Jim Duffy: Franchising worth a look for start-ups

Jim Duffy says there are 'straightforward' benefits to buying a franchise. Picture: Ian Howarth

When an individual decides to take control of their own destiny and plough their own furrow, I tip my hat to them. And I think it’s plain wrong to be snooty about the type of business anyone starts.

Whether it’s a window-cleaning round, a new healthy snack product, a medical device for palliative care or an app for managing your diary… they all count. We have all heard how new business creation is vital to our economy – and indeed organisations like Entrepreneurial Scotland have this as their aim: to make Scotland the most entrepreneurial country in the world.

There are many routes into starting a new business. Simply Googling “start a new business” results in 1,130,000,000 openings in .74 seconds. There are literally millions of pieces of advice and help online. Allied to this, we have private sector and public sector organisations offering a ton of support.

Franchising worth Â£1bn to Scottish economy by 2020

But one route that many people could consider is buying a franchise. I’m being careful with my language here as one does not adopt a franchise, one buys it. Franchisors make their money from selling new franchises, re-selling old franchises and from monthly fees from franchisees. In essence, that is their business model: new sales, recurring sales and fixed and variable monthly fees. So, is buying a franchise a good way to start a business?

When starting anything from scratch, there are huge unknowns. Starting a business is much like learning a new language. There is a whole new load of stuff you have to deal with: grammar, syntax, vocabulary, written and oral, and so it goes on. I can learn this from a book, audiotapes or attend a night class.

Or I can go to Portugal, for example, and immerse myself in the culture and start learning as I go – on the job, so to speak. In short, there is no easy way, but I will pick what works best for me. This is where franchising comes into play as a contender in the business start-up world. It’s another avenue for anyone who wants to start.

200 Voices: find out more about the people who have shaped Scotland

The benefits of buying a franchise are straightforward. The franchisor will normally provide you with some training, operational manuals that help you run the business, trademarked branding and marketing support. Depending on which franchise you decide upon, it may also include a car, premises or websites.

And the range of franchises to pick from is huge. Some offer flexible working to allow you to manage your new business around your family. Some offer local support, some have a helpline, some will manage the finances and payment systems. From accountancy franchises to van-based enterprises, from oven-cleaning to food, there are stacks to choose from.

Normally, the franchisor will provide you with a designated territory. This is the area that you can operate within. The franchisor will know how many potential customers you could get, based on data they hold and comparables they have elsewhere. Ostensibly, the franchisor has taken a lot of the unknowns out of the way so the franchisee can learn faster what works. You will also have proven methodologies, ways of selling, stock control systems and help with financing.

So, franchising is one way to start. It’s a very decent option. Which one do you choose? Well, that’s up to you. They range from cheap and cheerful to mega-expensive. Remember, you are essentially buying expertise, knowledge, nous and experience, so a lot of the time you get what you pay for.

There are lifestyle franchises and there are full on franchises that will take up all of your time. It depends what decision you make when you decide to start a new adventure. It also depends what experience you have and, importantly, where you are in your life journey.

• Agitator and disruptor Jim Duffy is head of #GoDo at Entrepreneurial Spark

Click here to ‘Like’ The Scotsman Business on Facebook