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LLOYDS BANK Plc/IFRC

FRANCHISING IN BRITAIN
Vol.2, No.1
Cloning Success

Trisha Silvester
Professor John Stanworth
David Purdy
Mark Hatcliffe

PUBLISHED BY LLOYDS BANK Plc &


INTERNATIONAL FRANCHISE RESEARCH CENTRE

FRANCHISING IN BRITAIN Series


May 1997

ISSN 1362-1157
‘FRANCHISING IN BRITAIN’ SERIES

L
NA
The Lloyds Bank Plc/IFRC Franchising in

FR
O

AN
I
AT
Britain series comprised 3 volumes:

CH
RN

IS
TE

E
IN
Vol.1
RE

E
TR
SE
1 Prospective Franchisees, (Hatcliffe,
AR

N
CE
CH
Mills, Purdy & Stanworth), 1995

2 Franchising in Figures, (Purdy,


Stanworth & Hatcliffe), 1996

THE INTERNATIONAL FRANCHISE 3 Secrets of Success, (Silvester,


RESEARCH CENTRE (IFRC) 1993-2007 Stanworth, Purdy & Hatcliffe), 1996
University of Westminster, London, UK.
Vol.2
"The International Franchise Research
Centre (IFRC) is committed to 1 Cloning Success, (Silvester,
improving the understanding of Stanworth, Purdy & Hatcliffe), 1997
franchising. This is achieved by the
publication of impartial research and 2 Franchising Your Business: Getting
by the encouragement of informed Started, (Stanworth, Purdy &
debate." Hatcliffe), 1998. A more recent version
- I franchised my business, so can you
Franchising operates in a dynamic environ- (2002) - is also available.
ment, with new issues and challenges
emerging, including: globalisation, coping 3 Franchisee Success: Perceptions &
with competition, disclosure, industry Barriers, (Nunn, Stanworth, Purdy,
regulation, managing relations with Thomas & Hatcliffe), 1998
franchisee associations, franchisee
recruitment & market saturation. Vol.3

Against this backdrop, the IFRC was 1 Fifth Annual Strategy Seminar:
established in 1993 by Professor John Breaking Out Of The Home Market,
Stanworth (Director of the Future of Work (Stanworth & Purdy, Eds., papers by
Research Group at the University of McCosker, Scott, Hoy & Harris), 1998
Westminster), supported by Brian Smith (ex-
BFA Chairman, franchisee, franchisor and 2 Franchising: The Gender Dimension,
author), and Chair of its Steering Group. (Nunn, Purdy, Stanworth & Hatcliffe),
1998
FOUNDER MEMBERS
Web versions
Founder members and sponsors included:
Barclays Bank, the British Franchise The above reports are now available online,
Association (BFA), Dyno-Rod, Franchise in Acrobat format, published January 2011,
Development Services Ltd., Lloyds Bank via http://www.scribd.com/SME_Research
(now Lloyds Banking Group), Mail Boxes
Etc., Midland Bank (now HSBC), Prontaprint, LIABILITY DISCLAIMER
Rosemary Conley Diet & Fitness Clubs,
Royal Bank of Scotland, The Swinton Group, The information and analysis in each report
and Wragge & Co. is offered in good faith. However, neither the
publishers, the project sponsors, nor the
author/s, accept any liability for losses or
damages which could arise for those who
choose to act upon the information or
analysis contained herein.

International Franchise Research Centre Lloyds Bank Franchising In Britain - Web Versions 2011 p.1
OTHER PUBLICATIONS 14 Direct Selling: Its Location in a
Franchise Typology, 1999
The IFRC published extensively, including
journal articles, book chapters, conference 15 Unravelling the Evidence on
papers and a Special Studies Series (also Franchise System Survivability, 1999
available via http://www.scribd.com/
SME_Research): 16 Survey: Professional Services For
Franchising In The U.K., 2001
1 The Blenheim/University of
Westminster Franchise Survey: Spring ACADEMIC LINKS
1993, 1993
Close links were fostered with universities in
2 Improving Small Business Survival Rome and Pisa (Italy), Haute Alsace
Rates via Franchising: The Role of the (France) and Boston, Minneapolis and
Banks in Europe, 1993 Texas (USA), with a view to research
collaboration. Professor Pat Kaufmann of
3 Targeting Potential Franchisees: Atlanta, Georgia, addressed our inaugural
Industry Sector Backgrounds and annual strategy seminar, in 1994. Overseas
Declared Areas of Interest, 1994 speakers in subsequent years included
Cheryl Babcock, Director of the Franchising
4 The Impact of Franchising on the Institute, University of St. Thomas,
Development Prospects of Small & Minneapolis (1995), Professor Rajiv Dant,
Medium-sized Enterprises (SMEs) in University of Boston (1996), Professor
Europe, 1994 Francine Lafontaine, University of Michigan
(1997), Professor Claude Nègre, University
5 The Blenheim/University of of Haute Alsace (1997), Colin McCosker,
Westminster Franchise Survey: A University of Southern Queensland (1998),
Comparison of UK and US Data, 1995 Professor Frank Hoy, University of Texas at
El Paso (1998), Professor Jack Nevin,
6 Developing a Diagnostic University of Wisconsin-Madison (1999),
Questionnaire as an Aid to Franchisee Professor Tom Wotruba, San Diego State
Selection, 1995 University (1999), Professor Bruce Walker,
University of Missouri, (2000), and,
7 Franchising as a Source of Professor Wilke English, University of Mary
Technology-transfer to Developing Hardin-Baylor (2000).
Economies, 1995
IFRC members were active supporters of the
8 Aspects of Franchisee Recruitment, International Society of Franchising, and
1996 hosted the ISoF 2005 conference in London.

9 Business Format Franchising: The IFRC ceased its research activities in


Innovation & Creativity or Replication 2007, when John Stanworth took retirement.
& Conformity ?, 1996

10 London: A Capital City For Franchisee John Stanworth, Emeritus Professor,


Recruitment, 1997 University of Westminster
http://www.westminster.ac.uk/schools/
11 The Effectiveness of Franchise business
Exhibitions in the United Kingdom,
1997 David Purdy, Visiting Fellow,
Kingston University
12 Franchising: Breaking Into European http://business.kingston.ac.uk/sbrc
Union Markets, 1998
January 2011
13 Succeeding As A Franchisor,
published jointly with Business Link
London Central), 1998

