacity. So, your personal credit history will always be at the focal point.
  • Even though sole traders can choose business names, these names aren’t available for general public to look up. Two or more sole traders can share the same name.
  • Since you assume the full control of the business, the business can come to a virtual standstill in unfortunate events such as your hospitalisation or death.

When Should You Register Your Franchise Business As a Sole Trader?

You should consider registering your franchise business as a sole trader when and if:

  • You are starting out with little capital and don’t expect to raise heavy loans any time soon.
  • You want to get your franchise business up and running quickly.
  • You are comfortable with the liability that comes with this option.
  • You want to retain the full control of the business.

Recommended: Thinking of Buying a Franchise? Make All the Right Decisions With franchise4u’s Free Franchise Checklist.

Business Partnership

A business partnership is an extension of the sole trader business structure.

Essentially, it’s a business structure where multiple sole traders assume the charge with the liability being shared between them.

A good example of this is a business run by a husband and wife. They can both register as ‘self-employed’ and form a business partnership with unlimited liability without much paperwork.

What Does Forming a Business Partnership Mean?

Registering your franchise business as a business partnership means that you put together a framework that decides the level of control, authority and profit sharing between multiple partners. Needless to say, you need to be very careful about your business partners. Thanks to the unlimited liability, their actions can hurt your personal and business prospects.

Read more: Forming and registering a business partnership in the UK.

Advantages of Registering Your Franchise Business As a Partnership

  • Like being a sole trader, registering a business partnership is fairly easy and quick.
  • Thanks to multiple partners, the capital raising prospects of your business grow proportionately higher. All partners can help raise finances towards common business goals.
  • Having access to multiple points of view is incredibly helpful – especially if partners bring on board great expertise in various fields.
  • The responsibility of running the franchise can be shared between partners. In one partner’s absence, others can take over without much hassle.

Disadvantages of Registering Your Franchise Business As a Partnership

  • Forming a thoroughly-thought-through partnership agreement is enormously important – a step many new businesses can’t seem to get right.
  • The liability is unlimited, meaning that any and every business debt will be the shared liability of ALL partners.
  • All partners are required to submit individual self-assessments to the HMRC.
  • All shared profits will be taxed as ‘income’.
  • Disagreements, loss of trust and many other ‘rapport’ problems can lead to standoffs that can paralyse business operations.

When Should You Register Your Business As a Partnership?

You should consider forming a business partnership to run your franchise business if and when:

  • You need to raise more capital to start off.
  • You have reliable business partners.
  • You want to eventually grow the business to a ‘company’ level.

Recommended: Franchise Insurance Explained – A Free Guide for UK Franchisees

Limited Liability Partnership (LLP)

Just as business partnerships are an extension of the sole trading structure, limited liability partnerships are an extension of partnerships.

LLPs have been enjoying some new-found love from business across the UK, thanks to the combination of flexibility and safety they offer to business owners.

What Does Forming a Limited Liability Partnership (LLP) Mean?

An LLP is formed between multiple business partners the same way as business partnerships are formed. This involves setting up an elaborate partnership agreement that stipulates the profit and responsibility sharing details. Each limited partner is required to register with the HMRC as ‘self-employed’, while the business itself needs to be registered with the Companies House.

The key difference is that within an LLP, the liability of partners is limited (usually to their share of investments in the company).

Read more: Forming and registering a limited liability partnership in the UK.

Advantages of Registering Your Franchise Business As an LLP

  • The most obvious advantage is the limited liability. Partners share the liability that is proportionate to their investments and involvement in the company. This greatly reduces your exposure to debt recoveries and other legal troubles.
  • There is no limit to the number of partners you can have in an LLP.
  • You won’t be (fully) liable for the actions of other partners.
  • LLPs combine the best features of partnerships and corporates.
  • The tax burden lies on individual partners. This can give your business an edge in the long run.

Disadvantages of Registering Your Franchise Business As an LLP

  • All financials are to be submitted to the Companies House. These will be available in the public domain. For a small business, the public disclosure rarely makes much sense.
  • More paperwork, more regulatory control.
  • Like partnerships, LLPs are dissolved when all but one partner decide to exit.
  • To form an LLP, you need to choose a business name that isn’t already taken by other companies.

When Should You Register Your Franchise Business As an LLP?

You should consider choosing a limited liability partnership structure for your franchise business over other options when and if:

  • You plan on bringing on board many partners.
  • You need to raise multiple loans.
  • You need to limit your exposure to legal and financial liabilities. This applies particularly to franchise businesses in high-risk consumer facing categories like pest control.

Read More: Fast Food Franchises Are “Killing It” in the UK. Here’s All You Need to Know About Them.

Limited Liability Company (Ltd)

Since most franchise businesses don’t really go so far as incorporating a limited liability company (private limited company), we’ll keep this segment short.

What Does Incorporating a Limited Liability Company (Ltd) Mean?

Incorporating a limited liability company means registering a ‘full-fledged’ company with the Companies House. Usually, this is a move that best suits medium to large sized businesses with multiple shareholders.

Read more: Incorporating a private limited company.

Advantages of Registering a Business As a Private Limited Company

  • Limited liability (limited by shares)
  • Robust operations
  • Higher capital raising potential
  • More trust and credibility
  • Better tax management

Disadvantages of Registering a Business As a Private Limited Company

  • More expensive
  • High regulation and public disclosure
  • Unsuitable for small businesses

Franchise Business Structures in the UK: The Takeaways

  • Choosing the correct business structure is important to safeguard your personal interests.
  • It can also save you a great deal of hassle and money in the long run. In fact, choosing the wrong business structure is almost always guaranteed to cost you more.
  • The initial costs should never outweigh long term interests.
  • Always consult with an experienced, qualified professional before finalising the business structure.

Have any questions or comments? Feel free to drop us a line!

The Ultimate Guide to Home Improvement Franchises in the UK

November 21, 2018

Home Improvement Franchises UK. There’s a constant growth in demand for domestic needs businesses in the UK. Can you leverage this demand with a home improvement franchise?

Through our ongoing blog series, we have tried to discuss various types of franchises and the pros and cons associated with them. There has been a recurring theme to all these blogs – the business sectors discussed were required you to have little industry experience to get started.

In this post, we are going to stray off the course – just a little bit. Home improvement franchises require you to invest a considerable sum of money with equivalent industry experience to go with it. This may sound like a bad starter, but that’s not the case. The high barrier to entry means there are more opportunities and more room to grow your business.

We will discuss the market demand for home improvement and repair franchises in the UK, the economics of how it all works and what you need to know before you invest your hard-earned money in such opportunities.

Are Home Improvement Businesses Really Needed?

The short answer is – yes, they are. Today more, than ever.

There’s no better way to justify this claim than to look within. An average homeowner in the UK has to take on major home improvements once every three years. The minor repairs, refurbishments and value-additions keep happening multiple times every year.

“Every major home improvement projects costs the homeowner an average of £23,000 (or more). This number sharply jumps to over £42,000 for improvements in recently purchased properties.”

This wasn’t always the case. The domestic housing and real estate market was the first to bear the brunt of the 2008 downturn. The strange chain of events set in motion by the recession actually ended up helping the home improvement market, as homeowners stopped investing in new real estate and started, instead, adding more value to their properties.

