There’s more than one way…

Not to skin a cat, but to build a franchise.

The franchising we usually talk about should, more accurately, be called Business Format Franchising.

That’s when someone has an ace idea and writes it all down (the format) and adds it to a brand and some support (the business) and sells it under a license to other people so they can do the same (the franchise).

Business Format Franchising.

But I was reminded today that franchising is a flexible model that can work well in a number of different scenarios.  Take just plain old franchising, for example, like the National Football League in the states, or our own dear old rail network.

This is still franchising; the owner of the NFL trade mark awards franchises to businesses who want to play in their league.  They agree to play by the rules, the schedules and other edicts issued by the NFL but they are free to run their businesses as they see fit… there isn’t a format they have to follow.

So, back to dear old blighty.

I was talking, today, to a company that is interested in franchising one part of its business, but isn’t really interested in Business Format Franchising.

They have a different agenda, in that they wish to attract existing businesses who may have reached a plateau to become franchisees.

Typically, in the businesses they are looking at, the owner has reached a plateau because, instead of sticking to what they were good at (business development) in the early days, they now have 20 staff to manage, logistics, operations, IT, finance and the rest of the sh… sorry, the rest of the tasks involved in running a business that turns over, say a million quid.

So, the business I was talking with today want to bring that business under their own operational wing, take away the overheads of each individual business and free up the erstwhile owner’s time to go out and get back to grass roots… in any way that he or she sees fit and worked for them in the past (within reason).

Aside from the obvious ego barrier that has to be climbed or removed I think it could work well.  The business owner will receive the value of the business in commission over a period of time, plus commission on any other business they bring in and the can retain ownership of the business to sell it as an asset later.

They get their money twice, in other words.

There is, I grant you, a fair amount of working out needed to get the detail right but I like the idea… we’ll see if it works!

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