International Franchise Research Centre Lloyds Bank Franchising In Britain - Web Versions 2011 p.2
AUTHORS LLOYDS BANK PLC/IFRC
FRANCHISING IN BRITAIN REPORTS
Mark Hatcliffe is the national franchise
manager for Lloyds Bank Plc, based at their The Lloyds Bank Plc/IFRC report comprises 3
UK Retail Banking Headquarters in Bristol. constituent Issues each year, focusing upon
He is responsible for their strategic franchisors, franchisees and franchising more
development in franchising. broadly. This fourth issue focuses upon the
problems and successes of ‘home-
Trisha Silvester manages/owns Computer grown’ (indigenous) UK franchise systems,
Literacy Ltd., a computer training company having established themselves over the past
based in London. The original survey was decade. The analysis derives from a
conducted in support of Trisha’s MBA comprehensive survey conducted late 1995
qualification in which she investigated the and early 1996.
problems of franchise system development in
the UK.
INTERNATIONAL FRANCHISE RESEARCH
David Purdy is a researcher supporting the CENTRE
Future of Work Research Group and its
interest in franchising. He has also The International Franchise Research Centre
specialised in small business research since (IFRC) is committed to improving the
1985, and publications include authorship of understanding of franchising. This is achieved
‘Risk Capital for Small Firms’, commissioned by the publication of impartial research and
by the Small Business Research Trust. He by the encouragement of informed debate.
has also co-authored studies investigating Membership is suitable for anyone with an
Small Business Management Development interest in franchising and further details are
and Teleworking. available from the address on the rear cover.

John Stanworth is the director of the


International Franchise Research Centre ACKNOWLEDGEMENTS
and has been engaged in research into
franchising since the mid-1970s. He also The International Franchise Research Centre
leads the Future of Work Research Group, is particularly pleased to acknowledge the
based at the University of Westminster, which generous support provided by Lloyds Bank
has a record of specialist research in Plc in sponsoring the research, analysis and
Teleworking, Small Business Development presentation of this report. However, it is
and Human Resource Management. Studies important to note that any opinions expressed
have been undertaken for many clients, in this publication are not necessarily those of
including The Department of Trade & Lloyds Bank Plc.
Industry, The Department for Education and
The Economic & Social Research Council. Finally, we wish also to acknowledge the
support of the participating firms, without
whom the survey would not have been
possible.

Lloyds Bank plc/IFRC Cloning Success (1997) 1


EXECUTIVE SUMMARY ■ Franchise Advisory Councils (FAC) -
Only 14% of our sample had a franchise
This report presents results from a advisory council as a platform for meeting
comprehensive industry survey involving 139 with their franchisees. Of those who did
responding UK franchise systems with up to not currently have such a body, there
10 years experience of franchising. It was relatively little enthusiasm for
analyses responses on a range of issues forming one.
and also compares the views and
experiences of young and mature systems ■ Is franchising a business ‘easy’ ? -
(responding firms were grouped into 3 age The more experience respondents have
bands: 0-2 years [55 respondents], 3-5 years of franchising, the greater is the likelihood
[52] and, finally, 6-10 years [32]). of them considering franchising to be
Comparisons are also drawn between 'particularly challenging'.
franchise systems which had received bank
backing during their start-up phases, and ■ The prospects for franchising - 70% of
those which had not. franchisors thought franchising in Britain
would grow 'steadily' in the future. The
The main findings were: remainder mostly thought it would grow
'rapidly'.
■ Educational attainment - Franchisors
from college backgrounds appear to do ■ BFA membership - Around one-in-three
particularly well as franchise Chief of respondents were members of the
Executives. British Franchise Association. This level
did not vary with age of system.
■ Respondents’ previous experience -
Most franchise companies in Britain are ■ Bank-financed franchise systems -
run by managers whose immediate Franchise systems that were able to
previous experience was that of small attract bank finance at the start-up stage
business entrepreneur. differed quite considerably from their
unsuccessful counterparts in a number of
■ Pilot staffing - Most franchise systems ways. They appeared to take a longer-
employ 0-5 full-time staff equivalent term view of their development, were
(f.t.e.) at the pilot stage. more likely to join the BFA and use other
external sources of advice, were also
■ Staff levels of more experienced more conservative in their expectations of
franchisors - Nearly one-in-four of franchise industry growth generally and
franchise systems still employed no more had a better understanding of what
than 2 staff in their second year of motivated franchisees.
franchised operations. A further one-in-
four employed 3-5, and a similar
proportion employed 6-10.

■ Current franchisor staff levels - Four-


out-of-five franchise systems currently
employed 1-5 field support staff.

■ Services supplied by franchisors to


franchisees - Older systems appeared to
take training most seriously and were
also more likely to supply consumables to
their franchisees.

2 Lloyds Bank plc/IFRC Cloning Success (1997)


INTRODUCTION founders are increasingly likely to be
replaced by non-founder-managers as Chief
The focus of this report is, once again, Executives and Figure 2 (Q7) suggests that
franchise success. That is, the intention is to surviving firms (in the 6-10 years age range)
look at the functioning of real-live franchise are more likely to have college graduates on
systems in order to gain a better their staff than are their younger
understanding of the world they inhabit, and counterparts (in their first two years).
to generate insights into what might be
thought of as 'franchise best practice'. Our Figure 3 (Q7 vs. Q12b) examines franchise
research material is drawn from a major system success in terms of outlets
national study of UK franchisors in their first established rather than simply years of
10 years of operations, and involved 139 survival and correlates this with possession
companies. of a college degree. There is a declining
proportion of non-graduate Founders/Chief
Chief Executives Executives as outlet size increases - falling
from 55% in the smallest systems (0-5
The research probed the influence of the franchise outlets), to 44% in those having
Founders and current Chief Executives - over 50 outlets. Even stronger is the trend
who comprised nearly three-quarters of the towards more highly-qualified support staff in
respondents - on company success, and the larger systems - for such functions as
attempted to examine the relationship franchise director, sales director or franchise
between earlier educational attainment manager. Our previous research has shown
levels and success in running a franchise. that, for the average franchise system, the
Our analysis considered these issues break-even point lies in the 21-50 outlets
against franchise system survival over time range and, as our current results show, this
and also the number of franchise outlets is precisely the point at which graduate-run
established. franchise systems come into their own.