Of all home improvement projects in the UK, 32% are devoted to bedroom improvements, 29% to bathrooms and 28% to kitchen. Outdoors and extensions account for the rest of the pie.

It’s clear that homeowners and landlords are willing to invest in home improvements and repairs – and the reason is simple. An average home improvement job provides an ROI of 300% in the long run through property value and increased rents.

Buying and running a home improvement franchise is all about making the most of the homeowners’ willingness to invest.

Data Source: Foxtons

How Much Do You Need to Buy a UK Home Improvement Franchise?

Unlike the franchise ideas we have discussed so far, home improvement and repair franchises have more types, and hence, a wider range of options.

“While service and repair franchise will cost you around £20,000 to £40,000 in minimum initial investment, the larger, more robust construction and improvement franchises will need you to invest £60,000 to £140,000 to get started.”

This is, of course, just the capital you need to buy the franchise and the knowhow. It also usually includes training, territory rights, necessary equipment and inventory (if applicable) for the first few months. You will, however, need to take into account other expenses like office/warehouse rent, staff salaries, mobile vans for the staff, marketing budget, insurance, utilities and other operational overheads.

Recommended: Pest Control Franchises Are Booming in the UK

How Home Improvement Franchises Make Money

There are multiple revenue models used by home improvement and repair franchises in the UK. The most common model that runs across the board is the as-needed service model.

You get a call from your customer, you provide them a quote for the home improvement job they need done, you complete the project and you get paid – simple as that. The simplicity comes at a cost – more than 70% of domestic service businesses have to rely on new customers. As you know, acquiring customers always eats into the profit margins, steadily affecting the bottom line of your business.

Many home improvement franchise get around this problem by going ‘industrially domestic’. This is a new model that’s been gaining a lot of traction, especially in districts where renting a house is more affordable than owning one.

The idea here is straightforward – you work with landlords and businesses like hotels, lodges, dorms and hospitals to establish ongoing retainer contracts for improvements and repairs. This not only creates a steady stream of revenue, it opens the door for many such opportunities through business networking.

These are just the two most common ways for home improvement and repair franchises to generate revenue. Based on the specifics of business, you can certainly come up with new models that work for you.

The Importance of Territory Allocation for Home Improvement Franchises

We had a short discussion about the importance of business location in various articles on our blog. This concept needs to be looked at from a slightly different point of view for home improvement franchises.

The good news is, you don’t need to invest in a high-street, retail location to run your business. You can easily rent an affordable location to house your office and equipment. What’s more important to consider here is the value of the territory.

The reason home improvement franchises are expensive is that they offer you a ready-to-service territory that has been thoroughly studied for its business potential. For other businesses, it’s rather difficult to arrive at a number of potential buyers, but for domestic service franchises, the number of households gives you a clear idea of your target demographic.

In that sense, it becomes important to choose the territory wisely. The best business practices suggest that you should stay away from the spectrum extremes – virgin, uncharted, untested territories as well as oversaturated markets with stiff competition.

Once you have the territory problem sorted in your favour, you will have less to worry about in terms of short-term competition.

Types of Home Improvement Franchises

There are dozens of types of home improvement franchises that cover the entire range of home services – from appliances to gardening and flooring to furniture. We will restrict ourselves to the most popular types here.

Kitchen Improvement Franchises

Almost every house needs kitchen improvements from time to time. On an average, a UK homeowner spends a minimum of £2,500 on kitchen improvements each year. Kitchen improvement franchises aim to cater to these needs in their allocated territory.

Typical kitchen improvements include installation of appliances, redesign, refurbishments, modular conversions and utilities.

Furniture Franchises

Traditionally, furniture businesses haven’t really been looked at as a part of the home improvement sector. Now, with the advent of the rent-it-all lifestyle, it’s safe to include these here.

Typical furniture franchises have two USPs – buying and selling furniture to homeowners and repairing existing furniture. While the potential of furniture repair industry isn’t quite appealing, there’s certainly enough room in the buying, selling and renting space.

An important task while running any furniture business is to strike the perfect balance between logistics, market trends and local interests. If you get this right, this type of home improvement franchises can be as lucrative as any.

Landscaping Franchises

Running a landscaping franchise is all about bringing experience and specific expertise on board. Be warned – landscaping franchises will cost you much more than most other home improvement franchises.

The reason for these high – at times, prohibitive – levels of investment is the nature of the job you will be expected to do. You will need to get on board trained and certified design professionals and, quite possibly, hire the services of architects and planners. These top-of-the-line professionals will, quite obviously, cost a lot.

But it’s not all bad. Landscaping can be a hugely profitable business if you operate in a high-income territory.

Gardening Franchises

Gardening franchises are slightly different. These are thoroughly service-oriented franchises that aim to acquire regular, returning customers (unlike landscaping franchises).

Utility and Repair Franchises

Domestic services have long been scattered. Utility and repair franchises aim to resolve this problem by clubbing multiple services like plumbing and roofing together. This is again a relatively novel business idea that has, so far, been fairly successful in urban areas.

Property Maintenance Franchises

Property maintenance franchises use a theme similar to utility franchises. The biggest positive for such franchises over other types is the loyalty-based revenue model. Once you have a customer on board and you provide good services to them, you can rest assured that you will form a long-running business relationship with them.

Property maintenance franchises largely cater to landlords who have multiple properties under their hold.

Renewable Energy and Air Quality Franchises

Renewable energy has forever been a fringe concept – but this is changing. More and more households in the UK are willing to invest in renewable energy to benefit from various allowances and play their part in a greener future. Solar power franchises are the best exponents of this idea.

Air quality franchises are an extension of utility franchises, and aim to provide cleaner, healthier air to houses and places of business.

Flooring and Roofing Franchises

Flooring and roofing are among the most requested home improvement services. Many homeowners hire roofing and flooring experts every two years to keep their properties in good health – and in this lies the real business potential for flooring and roofing franchises.

Premium Services and Value Addition Franchises

These franchises cater to the high-end homes that have premium requirements. This niche can be tough to crack, but equally profitable once you get in.

A great example of this are swimming pool franchises. While the demand may not be as widespread as other services, swimming pool franchises can turn over a sizeable revenue with only a handful of clients. The downside is that such services are overly dependant on the disposable income of their target customer base.

Should You Buy a Home Improvement Franchise?

Buying a home improvement franchise – or any franchise, for that matter – can be a difficult decision to make. At franchise4u, we receive countless questions from people who want to buy a franchise, but they aren’t sure-footed. Before we go any further, we would urge you to read through our free franchising guides to know what it really takes to run a successful franchise business.

As far as home improvement franchises go, the first consideration should always be your ability to invest. Since these franchises will cost you a significant sum of money, make sure that you know the risks associated with the business. Preparing a contingency-proofed business plan can paint a clear picture of risks and opportunities.

The second consideration should be the expertise and experience that you bring on board in your personal capacity. Prior experience in the given field will always come in handy, and you won’t have to learn ‘on the job’.

Lastly, you should be able to carry out a thorough, on-field and fact-based market research that is customised for the territories you may have shortlisted. It will tell you in no uncertain terms what the potential of a franchising opportunity is.

Free Download: Our Complete Franchise Checklist

Top Home Improvement and Repair Franchises in the UK

Let’s take a quick look at some of the most popular and innovative home improvement and repair franchises in the UK.

