If you’re leaving university this summer, the first thing we’d like to do is congratulate you on your degree. Then we’d like to bring to your attention an exciting business opportunity that you might not be familiar with: franchising.
Exciting? Well, that’s the problem. Franchising seems to have acquired something of a bad rap over the years. Most young people don’t really understand what it is and those that do tend to think it’s a bit old hat. In reality, the only thing that’s old-fashioned about franchising is this viewpoint. The situation is definitely changing. According to the British Franchise Association, over 20% of new franchisees in the UK are under 30.
This blog will bring you bang up to date and will explain why more and more of those young people in the know are starting to take advantage of this golden opportunity to run their own business. We’ll also explain how you can do the same.
So what is franchising?
Starting your own business is a tempting prospect, but it’s also an intimidating one. Particularly coming straight out of uni, where you have no real business experience. Becoming a franchisee with an established business is a different way of doing the same thing. Think of it as running a business with a safety net.
Essentially, you (the franchisee) buy the right to run your own outlet from the franchisor (the company that runs the franchise) using its brand, proven business model and operating techniques. You’ll also benefit from a comprehensive support package with everything needed to help a newcomer become successful. This includes ongoing training, business advice and marketing support.
A business model with a good track record
To give you an idea of how common franchising is, there are more than 44,000 franchised businesses operating across the UK. And to help you understand why this business method is growing in popularity so fast, here’s an impressive stat: According to the BFA and NatWest Franchise Survey of 2018, around 90% of franchisees reported trading profitably after just two years. You can compare that with approximately 50% of all independent businesses that will go bust within the same time.
So, now you know a little more about franchising, let’s get down to the nitty-gritty.
What are the benefits for graduates of moving straight into franchising after leaving university?
For once, lack of experience is not a problem
Each franchise is different, but usually you won’t need a top-grade degree from a Russell Group university to get your foot in the door. As the franchisor will train you up, you don’t need to worry about your lack of business experience either. What franchisors tend to favour, instead, is the fresh perspective and bucket loads of energy that graduates emerging from university usually have in abundance.
Make a good go of it and the rewards won’t just be financial. You’ll also pick up a wonderful all-round grounding in the art of running a business. Guided by experts within the franchise organisation, you’ll learn about purchasing, marketing, accounting and possibly managing staff too. Above all, you’ll be responsible for making all the key decisions as you shape the strategic direction of your business. Very few jobs in the corporate world will be able to teach you so much in such a short space of time.
Most younger people also like to challenge the status quo. They’re not set in their ways and are willing to think outside the box. Being more open-minded and willing to try new things is a perfect recipe for success in a well-established business organisation.
Do something you truly love
In case you’re wondering, it won’t matter what degree you’ve just secured as you’re unlikely to be restricted by that. Instead, you can choose to work in the industry sector of your choosing, following your heart and working in an area you have a real passion for.
So, if you love sport, you could set up a gym franchise, run a football coaching business or maybe, dare we say it, join Swimtime, the UK’s largest independent swim school. If you’re into motors, there are plenty of opportunities in everything from vehicle repair to car hire. And, if you like animals, there’s a whole array of franchises dedicated to pet care.
What you need to get started
The one drawback for graduates wanting to open a franchise is that you’ll need money to buy into the business. Depending on the brand, the entry cost for a franchise could set you back anything from £300 to £50,000. If you’ve already run up a scary amount of debt with your student loan, then borrowing even more money will probably not top of your wish list right now.
However, putting your business head on for a moment, this could actually be the best and fastest way to get rid of all that debt. To give you a good idea of the amount of money you could be making, talk to other franchisees within the brands network. Make sure you connect with some of the smaller businesses and not just the big boys who may give you a false impression of what’s possible when you start out.
If you do think franchising is for you, you won’t necessarily need to borrow money to get started. You could always consider peer-to-peer lending or crowdfunding. Remember too that, as a franchisee, you’ll be benefitting from things like business guidance and marketing support that you’d need to pay for yourself if you went into business on your own.
Another way to become a franchise owner
If you can’t find a way to organise the necessary funds to buy a franchise, there is another option. Starting off as a franchise employee, and working your way up, until you’re ready to run a business of your own is more common than you’d think.
At Swimtime, for example, we have many examples of individuals who joined us as swimming teachers and are now successfully running their own franchises. Experience of working for a franchise, and understanding how the model works, would certainly stand you in good stead when you apply to run your own franchise.
Sensible choice in the current economic climate
Whichever route in you take, franchising is a good business option with the economy in the state it is today. Leaving university, you will presumably already have started looking for a job. As you might be experiencing, recent problems with the economy will not be making it any easier to find what you’re looking for. With more graduates chasing fewer jobs, franchising can offer you an alternative way to enter the workforce and run your own business at the same time.
Download our franchise eBook here to find out more about the world of franchising.