Figures 1, 2 and 3 indicate a degree of It might be suggested that the above


correlation here. Figure 1 (Q6 vs. Q12a) observations can be explained by franchise
suggests that, over time, franchise system systems, as they grow, bringing in new

Figure 1 - Questionnaire Respondents:


By System Franchising Experience

80%
70%
73% 60% Proportion
50% of Sample/
40% Sub-sample
31% 30% (Length of
20% Franchising
Experience)
10%
25% -
27%
6-10 years
Respondent: Founder/Ch. Exec.
3-5 years
Respondent: NOT Founder/Ch. Exec. 0-2 years
ALL

Lloyds Bank plc/IFRC Cloning Success (1997) 3


Figure 2 - Respondent Educational Attainment:
By System Franchising Experience

33%
38% 40%
35%
30%
34% Proportion
29% 25%
of Sample/
14% 20% Sub-sample
19% (Length of
15% Franchising
'O' level GCE/GCSE 10% Experience)
'A' level GCE 5%
-
'A' level to degree level
6-10 years
Degree level/equivalent or above 3-5 years
0-2 years
ALL

graduate Chief Executives but, referring linked with franchise growth rates. This may
back to Figure 2, we see that the increase in be more a case of graduate Chief
the numbers of graduate Chief Executives Executives being intrinsically more
over time is less dramatic than the increase successful from the outset in growing larger

Figure 3 - Respondent Educational Attainment:


By System Size (Number of Franchise Outlets)

44%
55% 60%
50% 50%
Proportion
22% 40% of Sample/
30% Sub-sample
25% 11% 22%
(Number of
20% Franchise
22%
18% 10% Outlets)

Non-graduate (Fndr./Ch.Exec. ONLY) 16% -

Graduate (Fndr./Ch.Exec. ONLY) 51 Plus


12% 2%
Non-graduate (Other respondents) 21-50
6-20
Graduate (Other respondents)
0-5
ALL Franchise
outlets

4 Lloyds Bank plc/IFRC Cloning Success (1997)


Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 4 - Respondent Experience Immediately Prior to Establishment of Franchise:


By System Franchising Experience

60%

70%

60%

16% 50%
Proportion
19%
40% of Sample/
Sub-sample
Small business entrepreneur 5% (Length of
10% 30%
Franchising
Working for the (franchise) company ...
Experience)
Manager in a larger company (employed) 5% 20%

Other (please state) 10%


2%
Solicitor/accountant/other professional
1% -
Small business manager (employed)
1%
No response 6-10 years
1% 3-5 years
Manager in the public sector (employed)
0-2 years
ALL
5
Figure 5 - Number of Full-time Staff Employed During Pilot Phase:
By System Franchising Experience

52% 43%
60%

43% 36% 50%


Proportion
40%
of Sample/
30% Sub-sample
29% (Length of
20%
20% Franchising
Experience)
10%
Whilst piloting: 0-2 FTE staff 13%
-
3-5 FTE staff 15%
6-10 years
6-10 FTE staff
3-5 years
11 or more 0-2 years
ALL

systems than one of the more successful Levels of Pilot Support


systems subsequently appointing graduate
Chief Executives. Figure 5 (Q11c) looks at staffing levels of
franchise systems whilst at the pilot stage.
Chief Executives’ Previous Careers There is a clear indication here that systems
which survived into the 6-10 years age group
Figure 4 (Q10) shows that the majority were better staffed at the pilot stage than
(approximately 60%) of franchise system their counterparts in the 0-2 age group. They
respondents were small business were less likely to have had just 0-2 full-time
entrepreneurs immediately prior to the staff equivalent (43% against 52%) and more
establishment of the franchise system, but likely to have had 3-5 staff (36% against
this figure dropped slightly over time. 20%).

Around a further 19% had worked for an Those in the 3-5 years age grouping
existing company which subsequently set up appeared to approximate closer to their older
the franchise system. counterparts rather than their younger ones.

The next most common background was


working for a larger company elsewhere. It is
interesting here that this kind of background
was 3 times more common in firms that had
survived to the 6-10 years time-frame than
amongst those starting out in the 0-2 years
age group. The picture here appears to be
that of professional outside managers with
larger company management experience
having better survival potential than their in-
house counterparts.

6 Lloyds Bank plc/IFRC Cloning Success (1997)


Figure 6 - Number of Staff Employed by End of 1st Year of
Franchise Operation: By System Franchising Experience

44%
38% 34%
34% 45%
40%
31% 35%
22% Proportion
30% of Sample/
25% Sub-sample
20% (Length of
15% 15% Franchising
0-2 Staff employed (after 1st year) 10% Experience)
3-5 5%
11%
-
6-10
9%
11-20 6-10 years
3-5 years
21 or more
0-2 years
ALL

Staff Size After First Year in Franchising year of operations of younger and more
mature systems. For instance, 44% of
Figure 6 (Q13b) shows some appreciable systems in their first 2 years had 0-2 staff (or
differences in system staffing levels in the first full-time equivalents) compared with only 27%

Figure 7 - Number of Staff Employed by End of 2nd Year of


Franchise Operation: By System Franchising Experience

38%

40%
23% 35%
28%
30% Proportion of
14% 25% Eligible Firms/
21% 20% Sub-sample
(Length of
15%
Franchising
0-2 Staff employed (after 2nd year) 15% 10%
Experience)
5%
3-5
-
6-10 11%
11-20 6-10 years
3-5 years
21 or more
0-2 years
ALL

Lloyds Bank plc/IFRC Cloning Success (1997) 7


Figure 8 - Number of Field Support Staff Provided Currently:
By System Franchising Experience

91%
63%
81% 100%
90%
80%
31% 70% Proportion
60% of Sample/
50% Sub-sample
40%
(Length of
Franchising
14% 5% 30%
1-5 Field support staff Experience)
20%

6-10 10%
2% -
11-20
1% 6-10 years
21-50
1% 3-5 years
More than 50 0-2 years
ALL

and 28% for the 3-5 and 6-10 year-old years age group. If we turn to the healthier
systems. Similarly only 22% of systems in the staffing level of 3-5 people (or full-time
0-2 years range had 3-5 staff compared with equivalent) we find just 14% in the 0-2 years
34-38% for the two more mature categories. age group compared with 38% amongst the
Perhaps it should be pointed out that the 6-10 years group. Thereafter, the figures are
relatively low levels of first year staffing of rather more similar.
systems in the 0-2 years age range in their
first year of operations could not be wholly Field Staff Support for Franchisees
explained by their extreme youth.
Franchisors were asked the strength of their
That is, because of the time lapse between field staff support for franchisees and the
companies becoming sufficiently visible to be results were amazingly consistent (Figure 8,
included in a franchise directory, the directory Q33). Around 95% of all systems had
being published and then operationalised for between 1-10 field support staff. However,
research purposes, it is likely that only a very the proportions with just 1-5 such staff rose
small proportion of the responding companies from 63% amongst the 6-10 years age group
located in the 0-2 years age category could to 91% amongst the 0-2 years age group.
actually have been franchising for less than 1 Conversely, looking at systems with 5-10
year. staff, the figure rose from 5% amongst the
youngest age tranche to 31% amongst the
Figure 7 (Q14b) repeats this picture even oldest.
more clearly across the 3 age groups looking
at staffing levels in year 2 of operations. It has Targeting Franchisees
to be accepted here that some firms in the 0-
2 years age group would only have been in Franchisors were asked which groups they
their second year and so might have been targeted in their search for franchisees
still growing. But, nonetheless, the differences (Figure 9, Q32). 'People with management
are quite dramatic. Looking at the 0-2 years experience' was the group chosen most
group, we see 31% in the 0-2 staff category commonly, except by the most experienced
compared with only 19% of firms in the 6-10 group of franchisors - those with 6-10 years