Value Doors

  • Minimum Initial Investment: £10,000 (plus VAT)
  • USP: High-quality, low-maintenance external doors
  • Low/no royalties
  • Thorough support
  • Staff training
  • Start on a budget
  • Associate BFA Member

Surface Medic

  • Minimum Initial Investment: £25,500 (plus VAT)
  • USP: Sophisticated surface repair
  • Relatively untapped market
  • Novel services that are gaining in popularity
  • Extensive training and support
  • Assistance with marketing

Apollo Blinds

  • Minimum Initial Investment: £17,000 (plus VAT)
  • USP: Specialty blinds, curtains and awnings for domestic and commercial clients
  • Exclusive distribution rights for major brands
  • Staff training and business support
  • Associate BFA Member

Pro-Tect Alarms

  • Minimum Initial Investment: £25,000 (plus VAT)
  • USP: State-of-the-art home security solutions
  • 12+ years in operation
  • Exclusive territory rights
  • Funding support
  • Training and marketing assistance
  • Valuable and popular brand name

Gautier Furniture

  • Minimum Initial Investment: £250,000 (approx.)
  • USP: High-end furniture
  • Available in 65 countries
  • A popular brand name with hundreds of high-street locations in operation
  • Funding support may be available
  • Ideal for urban territories

EnviroVent

  • Minimum Initial Investment: £19,950 (plus VAT)
  • USP: Sustainable, efficient ventilation solutions
  • Exclusive territory rights (400,000 homes)
  • Extensive business support
  • Consistent knowledge transfer
  • Full BFA Member

The Takeaways

  • Choose your franchisor based on your industry experience.
  • Be prepared to make a large upfront investment.
  • Home improvement franchises require you to invest in your staff.
  • Choose your territory only after conducting a thorough market research.

Talk to operational franchisees before you sign a franchising agreement.

Fast Food Franchises in the UK – 10 Things Every Would-Be Franchisee Must Know

November 14, 2018

Fast Food Franchises UK. Thinking of buying a fast food franchise? Here are 10 points you can’t afford to miss.

Franchising is not, in itself, a business. It’s just a business model that powers hundreds of businesses turning over dozens of billions of pounds each year in the UK. The numbers are good enough to depict the scale and magnitude of the popularity franchising enjoys – but it wasn’t always like this.

When franchising was still a novel idea, there weren’t too many takers. Giving away business know-how to strangers for money just didn’t make sense to many. The catalyst for change was the food and beverage industry – undoubtedly the foundation of modern franchising.

A quick visit to any local mall and a stroll down the high-street are good enough to understand this impact. You just can’t help bumping into brand-name restaurants and takeaway joints. If this gets you excited about jumping on the bandwagon of fast food franchises, here are 10 points that will help you make an educated, informed decision.

1. Understanding the Market for Fast Food Franchises

A general perception about the food and beverage industry is that of unpredictability. Many outsiders find it extremely difficult to break into this industry, thanks largely to knowing too little about the industry.

The food and beverage industry has always shared a huge chunk of consumer spending in the UK. More importantly, this industry has been the largest manufacturing sector over the last ten years. At £110bn, the annual revenue generated by this industry props up the national GDP by about 7%. The present annual growth rate stands at an impressive 10% (much higher than the national average). These numbers, from no viewpoint, are insignificant.

The growth is fuelled by the ever-rising number of people who prefer to dine out. In 2017 alone, UK diners spent over £54.4bn on eating out.

2. The Seemingly Impact-Proof Demand

Now that we have established the enormous size of the food and beverage industry, let’s take a look at why the fast food industry, in particular, has been successful.

Much of the credit for this success goes to the nature of the demand this industry enjoys. Fast food – a few decades ago – was a thing of indulgence. Today, it’s become a way of life. We all have – at one point or another – preferred fast food over elaborate meal plans. Such deep is this effect that 62% of millennials in the UK choose to dine out, order delivery or take fast food out over long-winding dinners and restaurant meals. Considering the increasing purchasing power of this demographic, the demand side for fast food franchises seems to be well taken care of.

What should also come as a promising sign for you if you are thinking of investing in a fast food franchise is the very nature of this demand. The food and beverage industry passed the trial by fire throughout the turbulent 2008-12 period, coming out with flying colours. While fancy restaurants and top-of-the-line diners may feel the heat during economic slowdowns, fast food franchises can rest easy, given that their appeal lies in the affordability for the end customer.

3. The Brand Value Factor Has Kept Fast Food Franchises Going

While discussing what franchising really is, we made a point that the case for franchising is based on the franchisor’s brand value and the replicability of the business model.

As far as the brand value goes, fast food franchises are perhaps the best exponents of franchising. Brand loyalty has played a huge role in shaping up the 21st century consumer market, and this is exactly why fast food franchises – not just in the UK, but the world over – are making it big.

Walk into any McDonald’s or order from any Subway – the ambience and the food are bound to give you the same experience. This experience is the physical, tangible way for the brand value to make its presence felt.

By buying and running a fast food franchise, you can instantly get associated with a brand that already has fans and loyal customers.

Recommended: Thinking of Buying a Franchise? Our Free Franchise Guides Have You Covered!

4. The Importance of Location

For fast food franchises, the location has the power to make or break the business. The brand value is important – as we just saw – but it can take your business only so far. To actually attract new customers, you need to be operating in a location that invites heavy footfall.

If you build it, they will come – or maybe not. But if they see you, they will definitely come!

In this sense, fast food franchises are quite similar to retail franchises. Just by being in front of people is often enough. This is also the reason why you see many fast food restaurants often changing locations. The customer is loyal to the brand – not to the individual franchise or location. So, before putting your money into a fast food franchise, do make sure that you have assessed the potential of multiple locations through a detailed market research.

5. How Much Does a Fast Food Franchise Cost?

This is probably the burning question that led you to this page.

The answer, we’re afraid, is never the same.

There are so many fast food franchise opportunities available that it’s impossible to arrive at a reasonable average or even a small range. What we can tell you instead is that fast food franchises don’t come cheap.

A typical A-list fast food franchise – think McDonald’s, Hardee’s, Dunkin’ Donuts or Subway – will require you to put up a minimum initial investment of £400,000 to a whopping £2mn. A lesser-known franchise can be purchased with a minimum initial investment of less than £100,000.

All the potential and positives we have talked about so far translate into a steep price that franchisees need to pay. Don’t get us wrong – even at such high prices, the top fast food brands find many more takers than they can accommodate. The result? Long wait lines that stretch into years before you can be a proud owner of a McDonald’s or a KFC restaurant!

In addition to the minimum initial investment, global brands usually have a rather strange net worth requirement. If you can’t demonstrate that you can cross this bar, even putting together the minimum initial investment won’t help.

On the other hand, there are many lesser-known and thus less valuable fast food brands that are on the lookout for new franchisees to join them. In fact, one of the important motives behind this article was to bring to your attention the need to identify the potential within such brands.

The bottom line here is – don’t let the price tag discourage you. There are many ways to succeed in this line even when you can’t afford the best of the best.

6. The Economics of Fast Food Franchises

Over the years, fast food franchising has not only overtaken every other franchise sector, it has also set up a proven template for others to follow.

Important parts of this widely copied template are revenue generation, revenue sharing and reinvestment methods. While the sensitive details are usually available to only the franchisees successfully bid for franchise units, there is enough information available in public domain to create an elaborate picture.