8 Lloyds Bank plc/IFRC Cloning Success (1997)


Figure 9 - Strongest Preference For Franchisee Backgrounds:
Lloyds Bank plc/IFRC Cloning Success (1997)

By System Franchising Experience

6%

22%

18% 22% 30%


17%
17% 25%

20% Proportion
10% of Sample/
People with management experience Sub-sample
10% 15%
Men (Length of
People with redundancy packages Franchising
Other (please state) (no ranked data) 10% Experience)

Women
4%
People with experience in the field ... 5%

Armed Forces personnel 1%


-
Older people with 'golden handshakes'
1%
Educated to Degree level/equiv. plus 6-10 years
- 3-5 years
Minorities
0-2 years
9

ALL
Figure 10 - Types of Personal Contact Offered to Franchisees:
By System Franchising Experience

93% 100%
90%
78% 63% 80%
70% Proportion
60% of Sample/
50% Sub-sample
40% (Length of
51% Franchising
28% 30%
20% Experience)
Personal contact: telephone 10%
-
Personal contact: on-site visits
14% 5%
Personal contact: visits to franchisor 6-10 years
3-5 years
Other (please state)
0-2 years
ALL

experience. 'Men' were identified as the next Respondents were asked to identify the
most sort-after group, particularly by the more services they provided to their franchisees
experienced franchisors. Next came 'People (Figure 11, Q34a). Respondents from the 3
with redundancy packages', 'Women' and different age groups gave similar responses
'People with experience in the field'. in most instances, with one or two exceptions.
Interestingly, the most experienced group The most experienced group (6-10 years)
(those with 6-10 years experience) had by far were the most likely to give 'training' whereas
the strongest preference for people with the youngest group (0-2 years) were the most
experience in the field of operation. likely to offer 'regular personal contact'. The
Services to Franchisees most substantial difference between the age-
groups appeared to arise in the case of the
Figure 10 (Q34b) shows that franchisors 'supply of consumables' where only 56% of
commonly undertook on-site visits to their the youngest systems offered this services
franchisees but that franchisee visits to the compared with 81% of the most experienced
franchisor were more common with the older- group.
established franchisors. Other methods of
personal contact, noted by the longer-
established systems, included:

● Communiques
● Conference
● Fax
● Four seminars per year
● Monthly newsletter & regional meetings
● Public relations
● Quarterly meetings
● Regular regional & national meetings
● Seminars, conferences, dinners
● Yearly meetings of all franchisees

10 Lloyds Bank plc/IFRC Cloning Success (1997)


Figure 11 - Areas of Support Offered to Franchisees:
Lloyds Bank plc/IFRC Cloning Success (1997)

By System Franchising Experience

95%
91%
88%

83%

81% Supply of consumables


70% 100%
69%
90%
65%
80%
64%
56%
63% 70%
Proportion
Training programme 60% of Sample/
Operating manual
Sub-sample
Personal contact: Regular 50%
48% (Length of
Technical assistance
40% Franchising
Advertising Experience)
Franchise manager 30%
Research and development
28% 20%
Supply of consumables
10%
Pre-opening and opening support 24%
-
Site selection

Premises development 6-10 years


Personal contact: On request 3-5 years
11

0-2 years
ALL
Figure 12 - Existence of a Joint Franchise Advisory Council:
By System Franchising Experience

100%
95% 90%
66% 80%
Proportion
86% 70%
60% of Sample/
50% Sub-sample
34% 40% (Length of
30% Franchising
20% Experience)
10%
-

5% 6-10 years
No 14%
3-5 years
Yes - franchise advisory council 0-2 years

ALL

Franchise Advisory Councils advisory councils but that this figure varied
quite dramatically with age of system. For
Figure 12 (Q35a) shows that only a small instance, only 5% of the youngest group had
minority of respondents (14%) had franchise such systems in place compared with 34% of

Figure 13 - Intention to Establish A Joint Franchise Advisory


Council (FAC): By System Franchising Experience

100%
100%
90%
80%
81% Proportion of
87% 70%
60% non-FAC firms/
50% Sub-sample
40% (Length of
30% Franchising
20% Experience)
10%
-
19%
6-10 years
No 13%
3-5 years
Yes - intend to develop a FAC 0-2 years
ALL

12 Lloyds Bank plc/IFRC Cloning Success (1997)


Figure 14 - Intention to Establish A Joint Franchise Advisory
Council (FAC); 'Yes' Respondents & Expected Outlet Size at FAC
Introduction: By System Franchising Experience

50%
50%
45%
38%
40%
38% 35% Proportion of 'Yes'
30% non-FAC firms/
25% Sub-sample
30% 20% (Length of
15% Franchising
10% Experience)
<=10 Franchise units to develop FAC No 5%
19% -
firms
11-20 6%

21-50 6-10 years


3-5 years
51-100
0-2 years
ALL

older systems. Against that, respondents Interestingly, it was the more experienced
were asked, if they currently had no franchise franchisors who felt that expansion via
advisory council currently, whether they franchising was particularly challenging
intended to set one up. Very few replied (Figure 15, Q36). In fact, only 40% of the
affirmatively (Figure 13, Q35b) and this youngest age group considered franchising
ranged from 19% amongst the smallest group 'particularly challenging' whereas, amongst
to 0% amongst the largest. the more experienced and more successful
firms, this figure rose to close on two-thirds.
Figure 14 (Q35c) identified the number of This certainly points to the fact that the
units at which those intending to set up a managers of young franchise systems under-
franchise advisory council would anticipate estimate the challenges associated with
doing so. 38% said less than 10 units whilst developing a successful franchise system.
exactly the same proportion said 11-20 units.
Perhaps surprisingly, it was noticeable also
Franchising: Challenging or Not? that the older firms also considered
franchising as an easier method of expansion
Attitudes towards franchising as a mode of than conventional means. However, these
business development were also probed, by observations are not necessarily
asking respondents to identify which of the contradictory. In all probability, they relate to
following statements they agreed with: different aspects of franchise management
and growth.
● “Expansion via franchising is easier than
via company-owned units”
● “Expansion via franchising is more cost-
effective than expansion via company-
owned units”
● “Expansion via franchising is particularly
challenging”
● “There is a lack of professional advice on
franchising in the United Kingdom”

Lloyds Bank plc/IFRC Cloning Success (1997) 13


Figure 15 - Attitudes Towards Franchising and Business Development:
By System Franchising Experience

80%
68% 60% 63% 70%
60% Proportion
50% 50% of Sample/
40%
40% Sub-sample
45% 35% 30% (Length of
Franchising
20%
9% Experience)
Expansion via franchising is more cost-effective ... 25% 10%
24% -
Expansion via franchising is particularly challenging
Expansion via franchising is easier ... 6-10 years
3-5 years
Lack of professional advice on franchising in UK
0-2 years
ALL

BFA Membership (BFA). In total, 32% were members whilst the


remaining 68% were not (Figure 16, Q38).
Respondents were asked if they were Interestingly, however, membership figures
members of the British Franchise Association did not rise with age. It might have been

Figure 16 - Membership of British Franchise Association (BFA):


By System Franchising Experience

70%
60%
68%
50% Proportion
of Sample/
40%
Sub-sample
30% (Length of
Franchising
20%
Experience)
10%
32% -

6-10 years
No
3-5 years

Yes - BFA member 0-2 years

ALL

14 Lloyds Bank plc/IFRC Cloning Success (1997)


Figure 17 - Expectations for Franchising in the UK:
By System Franchising Experience

70% 80%
70%
60% Proportion
50% of Sample/
22% Sub-sample
40%
(Length of
30%
Franchising
UK Franchising will expand rapidly ... 20%
Experience)
10%
UK Franchising will grow steadily ... 5% -
UK Franchising will remain static ...
1%
UK Franchising will shrink slowly ... 6-10 years
- 3-5 years
UK Franchising will shrink substantially
0-2 years
ALL

expected that older and larger systems would The Future of Franchising
be more likely to join a trade association such
as the BFA but this was not the case. A Franchisors were asked for their views on the
possible explanation for this might be that likely future growth rate of franchising in
younger systems feel inclined to join in order Britain (Figure 17, Q37). Agreement was
to learn from contact with more experienced uniform across all groups that the most likely
franchisors and also in order to harness the outcome would be a future where franchising
respectability resulting from membership as would 'grow steadily'. Around 70% agreed on
an aid to franchisee recruitment. this point, though over 20% thought 'rapid
expansion' more likely. It is interesting to see
that the over-optimism which sometimes
leads the managements of young franchise
systems to under-estimate the challenges
associated with franchising does not appear
to separate them out on this issue.

Lloyds Bank plc/IFRC Cloning Success (1997) 15


Figure 18 - Extent of Franchising Experience:
By Bank/Non-Bank Financed Systems (Start-up)

46%

50%
40% 45%
40%
37% 35%
30% Proportion
31% 25% of Sample/
20% Sub-sample
17% (Bank support)
15%
23% 10%
5%
Franchising for 0-2 years
0%

3-5
Non-Bank

6-10 Bank-financed

ALL

Bank-financed Versus Non-bank-financed funded by banks at the start-up stage and


those which were not. Figures 18, 19 and 20
An analysis was undertaken to look at show some interesting differences here. For
differences between franchise systems instance, Figure 18 (Q12a vs. Q24) shows

Figure 19 - Main Reason For Choosing Franchising:


By Bank/Non-Bank Financed Systems (Start-up)

41%
38%
36% 45%
40%
35%
30% Proportion
19%
25% of Sample/
15% 7% 20% Sub-sample
Expand without a large management o/head 15% (Bank support)
Access to talented ... owner-managers 10%
6% 5%
Obtain access to low cost capital ... 0%
Pooled resources ... for brand promotion 4%
Non-Bank
Other (please state)
Bank-
ALL financed

16 Lloyds Bank plc/IFRC Cloning Success (1997)


that franchise systems able to attract initial early motive.
bank finance were noticeably older with fewer
firms in the 0-2 years age category and Figure 25 (Q21) shows that the systems
substantially more in the 6-10 year age which were able, or chose, to raise bank
group. This would appear to indicate that finance were also most likely to use other
firms able to attract bank finance were better outside sources of help, including the BFA,
survivors. Figures 19 (Q8) and 20 (Q32) both franchise consultants, solicitors and
show franchise systems unable to attract accountants.
bank finance to be highly interested in using
franchisees as a source of managerial talent, Figure 26 (Q37) indicates that systems that
presumably hinting at inherent weaknesses in were unable to attract early-stage bank
this area. funding were considerably more euphoric
about the chances of rapid franchise industry
Figures 21 (Q16a), 22 (Q16b) and 23 (Q16c) expansion in Britain with nearly one-in-three
look at perceived major threats to survival in expecting 'rapid growth'.
the first 2 years of existence, then 3-5 years,
followed by 6-10 years. Again there are Finally, Figure 27 (Q38) shows bank-
marked differences between systems that financed systems to be nearly twice as likely
gained early bank support and those which to have joined the BFA.
did not. The underlying theme running
through these 3 figures is differences in the
importance attached to 'Shortage of Funds'
and 'Difficulties with Franchisee Recruitment'.
Systems most able to attract early bank
funding attached far greater importance to the
former in the early days and to the latter
several years on. This may, at first sight,
appear odd since it was the systems most
able to attract external finance in the early
days which were also most likely to stress
finance as a major challenge. Our
interpretation of this is that they anticipated
the early years as involving heavy front-end
investment, using mostly either their own
money or loan capital. Their counterparts,
who were unsuccessful in raising bank
funding, or who may not have tried to do so,
were most likely to see franchisee recruitment
as their road to franchise system funding. It is
noticeable in Figure 23 that those able to
attract bank funding in the early days, though
by now larger in terms of outlets, were the
most likely to stress franchisee recruitment as
a problem in the 6-10 years period. We
assume here that this reasoning was due to
their motivation to recruit franchisees as a
means to establishing a national network
rather than simply as a means to generating
income.

Figure 24 (Q17a) suggests that the firms


which were most bankable in the early days
were most accurately aware of the main
appeals which franchising holds for
franchisees (as revealed by our previous
research). Specifically, they were more aware
of the importance of 'Independence' as an

Lloyds Bank plc/IFRC Cloning Success (1997) 17


Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 20 - Strongest Preference For Franchisee Backgrounds:
By Bank/Non-Bank Financed Systems (Start-up)

25%

22%

18%
17%
30%
17%

25%
14%
People with management experience 10% 20%
Men 10% Proportion
5%
People with redundancy packages
15% of Sample/
Other (please state) (no ranked data) Sub-sample
(Bank support)
Women 10%
4%
People with experience in the field ...