The first investment component is the flat-charge franchise fee. Most fast food franchisors charge these fees, with the rest rolling it in the overall initial investment sum.

Apart from the franchise fee, you will need to invest enough capital to cover for the location, security deposits, equipment, inventory and brand materials. Most franchisors require you to put up adequate capital that will sustain the business operations for a period of 4 to 6 months. In addition, top brands will require you to have a further liquid cash pool to fulfil unforeseen contingencies.

The revenue generated by the franchise unit is shared with the franchisor on a fixed royalty basis. The common industry practice sees the royalty set at 4 to 8% of the gross sales (not profits). Additionally, you will need to reinvest a fixed percentage of gross sales as contributions to the collective marketing pool.

7. Should You Buy a Fast Food Franchise?

Buying a franchise is a decision that needs to be taken after a thorough research of every aspect of the business. While it’s easier to skip the ‘investigation’ part for globally known brands, you just cannot afford to rely on what the franchisors want you to hear. To learn more about how to choose a franchise, please head to this free guide.

Are Food Franchises for You?

Running a restaurant – that’s what this essentially is – is not an easy job. You will need to oversee multiple fronts at the same time, 5 to 7 days a week, throughout the year. There are no slow seasons, there are no bank holidays. Most restaurant owners can attest to the fact that this is a business that conveniently blurs the boundaries between your personal, social and professional lives.

Additionally, your people skills will be put to the test every single day. You will need to manage the staff, deal with the suppliers, maintain a good relationship with the franchisor and – above all – satisfy the customers on a daily basis.

If you’re ready to work hard and you are passionate about providing real value to your customers, fast food franchises (or any food franchises, really) can offer you a rare blend of financial success and job satisfaction.

Free Download: The Franchise Checklist Every Would-Be Franchisee Needs to Keep Handy

8. Is This the Right Time to Buy?

You can browse through the performance track records of local fast food franchises to know what the business has been like over the last few months and years. Most fast food franchises post steady numbers throughout the year.

9. The Future of Fast Food Franchises

The future of fast food franchises will be defined by changing eating habits, disparities in the purchasing power of various demographics and, of course, marketing gurus.

Identifying the trends and swimming with the market currents is the best way of getting good returns on your investments in money markets. The same rule applies here. If you keep your eyes and ears open, it’s not difficult to spot such trends.

Vegan lifestyle, for example, has never been more popular in the UK than it is now. If you are passionate about the vegan ways, you can talk to vegan fast food franchises. Similarly, more and more people in the UK are willing to try authentic, global makeovers of their favorite fast foods. Capitalising on such trends early by securing suitable franchising opportunities can save you a great deal of money and keep your business ahead of the curve.

10. Top Fast Food Franchises in the UK

Here’s our selection of some of the most popular and exciting fast food franchise opportunities in the UK. We have tried to keep our selection limited to relatively lesser known franchise opportunities, giving a miss to international bigwigs such as McDonald’s, KFC, Subway & Burger King.

Wafflemeister

  •  Minimum Initial Investment: £100,000 (plus VAT)
  • USP: Handmade Belgian waffles, secret family-owned recipe
  • Wide menu options
  • Operational in major high-street locations across the UK
  • Thorough training and support

Veeno Wine Café

  • Minimum Initial Investment: £75,000 (plus VAT)
  • USP: Premium European wines. Authentic wine drinking experience with accompanying fast food.
  • Thorough staff training
  • Centralised customer service
  • Innovative wine testing campaigns and clubs

Loaded Burgers

  • Minimum Initial Investment: £25,000 (plus VAT)
  • USP: Fresh ingredients, innovative flavors
  • Young brand, growing business
  • Extensive marketing and business support

Auntie Anne’s

  • Minimum Initial Investment: £50,000 (plus VAT)
  • USP: Wide variety of soft pretzels
  • Globally recognised brand
  • 1800+ units in operation
  • Funding assistance may be available
  • Associate BFA Member

Amorino

  • Minimum Initial Investment: £250,000 (plus VAT)
  • USP: Authentic Italian ice cream made using natural ingredients
  • 110 outlets in operation
  • End-to-end business support

The Takeaways

  • Understand the business model before you finalise a particular franchise.
  • Know what the franchisor location and territory policies are.
  • Read through the revenue sharing and reinvestment terms.
  • Talk to operational franchisees.
  • Make sure you are passionate about the industry.
  • Be prepared to work round the clock, through the week in the initial stages.

A Hands-on Guide to Pest Control Franchises in the UK

November 7, 2018

Pest Control Franchises UK. Running a pest control business is not for everyone. But if you put in the hard work, you can definitely make a killing with it!

Running your own business is a tough ask. It takes a mountain of efforts to make things work, and the first steps are hard enough to deter even the most determined. But the upside is worth the risk. The obvious positives like financial freedom and job satisfaction apart, you can actually serve the community and help make people’s live easier with your business.

This, however, means getting your hands dirty – quite literally, in this case.

The pest crisis in the UK is real and widespread. From giant rats that you’d otherwise think belong in the wild to tiny bugs and critters that frustrate you to no end, pests are nearly omnipresent in the UK. What this also means is that there’s some money to be made here. But is buying a pest control franchise a good idea? How much does it cost? What are the considerations?

In this post, we will try to get to the bottom of all these questions.

The State of Pests and Pest Control in the UK

They may not represent the most glamorous business idea, but pest control businesses have been among the most profitable ones in the UK for the last five years. Let’s crunch some numbers to put things into perspective.

  • The pest infestation in the UK is more harrowing today than ever. Experts estimate the domestic and industrial insect infestation growth to be at a staggering 40%. This number for rats, although unsubstantiated, is supposed to stand at around 15%.
  • To understand the gravity of the problem, look no farther than your own kitchen. Nearly 2 in 3 domestic kitchens in the UK are thought to be infested – in varying degrees – by pests.
  • The pest control industry in the UK is, quite surprisingly, still in its infancy. The annual turnover registered by the industry for 2016-17 was £463 million.
  • The growth rate for the industry – at 2% for 2014-18 – does not reflect the market demand. What this also means is that there’s enough space for more businesses, especially in urban districts.
  • There are only about 670 independent pest control businesses in the UK that generate about 7000 jobs.
  • Pest control businesses are subject to stringent health and safety rules and regulations.

Source: IBIS World

The numbers are telling. Pest control is not just the need of the hour for countless homes, they are a matter of obligatory requirements at workplaces, restaurants, hotels, schools, hospitals and many other places of business and social activity.

Pest Control and Local Councils – A Twisted Relationship

The most common question one has before buying a pest control franchise is this – why would people buy my services if local councils provide them anyway?

It would have been a valid question about five years ago. But as things stand today, few local councils – if any at all – provide free pest control. In addition, people prefer to deal with private contractors because of better time management, costs and efficiency of work. Take this report for example. The council pest controllers were called in 143,000 times in one year from the West Midlands alone. Quite predictably, they weren’t able to service all the calls, implying more business for private contractors and businesses. The austerity measures introduced on the government as well as local council levels have been in effect for about five years now. These measures slashed local council pest control budgets by 10 to 20%, giving a clear way ahead for private pest control businesses.

Pest Control Businesses – Understanding the Need for Them

The demand is certainly there, as we have established. But what exactly makes a pest control franchise a viable business option?