Armed Forces personnel 5%


1%
Older people with 'golden handshakes'
1% 0%
Educated to Degree level/equiv. plus
0% Non-Bank
Minorities
Bank-
ALL financed

18
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 21 - Greatest Threats to Survival During First 2 Years:


By Bank/Non-Bank Financed Systems (Start-up)

50%

41%

34%

14%
28% 50%
19%
45%
40%
35%
Shortage of funds (during first 2 years) 10% 30% Proportion
Difficulties with franchisee recruitment 10% 25% of Sample/
Sub-sample
Difficulties in building support network 20% (Bank support)
7%
Other (please state) (no ranked data) 15%
6% 10%
Difficulties with franchisee management
5%
Getting the brandname known 4% 0%
Competition from other franchise systems
2%
Non-Bank
Competition from non-franchised businesses
Bank-financed
ALL
19
Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 22 - Greatest Threats to Survival During Years 3-5:
By Bank/Non-Bank Financed Systems (Start-up)

33%
31%

26%

20%
35%
10%
30%
15% 13%

25%
Difficulties with franchisee recruitment Proportion of
20%
8% Responses (87)/
Shortage of funds (3-5 years)
15% Sub-sample
Difficulties with franchisee management
6% (Bank support)
Other (please state) (no ranked data) 10%
6%
Competition from non-franchised business 5%
5%
Difficulties in building support network
0%
Competition from other franchise systems 3%
Non-Bank
Getting the brandname known
Bank-financed
ALL

20
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 23 - Greatest Threats to Survival During Years 6-10:


By Bank/Non-Bank Financed Systems (Start-up)

38%
36%

33%

23% 40%
15%
35%

30%
10%
Difficulties with franchisee recruitment 25% Proportion of
10%
Difficulties with franchisee management 20% Responses (40)/
10% Sub-sample
Shortage of funds (6-10 years) 15% (Bank support)
Competition from non-franchised business 8% 10%
Other (please state) (no ranked data)
5%
5%
Competition from other franchise systems
0%
Getting the brandname known 3%
Non-Bank
Difficulties in building support network
Bank-financed
ALL
21
Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 24 - Main Appeal of Franchising to Franchisees Initially:
By Bank/Non-Bank Financed Systems (Start-up)

49%

31%
20% 60%
26%

50%

Proven business system (Initially) 8% 40%


Independence/chance to be own boss 8% Proportion
On-going support
30% of Sample/
Reduced risk 5% Sub-sample
(Bank support)
A known trade name
1% 20%
Help with funding
1%
Other (please state) 10%
1%
Good income
0%
1%
Few alternatives available
0% Non-Bank
Good long-term investment
Bank-
ALL financed

22
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 25 - Information Sources Prior to Franchising:


By Bank/Non-Bank Financed Systems (Start-up)

69%
Franchise Consultant
60%
46%
58%
57%

53% 70%

60%
44%
50%

British Franchise Association Proportion


40%
Franchise Consultant of Sample/
30% Sub-sample
Solicitor (Bank support)
Clearing Bank (1 or more) 16% 20%

Accountant 10%
9%
Local Training & Enterprise Council(TEC)
0%
Other agency (please state) 6%
Non-Bank
Chamber of Commerce
Bank-financed
ALL
23
Figure 26 - Expectations for Franchising in the UK:
By Bank/Non-Bank Financed Systems (Start-up)

78% 31%
16%
61%
70%
80%

70%

60%
22% 50% Proportion
40% of Sample/
Sub-sample
30%
UK Franchising will expand rapidly ... (Bank support)
20%
UK Franchising will grow steadily ... 5%
10%
UK Franchising will remain static ... 0%
1%
UK Franchising will shrink slowly ...
0% Non-Bank
UK Franchising will shrink substantially
Bank-financed
ALL

Figure 27 - Membership of British Franchise Association (BFA):


By Bank/Non-Bank Financed Systems (Start-up)

76%

80%
61% 70%
68% 60%
50% Proportion
40% of Sample/
30% Sub-sample
39% 24%
20% (Bank support)
10%
32% 0%

No
Non-Bank

Yes - BFA member Bank-financed

ALL

24 Lloyds Bank plc/IFRC Cloning Success (1997)


FRANCHISING GROWTH:
A STUDY OF U.K. BUSINESSES

To be completed by the Founder or the current Chief Executive, if at all possible - CONFIDENTIAL

1 Franchise trading name: 9 In which year was franchising first pursued for
this business (i.e. by spending time and money):
_______________________________________ Year _______________________________

2 Please describe the main product/service in a 10 Immediately prior to the establishment of


few words: this franchise, were you: (just one )
_______________________________________
A small business entrepreneur.................... A
A small business manager (employed) ....... B
3 Name of any holding company: A manager in a larger company (employed) C
A manager in the public sector (employed) D
_______________________________________ Working for the company that finally set up E
the franchise, if it is a subsidiary
A solicitor/accountant or other professional F
4 Name of founder: specialist
Other (please state) G
_______________________________________
____________________________________

5 Current chief executive:


11 Market testing:
_______________________________________
a) Was the business ‘piloted’ (tested as a
functioning outlet) before the recruitment
6 Name of person answering the questionnaire, if of the first franchisee
not the Founder/current Chief Executive: Yes .............................................................. A
_______________________________________ No ................................................................ B
Position/title _____________________________
b) If ‘Yes’ - for how long was the pilot running
PRIOR to the recruitment of the first franchisee

7 What was your highest level of personal


6 months or less .......................................... A
educational attainment: 7-12 months................................................. B
‘O’ level GCE/GCSE .................................... A 13-18 months............................................... C
‘A’ level GCE................................................ B 19-24 months............................................... D
Between ‘A’ level and degree level.............. C 2-3 years...................................................... E
Degree level/equivalent or above ................ D More than 3 years........................................ F

8 What was the MAIN reason for choosing c) If ‘Yes’ to a) - how many full-time staff, on average,
were employed whilst this franchise
franchising as a growth strategy: (just one )
was being piloted (1 part-time = 0.5 full-time)
To obtain access to low cost capital for A
business growth
0-2 full-time staff (or equivalents) ................ A
To use pooled resources of franchisees B 3-5 ............................................................... B
for brand promotion 6-10 ............................................................. C
To obtain access to talented and motivated C 11 or more ................................................... D
owner-managers
To expand without a large management D
overhead
Other (please state) E
___________________________________

1 Please continue overleaf ...


12 CURRENTLY:
b) How many staff did you directly employ
a) How long has this business been franchising 0-2 staff directly employed .......................... A
0-2 years ...................................................... A 3-5 ............................................................... B
3-5................................................................ B 6-10 ............................................................. C
6-10.............................................................. C 11-20 ........................................................... D
11 years or more.......................................... D 21 or more ................................................... E

b) How many franchise OUTLETS do you have


0-2 outlets .................................................... A 14 After the SECOND year of franchise operations:

3-5................................................................ B
a) How many franchisees had you recruited
6-10.............................................................. C
0-2 franchisees............................................ A
11-20............................................................ D 3-5 ............................................................... B
21-50............................................................ E 6-10 ............................................................. C
51-100.......................................................... F 11-20 ........................................................... D
101 or more.................................................. G 21-50 ........................................................... E
c) How many FRANCHISEES do you have
51 or more ................................................... F
0-2 franchisees ............................................ A
3-5................................................................ B b) How many staff did you directly employ
6-10.............................................................. C 0-2 staff directly employed .......................... A
11-20............................................................ D 3-5 ............................................................... B
21-50............................................................ E 6-10 ............................................................. C
51-100.......................................................... F 11-20 ........................................................... D
101 or more.................................................. G 21 or more ................................................... E
d) How many staff do you directly employ OR Question not applicable - company not G
0-2 staff directly employed........................... A yet operational for a full 2 years
3-5................................................................ B
6-10.............................................................. C
11-20............................................................ D 15 After the FIFTH year of franchise operations:

21-50............................................................ E
a) How many franchisees had you recruited
51 or more.................................................... F 0-2 franchisees............................................ A
3-5 ............................................................... B
e) Out of the total number recruited, how many of the
business’s franchisees are still with you 6-10 ............................................................. C
All (100%) .................................................... A 11-20 ........................................................... D
90-99%......................................................... B 21-50 ........................................................... E
80-89%......................................................... C 51-100 ......................................................... F
70-79%......................................................... D 101 or more ................................................. G
60-69%......................................................... E
b) How many staff did you directly employ
50-59%......................................................... F
Fewer than 50%........................................... G 0-2 staff directly employed .......................... A
3-5 ............................................................... B
6-10 ............................................................. C
13 After the FIRST year of franchise operations: 11-20 ........................................................... D
21-50 ........................................................... E
a) How many franchisees had you recruited 51 or more ................................................... F
0-2 franchisees ............................................ A
3-5................................................................ B OR Question not applicable - company not H
yet operational for a full 5 years
6-10.............................................................. C
11-20............................................................ D
21 or more.................................................... E
2 Please continue overleaf ...
16 Based on your own direct experience, which 3 of 17 What do you think is the MAIN appeal of
the following factors do you see as being the franchising to franchisees:
greatest threat to the survival of a franchise
a) When they first join a franchise system
system - please rank 1 (=greatest threat), 2 & 3:
(just one )
a) During the FIRST 2 YEARS
A known trade name.................................... A
(Rank 1/2/3)
A proven business system .......................... B
Shortage of funds......................................... _____ A
On-going support......................................... C
Difficulties with franchisee recruitment ........ _____ B

Difficulties with franchisee management ..... _____ C


Help with funding......................................... D
Competition from other franchise systems _____ D
Independence/chance to be own boss........ E
Competition from non-franchised _____ E
Reduced risk................................................ F
businesses Good income ............................................... G
Difficulties in building up a franchisee _____ F Good long-term investment ......................... H
support network Few alternatives available ........................... I
Getting the brandname known..................... _____ G
Other (please state) J
Other (please state) _____ H
____________________________________
___________________________________

b) When they are established


b) 3-5 YEARS after beginning franchising (just one )
(Rank 1/2/3) A known trade name.................................... A
Shortage of funds......................................... _____ A
A proven business system .......................... B
Difficulties with franchisee recruitment ........ _____ B
On-going support......................................... C
Difficulties with franchisee management ..... _____ C
Help with funding......................................... D
Competition from other franchise systems _____ D

Competition from non-franchised _____ E


Independence/chance to be own boss........ E
businesses Reduced risk................................................ F
Difficulties in building up a franchisee _____ F Good income ............................................... G
support network Good long-term investment ......................... H
Getting the brandname known..................... _____ G Few alternatives available ........................... I
Not applicable (e.g. no experience) ............. _____ H Other (please state) J
Other (please state) _____ I
____________________________________
___________________________________

c) After several years in the franchise


c) 6-10 YEARS after beginning franchising (just one )
(Rank 1/2/3) A known trade name.................................... A
Shortage of funds......................................... _____ A
A proven business system .......................... B
Difficulties with franchisee recruitment ........ _____ B
On-going support......................................... C
Difficulties with franchisee management ..... _____ C
Help with funding......................................... D
Competition from other franchise systems _____ D
Independence/chance to be own boss........ E
Competition from non-franchised _____ E
businesses Reduced risk................................................ F
Difficulties in building up a franchisee _____ F
Good income ............................................... G
support network Good long-term investment ......................... H
Getting the brandname known..................... _____ G Few alternatives available ........................... I
Not applicable (e.g. no experience) ............. _____ H Other (please state) J
Other (please state) _____ I
____________________________________
___________________________________

3 Please continue overleaf ...


18 Which ONE of these statements do you most 21 When you entered the field of franchising, did you
agree with (just one ): seek information on franchising from:
Running a franchised outlet is very British Franchise Association ...................... A
much like... Local Training & Enterprise Council (TEC) B
Running your own independent small A Chamber of Commerce ............................... C
business
Running your own independent small B
Franchise Consultant .................................. D
business but with a few more strings Accountant................................................... E
attached Solicitor........................................................ F
Half-way between running your own C Bank:
independent small business and running a
managed outlet of a large company
- Barclays..................................................... G
Running a managed outlet of a large D
- Lloyds........................................................ H
company but with fewer strings attached - Midland...................................................... I
Running a managed outlet of a large E - National Westminster ................................ J
company - Royal Bank of Scotland............................. K
- Other bank (please state) L
____________________________________
19 Do you prefer as franchisees:
Other agency (please state) M
a) People with prior experience in the operational
line of the franchise ____________________________________
Yes............................................................... A
N
No ................................................................ B Which was the MOST helpful

____________________________________
b) People with prior experience of self-employment
Yes............................................................... A P
Which was the LEAST helpful
No ................................................................ B
____________________________________

20 Have your ideas on who makes a good franchisee


changed over time:
22 When entering franchising, did you prepare a
a) Yes............................................................... A detailed business plan at the outset:
No ................................................................ B Yes .............................................................. A
Not a full plan, but committed ideas to B
b) If ‘Yes’, please describe in what way they have paper
changed No ................................................................ C
_______________________________________
_______________________________________ 23 How much finance overall had been invested
_______________________________________ to establish the franchise system (including
_______________________________________ any earlier related investments), by the time
the FIRST franchisee had been recruited:
_______________________________________
Up to £20,000 .............................................. A
£20,001-£50,000 ......................................... B
£50,001-£100,000 ....................................... C
£100,001-£200,000 ..................................... D
£200,001-£500,000 ..................................... E
Over £500,000............................................. F
Don’t know................................................... G