To understand this, we have to realise the real need for pest control.

This need stems from three factors – the nuisance value of pests, the health hazards posed by pests and the mandatory regulations that require pest control. Let’s very quickly assess these.

Rats and mice are by far the biggest nuisance creators. Found in varying numbers all across the UK, they are known to cause food, property and health damage that collectively costs millions of pounds to UK residents and businesses. In fact, nearly 60% of pest control calls in the UK are to deal with rats and mice. Since these rodents have adapted to urban, semi-urban, industrial and rural landscapes, it’s virtually impossible to make them irrelevant – the only feasible option is pest control.

The same story goes with wasps, ants and bed bugs – the top three insects that not only make people’s lives difficult, but also force their hand to call in pest controllers many times a year.

Reasons to Buy a Pest Control Franchise in the UK

So far we have talked about pest control businesses and what makes them attractive from the demand point of view. Does this, however, also mean that pest control franchises are profitable?

While we can’t really comment on the level of profitability, we can say that there are enough reasons to consider buying pest control franchises.

  • Pest control franchises are consumer-facing service franchises, meaning that you can expect a great deal of support from customers if your franchisor has a name-brand that’s well-known.
  • This is a specialty service business. So, you can expect much less competition in your territory, as the barrier for entry is quite high.
  • The service itself is ever-useful in nature. We aren’t going to run out of pests anytime soon, and your business will always have homes and other businesses to cater to.
  • Pest control franchises are required in all demographic areas – from the high streets of London to rural Wales.
  • It’s much easier to base your business model on bulk contracts from institutions, organisations and businesses if you operate in a densely populated territory.
  • Since you will be required to visit the work site, you don’t need to spend heavily on renting a prime commercial location. (You will need to speak to the local council regarding the storage of chemicals and pesticides.)
  • Buying a pest control franchise means that you get to enjoy all the benefits that come with franchising in addition to the brand value – marketing budget, ready-to-deploy know-how, staff training, assistance with necessary certifications, customer support and troubleshooting.

How Much Does It Cost to Buy a Pest Control Franchise in the UK?

Right, we now get down to the most important question of them all.

The reason we picked pest control franchises for this post is simple – it’s easy to get started with one on budget.

“You can buy a standard domestic pest control franchise from a reputed franchisor with a minimum initial investment of £15,000 or more, while a similar commercial franchise will cost you upwards of £30,000.”

This is, however, just the minimum initial investment. It will buy you the franchise licence, basic knowledge, some inventory and training/support for your staff. You will need to have a budget ready for recurring expenses such as rent, insurance, regulatory clearances, certifications and royalties. Another important thing you will need to consider in this context is the cost of mobile vans to carry your equipment and chemicals around. Reputed franchisors do provide finance assistance for buying commercial vehicles. If you want to learn more about alternative finance, our Franchise Finance Guide has you covered.

All things considered, you can get your pest control franchise up and running with an initial capital (rolling for the first six months) of £30,000 to £60,000.

If you can establish your credentials, a pest control franchise can certainly make you good profits.

Recommended: The only franchise checklist you’ll ever need – Download for free

Pest Control – Licences and Certifications Required

The British Pest Control Association is the licensing body for all pest control businesses operating in the UK. If your franchisor is a member of the association, you can get in touch with them to know what licences will be required for your staff. The BPCA website has some very valuable information in this regard. It’s also advisable to contact your local council to see if any additional permits and licences are needed to operate in the region.

Types of Pest Control Franchises

We will classify pest control franchises into three broad categories for the sake of clarity:

  • Domestic Pest Control Franchises

Domestic pest control franchises are limited (usually by licence and capacity) to servicing small-scale domestic projects. The main part of the job here is to answer pest control calls on an as-needed basis in a given territory. The types of pests such franchises have to deal with vary from region to region, but the ‘usual suspects’ include rodents, ants and bed bugs.

Running a domestic pest control franchise is all about establishing a firm business hand in your territory. You will not be required to hire more than 5 pest controllers, given the limited scope of operations.

  • Commercial Pest Control Franchises

This is a direct commercial counterpart to domestic franchises. As an industrial/commercial pest control franchise, you will need to look after large scale operations that involve extensive pest control measures. This, quite predictably, calls for more trained staff, industrial equipment and relevant certifications. This is the reason why industrial franchises are more expensive to buy and run.

There’s a significant upside to these franchises when it comes to the revenue model. Industrial franchises rely on getting into long-term contracts with businesses and organisations. This guarantees a predictable stream of income. From hospitals and schools to restaurants and warehouses, the scope of work is quite wide, and you may want to buy a specialty franchise to make things more manageable.

  • Agricultural Pest Control Franchises

Since agricultural pest control franchises are fewer in numbers, you may not come across many buying opportunities. It’s also a tough market to break into because of the established market order that has been catering to farms and rural estates for decades.

The focus here is to use customised, eco-friendly techniques to help customers deal with large-scale farmland pest infestations.

Should You Buy a Pest Control Franchise?

From fumigations to disinfections, every service you will provide will need to adhere to strict rules and codes. You will, as the operator, may also be personally liable for maintaining safe operations.

In light of these points, pest control franchises are best suited for those who bring prior experience on board. While you don’t need to be trained or certified to run the business, having these credentials will certainly make things easier. Considering the high volume of emergency, odd-hour calls, you will also need to be ready to commit to the business full-time.

Recommended: Should you run a franchise business?

Top Pest Control Franchises in the UK

Prokill

  • Minimum Initial Investment: £15,000 (plus VAT)
  • USP: Domestic + commercial pest control
  • In operation since 2003
  • Over 20 franchises distributed, all claim to be successful
  • Thorough training and support
  • Full BFA Member

Pestforce

  • Minimum Initial Investment: £16,500 (plus VAT)
  • USP: Leading domestic pest control services
  • In operation for over 20 years
  • 68 active franchises
  • Funding support available

The Pest Company

  • Minimum Initial Investment: £16,295 (plus VAT)
  • USP: Eco-friendly pest control services
  • In operation for over 20 years
  • Full BPCA accreditation
  • Funding support available

Whelan Pest Prevention

  • Minimum Initial Investment: £16,995 (plus VAT)
  • USP: Domestic + commercial pest control
  • Recognised brand
  • Proven business know-how
  • Extensive support and guidance

The Takeaways

  • Research your franchisor carefully.
  • Be prepared to be committed to the business full-time.
  • Know what clearances, licences, permits and certifications are necessary.
  • Choose a territory that’s not serviced by the local council.

Get funding assistance from an experienced lender.

Pet Franchises UK – Turn Your Passion into a Business

September 11, 2018

Pet Franchises UK. If you’re passionate about pets, running a pet franchise can be a great way to support your passion with an attractive, stable and fun income source.

The world of business is always on the move. Almost every industry out there is on the verge of a revolution – one step away from being disrupted. All it takes is one new idea for the entire landscape to undergo a paradigm shift. Despite this, some tenets of doing business are permanent.

Take passion, for example. Without an innate urge to feed it, would we ever see the first car, the first television, the first computer or, for that matter, the first book? While treading on the fences of feasibility, market research and competition, it’s also important to know and understand the role that passion plays in the success of a business. And when it comes to franchising, there’s no better candidate to vouch for this fact than pet franchises.