4 Please continue overleaf ...


24 Of the above overall investment, how much was 27 Break-even size - how many franchise units do
obtained from a clearing bank(s): you need for the management services (royalty)
income to sustain the overhead of an optimum
Up to £10,000 .............................................. A network without the need for further units, i.e. by
£10,001-£25,000.......................................... B ignoring any ‘front-end’ franchisee fee income:
£25,001-£50,000.......................................... C 1-5 units....................................................... A
£50,001-£100,000........................................ D 6-10 ............................................................. B
£100,001-£250,000...................................... E 11-20 ........................................................... C
£250,001-£500,000...................................... F 21-50 ........................................................... D
Over £500,000 ............................................. G 51-100 ......................................................... E
Don’t know ................................................... H More than 100 ............................................. F
Not sure ....................................................... G
25 Which of the following sources contributed
towards the overall finance during the first year:
28 Investment needed by the typical new franchisee -
Founder’s own funds.................................... A how much is needed:
Founder’s family/friends............................... B a) For the initial ‘front-end’ fee
Business partners’ funds ............................. C Up to £5,000 ................................................ A
Personal equity investors, not previously D £5,001-£10,000 ........................................... B
known (none of above) - ‘Business Angels’ £10,001-£15,000 ......................................... C
Corporate equity investors - including E £15,001-£20,000 ......................................... D
Venture Capital Funds
Loan Guarantee Scheme............................. F
£20,001-£50,000 ......................................... E
Clearing bank
£50,001-£100,000 ....................................... F
- Barclays..................................................... G Over £100,000............................................. G
- Lloyds ........................................................ H b) For the remainder - namely, for capital items and
- Midland ...................................................... I for working capital
- National Westminster................................. J Up to £5,000 ................................................ A
- Royal Bank of Scotland ............................. K £5,001-£10,000 ........................................... B
- Other clearing bank (please state) L £10,001-£20,000 ......................................... C
___________________________________
£20,001-£50,000 ......................................... D
£50,001-£100,000 ....................................... E
Other sources (please state) M £100,001-£200,000 ..................................... F
£200,001-£500,000 ..................................... G
___________________________________ Over £500,000............................................. H

26 If you used a clearing bank to help finance the 29 Management service fees (‘royalties’) paid by
start-up, did you change from your existing bank: franchisees:
No - kept to the same bank.......................... A a) Are they based on
Yes - moved to a new bank ......................... B Percentage of turnover ................................ A
Percentage of profit ..................................... B

b) Are they paid


Monthly........................................................ A
Quarterly...................................................... B
Annually....................................................... C

5 Please continue overleaf ...


30 Do franchisees pay fees towards advertising: 33 Field support - how many field support staff does
your franchise currently provide for franchisees:
Yes............................................................... A 1-5 field support staff................................... A
No ................................................................ B 6-10 ............................................................. B
11-20 ........................................................... C
21-50 ........................................................... D
31 Which 3 of the following methods do you find best
More than 50 ............................................... E
for generating leads to prospective franchisees -
please rank 1 (= most cost-effective), 2 & 3:
Current Employees ......................................
34
_____ A
Please identify the areas of support offered to
Customers.................................................... _____ B
franchisees: ( against all which apply)
Direct Mail.................................................... _____ C
a) Main areas
Employment/Business Transfer Agencies _____ D

Exhibitions ................................................... _____ E


Franchise manager...................................... A
Extended Family .......................................... _____ F
Operating manual........................................ B
Franchise Magazines................................... _____ G
Technical assistance................................... C
Franchisees ................................................. _____ H
Advertising................................................... D
Local Advertising ......................................... _____ I
Training programme .................................... E
National Advertising..................................... _____ J Site selection ............................................... F
Re-settlement Courses ................................ _____ K Premises development................................ G
Seminars...................................................... _____ L Pre-opening and opening support ............... H
Trade Press ................................................. _____ M Research and development......................... I
Word of Mouth ............................................. _____ N Supply of consumables ............................... J
Other (please state) _____ P Personal contact:
- Regular...................................................... K
___________________________________
- On request................................................. L

32 Targeting prospective franchisees - which 3 of b) Is any personal contact generally


the following groups do you particularly target - - By telephone ............................................. A
please rank 1 (= best type of prospect), 2 & 3: - By on-site visits ......................................... B
Men .............................................................. _____ A
- By visits to your offices.............................. C
Women......................................................... _____ B
- Other (please state) D
Minorities...................................................... _____ C

People with redundancy packages .............. _____ D ____________________________________


Older people with ‘golden handshakes’ ....... _____ E

People with management experience.......... _____ F

People with experience in the field of your _____ G 35 Joint franchise advisory council:
franchise
People with education to: a) Do you have a franchise advisory council
- ‘O’ level GCE/GCSE.................................. _____ H Yes .............................................................. A
- ‘A’ level GCE ............................................. _____ I No ................................................................ B
- Between ‘A’ level and degree level............ _____ J

- Degree level/equivalent or above .............. _____ K b) If ‘No’ - do you intend to establish one
Armed Forces personnel.............................. _____ L Yes .............................................................. A
Other (please state) _____ M No ................................................................ B
___________________________________
c) If ‘yes’ to b) - how many franchise units would
you need before you established such a council
10 units or fewer .......................................... A
11-20 ........................................................... B
21-50 ........................................................... C
51-100 ......................................................... D
101-150 ....................................................... E
151 units or more......................................... F

6 Please continue overleaf ...


36 Business development - please tick ANY of the 38 Are you currently a member of the British
following statements you believe to be true: Franchise Association (BFA):
Expansion via franchising is easier than via A Yes .............................................................. A
company-owned units No ................................................................ B
Expansion via franchising is more cost- B
effective than expansion via company-
owned units If ‘No’, would you please identify the main reason(s)
Expansion via franchising is particularly C
challenging ________________________________________
There is a lack of professional advice on D ________________________________________
franchising in the United Kingdom ________________________________________
________________________________________

37 Franchising in general - please tick ONE of the


outcomes which you believe will be most likely:
Franchising in the U.K. during the next 10 A 39 Finally, thankyou for helping with our research.
years will expand rapidly A number of respondents may be contacted for a
follow-up study - would you please indicate
Franchising in the U.K. during the next 10 B whether or not you would wish to be interviewed:
years will grow steadily
Franchising in the U.K. during the next 10 C
Yes - at the University of Westminster ........ A
years will remain static Yes - at my own offices ............................... B
Franchising in the U.K. during the next 10 D No, sorry ...................................................... C
years will shrink slowly
Franchising in the U.K. during the next 10 E
years will shrink substantially

© University of Westminster, 1995


FRANCH95.DOC 02/10/95 (Re-set 28-Feb-2005)