Running a pet franchise, unlike other forms of franchising we regularly discuss in our blogs, is a delicate proposition. If you can match your customers’ love and passion for their pets, pet franchises have some exciting opportunities for you.

Pet Franchises – Is There Room for One More?

The pet industry in the UK is an interesting phenomenon. The whole idea of selling products and services to pet owners appears to be a frivolous, micro-niche concept – especially to the uninitiated. To dispel this false notion, all you have to do is take a quick look at the numbers.

Pet Franchises

UK National Spending on Pet Services and Products (www.franchise4u.co.uk)

  • As of 2018, approximately 12 million UK households have at least one pet. This means that roughly 45% of all UK households have pets.
  • Quite predictably, dogs and cats are the two most popular pet choices among these households.
  • 26% of all UK households have pet dogs. The total number of pet dogs in the UK is thought to be upwards of 9 million.
  • 18% of all UK households have pet cats. The total number of pet cats in the UK is approximately 8 million.
  • The pet population in the UK has, however, declined from 71 million in 2013 to 51 million in 2018.
  • The overall spending on pet services, care and products, however, has drastically increased in the same period – from £3.77b in 2013 to £4.61b in 2018.

Sources: Pet Food Manufacturers’ Association

Compilation 1

Compilation 2

As can be seen from these numbers, the pet-peripherals industry in the UK is definitely large enough to accommodate innovation and expertise from new businesses. The very fact that pet owners spend thousands of pounds on services and products – from dog treats and cat litters to high-end healthcare and insurance – for their pets should be enough to substantiate these claims.

In short, the good news is – running a pet franchise in the UK will not have you swim against the market currents!

Recommended: Looking for Some Inspiration? Take a Look at These Fascinating Franchising Success Stories!

That’s Well and Good – But What Exactly Do Pet Franchises Do?

Pet franchises come in as many shapes, forms and functions as the pets they aim to service. For the sake of simplicity and order, let’s try to categorise pet franchises into two broad sections:

Pet Services Franchises

This is the most common and popular section of pet franchises in the UK. These franchises are aimed at providing unique services to pet owners in a way that’s replicable and scalable.

Even though pet owners are usually very passionate about their pets, there comes a time when they need help from professionals. This is where franchises providing pet services come into the frame. The basic idea here is to take the hassle out of the equation for pet owners.

Some common examples of pet services franchises in the UK are:

  • Pet handling (dog walking, dog-sitting, dog boarding, etc.)
  • Pet care (veterinarian care, pet grooming, pet medication, etc.)
  • Pet training
  • Pet assistance (pet hygiene maintenance, pet waste removal, etc.)

The scope here is limited only by the imagination – we have already seen pet yoga studios prosper and flourish!

If you have a bright idea (preferably born out of a necessity), you can even think about setting up your own business and having it franchised at a later stage.

Pet Products Franchises

Pet products franchises, in many cases, can also be categorised as retail, high-street franchises. These franchises aim to provide a variety of products to pet owners. Common examples include:

  • Pet foods
  • Pet supplements
  • Pet accessories
  • Pet clothing (yes, really!)
  • Pet safety gear
  • Pet housing

The list just goes on and on. Pet products franchises, when compared to pet services franchises, are more scalable. They are also easier to replicate across categories. So, if you bring to the table some retail experience, these franchises can be a good fit for your interests.

How Much Does It Cost to Buy and Run a Pet Franchise in the UK?

Let’s get to the real issue now – the initial investment and working capital. As you may already know, these are the usual suspects among bottlenecks that make running a franchise business challenging.

The initial investment will depend largely upon the franchisor you choose. A popular franchisor who has a large number of would-be franchisees showing interest each month certainly will cost you more. A quick survey of the available opportunities shows that a small to medium sized pet services franchise can cost you anywhere between £5,000 and £15,000 in initial investment.

This number, however, doesn’t paint the complete picture. In addition to the initial investment that typically covers for franchise fees, know-how, necessary equipment/training and marketing, you will be required to pay for operational costs, royalties, staff salaries, insurance, rent and other incidental expenses. So, it’s safe to say that you can buy and run a pet services franchise in the UK with a total working capital of £20,000 or more.

Pet products franchises tend to cost more, thanks to the larger expenses required to onboard inventory.

Recommended: Things You Must Know Before Buying a Franchise

The Earning Potential of Pet Franchises in the UK

As is the case with every business out there, there really is no upper cap on how much you can make. More realistically, however, pet franchises can generate enough profit to become a reasonable source of primary income for the owner.

The first thing to take into account in this regard is the location you want to operate in. The ongoing trends reveal that pet franchises have it easier in urban markets with high concentration of potential customers. Hence, operating such a franchise in a suburb of a mid-sized city can be both affordable and profitable. The tall claims that franchisors tend to make (from £50,000 to £300,000) often come with a series of stipulations and riders. So, it’s more prudent to take a conservative view of the earning potential of a franchise before you invest your hard-earned money into it. A pet franchise operating in a reasonably well-primed territory can break even in 12-30 months.

This is best illustrated with a representative example.

Pet Franchises – How Much Do They Make?

A small-sized dog grooming franchise costs about £12,000 in franchise fees. This one-time investment covers for all the essentials – from training to marketing. In additional, the initial working capital of – let’s say – £10,000 will be required to get the business up and running. Monthly expenses to the tune of further £10,000 to £12,000 mean that you will spend approximately £150,000 by the end of your first year.

Let’s say the territory allocated to you houses 20,000 households. Given the average pet population statistics discussed earlier, this territory can be expected to have approximately 5,000 households with one or more pet dogs. The first-year market penetration of 10% will mean that you will service 500 customers each month during your first year.

Most dog breeds require topical grooming once every four weeks. If you charge £35 per grooming session, you can expect to make £17,500 per month, or £210,000 per year. Discounting the overall investment and operating expenses from this amount, you will be left with £60,000 in profits for the first year.

Please note that this is a representative example, and the actual returns on your investment will vary, based on numerous factors.

Should You Buy a Pet Franchise?

Pet franchises, while not entirely unlike other franchises, are unique in their own right. It takes a different, more personal approach to decide whether they are a good choice for your business endeavours. For starters, you can try asking the following questions of yourself:

  • Are you incredibly passionate about pets?
  • Do you own a pet? Do you identify with the passion your customers have about theirs?
  • Are you ready to follow a business model that’s based solely on organic growth?
  • Are you comfortable with the initial investment that will be required to get started?
  • Do you bring on board any relevant business skills?
  • Do you have what it takes to withstand competition in your territory?
  • Have you ever used the services of similar franchises for your pets? How do you plan on offering a better experience for your potential customers?
  • Have you conducted thorough market research?

Pros and Cons of Buying and Running a Pet Franchise

  • A great way to channel your creative forces and passion
  • Easy to follow templates
  • Established brand value
  • Making new connections, meeting new people, learning the ropes on the go
  • Extremely rewarding work experience
  • Opportunities to innovate
  • Opportunities to create employment
  • Relatively lower investment/working capital required
  • Reach profitability in a matter of months
  • Easy to secure capital
  • Number of stringent rules, regulations, codes, norms and laws to abide by
  • No room for error
  • Extremely personal nature of the business
  • Difficult to scale

Insurance for Pet Franchises

We have already discussed the importance of having in place an adequate insurance cover for franchise businesses in this blog post. Thanks to the nature of their business, pet franchises need to be more attentive while chalking their insurance plans.

Important insurance covers that a typical pet franchise will need are:

  • Employers’ Liability Insurance

All businesses must have Employers’ Liability Insurance to cover for their employees. If you run a pet franchise, your employees will always be prone to being injured ‘on the job’. Therefore, it’s a good idea to opt for an extra-conservative, more-than-sufficient Employers’ Liability Insurance as a routine operational expense.

  • Public Liability Insurance

The cases of pets causing injuries or distress to the general public are all too common. At times, these damages can end up crippling your business to the point of no return. Therefore, to avoid meeting such unfortunate ends, it’s essential to go for a wide-enough Public Liability Insurance cover.

  • Custom Business Insurance

This part of the overall insurance scheme is often ignored by many pet franchise owners. If you are taking custody of customers’ pets or offering pet products, it’s of utmost importance to have your business covered by a custom business insurance plan. Such plans can be quite handy in covering for any accidental injuries or harm to pets in your care.

Recommended: Struggling for Finance? Our Franchise Finance Guide Has Answers!

Important Codes, Rules and Laws for Pet Franchises in the UK

Pet businesses are required to follow numerous laws, rules and codes before they start trading. The best way to know more about these is to talk to a qualified business lawyer, as well as the franchisor. Some of the common and relevant references in this context are noted below:

Top Pet Franchises in the UK

Let’s take a look at some of the most popular pet franchises in the UK to give us an idea about their USPs, the initial investment required and the features they offer to their franchisees.

Oscar Pet Foods

  • Minimum Initial Investment: £8,995 (plus VAT)
  • USP: Customised nutrition for pets
  • Thorough guidance and pet behavioural training
  • Popular brand name
  • Extensive marketing support
  • Corporate clothing, accessories, liveries and other paraphernalia included
  • Bespoke marketing tools
  • E-Commerce advantage
  • Full BFA Member

Canine Creche

  • Minimum Initial Investment: £42,500 (plus VAT)
  • USP: State-of-the-art dog boarding
  • One of the first national dog care and boarding brands
  • Deep market penetration; 20,000+ annual visits
  • Full accounting support and software setup
  • Choose from fixed/percentage royalty schemes
  • High-end kennelling facilities and training

Longcroft Luxury Cat Hotel

  • Minimum Initial Investment: £50,000 (plus VAT)
  • USP: Premium, high-end cattery
  • The best-known cat hotel chain in the UK
  • Full staff training
  • Extensive knowledge transfer
  • Ongoing support

Barking Mad

  • Minimum Initial Investment: £10,000 (plus VAT)
  • USP: Affordable home dog boarding; Holiday boarding for dogs
  • Exclusive territory allocation
  • Quick deployment of the business
  • Full training and marketing support
  • 2016 Amazon Growing Business Award winner
  • Extensive online marketing
  • Full BFA Member

Trophy Pet Foods

  • Minimum Initial Investment: £8,000 (plus VAT, excluding the costs of mobile van)
  • USP: Direct-to-home mobile pet food delivery
  • In business for 25+ years
  • One of the first specialty pet franchise businesses in the UK
  • Ongoing customer satisfaction, nutritional guidance and marketing training
  • Ready-to-replicate business template
  • Brand accessories, livery and packaging
  • Full BFA Member

Dial A Dog Wash

  • Minimum Initial Investment: £14,999 (plus VAT, excluding the costs of mobile van)
  • USP: New-age dog grooming service
  • Inclusive of a grooming parlour with modern equipment
  • Full training and ongoing sales support
  • Exclusive territory with 175,000+ people
  • Online presence, social media support
  • Inclusive of 1-year PL Insurance

* Fees & features mentioned on this page are merely indicative and subject to change.

The Takeaways

  • If you are passionate about pets, you already have an edge in this business.
  • You can get started on a small budget, without looking for external funding.
  • A well-run pet franchise can turn profitable in a matter of months.
  • It’s important to choose and optimise your territory.

Brace yourself for hefty marketing expenses to acquire customers.

Franchising Market Research 101 – A Complete Market Research Guide for UK Franchisees

August 15, 2018

Thorough franchising market research can pre-empt many problems – from securing affordable finance to maximising the returns on your investment. Learn more about franchising market research in this complete franchise4u guide tailored for novice UK franchisees.

So, you’ve finally decided to give franchising a serious try. You’ve started looking at various opportunities, talking to people-in-the-know and spending hours reading about the challenges, methods and success stories. But where does the preparation stop, and the work begin? How do you find a good franchise opportunity? How do you research the market, grab the numbers and analyse them to draw valid conclusions? Isn’t this all much too confusing, if not downright disorienting?

If it makes you feel a little more at ease, there are thousands – if not tens of thousands – of people like you who know what they need to do but have no idea how. In case you still haven’t familiarised yourself with what franchising is, how it works, why it’s on the rise in the UK and everything else would-be franchisees need to know, do visit and bookmark our free franchisee guides. Once you’ve gone through all of them, you’ll be more sure-footed about whether franchising is a good choice for you and the amount of hard-work, dedication and perseverance it takes to make a franchise profitable.

Once there, do come back to this page – and everything that follows below will make a lot of sense to you.

So, let’s get started!

Franchising Market Research – The Importance of Getting It Right

Running a business is, at the end of the day, all about staying on the right side of the numbers. If you can make numbers work in your favour, you’ve won the battle and you’re well on your way to winning the war, as well. That, perhaps, is the best way of saying that market research matters – a lot.

“What is research, but a blind date with knowledge?”

  • William Henry

William Henry, one of the leading British chemists of all time, has said in less than ten words what we will struggle to say in a thousand. Research of every which kind, from the scientific and artistic to the academic and entrepreneurial, has only a few definite objectives to aim at – learning things, gathering data, finding facts, uncovering myths and getting one step closer to the truth.

Market research is not at all different in this regard. As a franchisee, the market research campaigns you conduct will tell you a whole lot more about the business than the franchisors are willing to let through. More importantly than learning the good about your future franchise business, you’ll learn the bad and the ugly. That, in our opinion, is one of the most significant benefits that franchising market research offers.

Benefits of Franchising Market Research

  • Better insights into the state of the market in terms of supply and demand
  • Better understanding of the target demographic
  • Better knowledge about the existent competition
  • Clearer grasp on numbers
  • Higher chances of being able to secure franchise finance

Now that we have established – in principle, at least – why franchisees must conduct market research, let’s move on to what it exactly is.

Recommended: Here’s Why You Should Never Ignore Resale Franchise Opportunities.

What Exactly Is Franchising Market Research?

To understand what franchising market research is, we first need to understand the scope of business market research in general.

Researching a potential business opportunity invariably involves researching the market itself. A savvy entrepreneur with a brilliant idea could still get it all wrong by entering the wrong market or entering the right market at the wrong time. A typical business market research project will aim to shed light on the following:

  1. The market appetite – the interplay between the supply and the demand
  2. The purchasing power of the target demographic
  3. The inherent utility value of the product or service being sold
  4. The economic viability study
  5. The competition review/intelligence

As we mentioned earlier, these are the standard questions most business market research studies seek answers to. But when it comes to franchising, some fine-tuning is required. After all, to get the right answers, you need to ask the right questions!

Let’s see how this process shapes up for franchise market research in the UK.

1. The Market Appetite

The tug-of-war between the supply forces and the demand forces is at the very heart of modern economics based on the fair competition as envisioned by Adam Smith. So, if you’re about to dive into the world of franchising, you must – and there’s no way around this – be not only familiar but also proficient in the understanding of these ideas.

What is Supply?

The supply forces are, in the simplest of terms, the collective availability of a given product or service in a given location. The rarer the products, the easier the business!

What is Demand?

The demand forces are made up of the need and desire quotients of a given product or service in a given market. For a small business with limited market-muscle, it makes a lot of sense to swim along the supply current, rather than trying to break through.

Making sense of these forces is much easier than it may appear. It’s all, eventually, about common sense. You sell what sells and you don’t what doesn’t – that’s the gist of it all.

So, when you decide to buy a franchise or enter a particular franchise industry, you should always know how ‘hungry’ the market is for the things or services you are going to sell. The market appetite is a massively important factor in the success of a business, and the eventual scalability.

2. The Purchasing Power of the Target Demographic

The purchasing power of the demographic you will be targetting should always be the backbone of your important business strategies – from selecting the right products to setting the right prices.

If you are going to buy a luxury fitness franchise, it goes without saying that you first need to study the average fitness expenditure of a family in your franchise territory. It will make all the more sense to switch to an affordable yet feature-rich gym franchise if the territory you want to operate in is a predominantly middle-class suburb.

3. The Inherent Utility Value of Your Business

Not all businesses can stand the test of time. The ‘death-rate’ of new businesses in the UK – standing at 12% – is a telling number in this regard.

What goes wrong in all these cases, then?

The reasons can be many and wildly diverse, starting from the common lack of capital to a chain of rare, unprecedented market upheavals. But the recurring theme in many of such business-demises is the loss of value of the product being sold. So, when you are choosing and buying a new franchise, you should always be adequately sure of the fact that what you’re selling will still be a valuable commodity or service ten years down the line.

This is a solid reason why service-based franchises are so common around the world. Services like childcare, fitness or domestic cleaning are never really going to run out of takers, meaning that if you buy such a franchise, you can be fairly certain of business longevity if you run your business the right way.

4. The Economic Viability Study

Your franchising market research enters a critical stage at this point.

Since it’s all about making profits, the economic viability/feasibility study will always be the cornerstone of not only your business plan, but your business itself. You will make every single business decision based on this study, and so will your creditors and investors. So, it’s of utmost importance to have a fair, conservative and fact-based economic feasibility study before you invest a single pound into a franchise business.

Such a study is aimed at giving you a good idea of the following:

  • The Incomings

The incomings predominantly involve the revenue your business can generate based on various factors, chiefly the market appetite, that we have already discussed.

Let’s consider the example of a fitness franchise that will operate in a mid-sized city. The territory allotted to your franchise covers, say, 15,000 households accounting for 35,000 adults. If your projections show that you can successfully get 2% of these people on board, you can hope to see 700 new registrations throughout your first year. A monthly membership fee of £25 means that you can generate a sum of £17,500 per month (upon surviving the first year).

This will be the primary – in most cases the only – component of your incomings.

  • The Outgoings

The outgoings account for every expense that you need to make in order to keep the business running. From the interest on the borrowings to staff salaries and from franchise royalties to maintenance/operational expenses, there are numerous heads under which the outgoings will be divided.

Carrying on with the last example, let’s assume that the monthly expenses collectively amount to £12,000. This will mean that your franchise will generate a net profit of £5,500 per month, based on conservative estimates.

The primary focus of carrying out this study is to make sure that the business has enough potential to generate adequate returns on your investment within 2-3 years. If not, it may well be prudent to look at the next opportunity that comes your way. If you aren’t familiar with how these studies are conducted, it’s a good idea to hire a professional business analyst and an accountant to crunch these numbers for you. It will not only lend a third-party, neutral perspective to the whole endeavour, but also assure your prospective lenders about the promise that your business holds.

5. The Competition Review/Intelligence

The next up is the review of your competition – local, national and even global.

The stress here will, of course, be on the local competition. This competition includes the local businesses that are in direct competition with yours, along with the ones that may pose a tangential or peripheral challenge. Reviewing your competition essentially includes taking stock of what the competitors are doing right, where they are lacking and how you can capitalise on those ‘openings’. Some common parameters to study in this regard are: ongoing prices for the competing products or services, marketing budget, brand recognition, territory exploitation, relationships with suppliers etc.

The customer acquisition strategy for your future business will be directly impacted by the actions of your competitors, and hence, conducting a thorough review of the competition should be an integral part of your market research project.

Ways to Conduct Franchising Market Research

Now that we’ve seen what market research is, you must be wondering how you can stay on top of all these minutiae without any prior experience.

The answer is – you don’t always have to!

There are numerous market research companies out there that can – at no great costs – can provide fast, reliable and comprehensive market research. You should, however, always know how to interpret the reports provided by such professionals in order to make the right calls.

If you don’t wish to hire such professionals, you can invest a few weeks of your own time to find out the ground reality of the business you want to enter. Talking to existing franchisees, as we have suggested in many of our free franchising guides, is a great starting point in this direction.

Recommended: The Latest News, Events & Developments in the UK Franchising World – Bookmark This!

The Internet, Social Media and Networking – An Open Secret to Franchising Market Research

There’s no equivalent event, creation or design throughout human history that can possibly rival the impact that the internet has had on human life. This invisible giant, quite literally, rules every waking moment of our lives, and there’s no reason why you can’t harness its power to fuel your very own and fully organic franchising market research project.

A small step – as easy as Googling the franchisor, the franchisees, the brand and the competition – can reveal a great deal of information. This information can well be the base for the next steps in researching the market. Moving on, you can visit the social media profiles – Facebook, Instagram, Twitter, Pinterest, to name a few – of your competitors to see what they’ve been up to, how engaged their customers are with their profiles and what sort of ‘social proof’ their products or services have established.

Pro franchise4u tip: Save/bookmark the social handles of your competitors – they will all come in handy if and when you decide to run marketing campaigns on Facebook or Google.

As an extension of this effort, you can visit LinkedIn and extract the email addresses of franchisees who work with the same franchisor or within the same industry; popular suppliers; industry experts and analysts. Writing personalised emails requesting more information or answers from people who’ve been there before you often yields great results.

Franchise Market Research – A Handy Questionnaire

Why have you shortlisted this industry?
Why have you shortlisted this franchisor?
What do you know about this industry?
How do you see the product/service you want to sell?
Have you used this product/service yourself? What is your perception of the brand value of the franchisor?
Do you live in the territory you want to operate your business in?
Are you familiar with the ‘ground reality’ of the market in this territory, in regard with this business?
What does the market appetite study indicate?
What does the purchasing power study indicate?
How scalable do you think this business will be, based on the inherent utility value of the products/services being sold?
Have you conducted an expansive economic feasibility study? What does it suggest about the potential profitability?
How much competition do you expect to face in your territory? What more does the competition review tell about the challenges in this aspect?

The Takeaways

  • You must carry out thorough franchising market research before finalising an industry or a franchisor.
  • It often pays to get professional market research services involved, once you have shortlisted franchisors.
  • Having ready a comprehensive market research report is a key to securing franchise finance.
  • Be conservative while projecting numbers.

Assume a neutral – at times critical – view of seemingly favourable stats.