What are the Similarities Between Employment and Franchising?

If you're looking to get in to business ownership, franchising is a great way to go about it. Here are some of the similarities between franchising and employment, to help you transition between the two.

Employment and franchising - what are the similarities?

The Similarities Between Franchising and Employment

If you start each new year with the same resolution – new year, new career – but fail to make it stick, maybe it’s time to look for an alternative to employment. There could be many reasons for failing to make changes in your career. Maybe the anxiety of working in unfamiliar surroundings, or maybe the thought of going back to square one gives you a sigh of depression. But if the thought of working for someone else with little to gain for yourself puts you off, maybe it’s time you started working for yourself?

Being your own boss doesn’t necessarily mean starting up a business by yourself. Becoming a business owner by investing in a franchise offers a route to business ownership but with plenty of support behind you. In fact there are many similarities between franchising and employment, let’s take a look at some of these. But first, what is franchising?

What is a franchise?

Franchising is a method of business expansion, where the business owner licenses out the rights to trade as that brand, to a third party. The two primary parties involved with franchising are the franchisor and the franchisee.

The franchisor owns the brand and the intellectual property. They could be an individual or a company. The franchisor grants the rights to the business model and intellectual property, to the franchisee, for them to run in their own area.

The franchisee brings the brand to their own area, running a business and enjoying the benefits that come with business ownership. Beneficially for the franchisee, they get for their investment, full training and support plus everything they need – along with an established brand and business model.

Compared to starting up alone, franchising has its benefits.

  • You get full training and ongoing support
  • You get initial equipment and starting stock if your business requires it
  • You’ll be trading as an established, recognised brand name which has franchisees in other parts of the country. Word of mouth travels fast and having an already established brand name can bring immediate benefits
  • You’ll have access to partners and suppliers of the franchisor, benefiting from increased buying power

How Franchising is Similar to Employment

Business ownership can feel like a jump in the deep end – especially if you’re diving head first with a start up business idea. With franchising, consider it this way – you start off in the shallow end and make your way to the deep end at your own pace. Business ownership gives you plenty of control, to scale the business at your own pace, taking things as they come. Here are some of the similarities between franchising and employment.

Run a Business from Home

Remote working is a common scenario amongst businesses and employees now. Not only thanks to technological advancements, the COVID pandemic forced many businesses across the UK to adapt to a work-from-home lifestyle, which once enforced, many businesses stuck with for an array of reasons. Working from home has been seen to have increased productivity up to 13%, with a 9% increase thanks to employees no longer having to commute and therefore working more minutes per shift.

Franchises can also be run from home. There are contrasting sectors which all share the similarity in that the business can be run from home. Cleaning franchises are a great example. The franchisee spends their working hours at home marketing the business, whilst overseeing the business in broad oversight. Management franchises like cleaning involve the franchisee employing staff who carry out the hands-on work. Running the business from home (or the beach), the franchisee will market the business to boost clients for their cleaners, never doing any cleaning themself. Contrasting sectors like home care operate in a similar manner.

Although working from home sounds like something that would ooze distractions and lack of productivity, many home based franchises are successful. In a 2018 study by the British Franchise Association and NatWest, around 93% of franchisees claim to be profitable, and only 1% closed due to commercial failure. These figures are higher than own-business start-up figures, which are around 79% success rate. 4 in 5 business startups successful has been quoted by many surveys over the years, but franchising leads the way.

There are many types of franchises that can be run from home, and there are many benefits of owning a home based franchise – from low investment to a better work life balance.

Franchising is Built on a Supportive Framework

When you become an employee, you get training. Your employer doesn’t just throw you straight into your role, you get full training in what you need to do. That might be forklift driving, unloading lorries or dispatching trains. But where you’d have to learn the hard way if you were to start up a business alone – teaching yourself everything and likely making many mistakes along the way – franchising comes with training and support.

Although you’ll have to pay for a franchise – called the franchise investment – this not only grants you access to the brand, the business model, marketing (including flyers, a website etc), you get full training and support as well. This might include on the job training with a franchisee in a neighbouring territory, or it might be classroom training with the franchisor. There are great similarities between franchising and employment when it comes to training and support.

Ongoing you’ll be expected to pay a royalty fee and although some negatively see this only as profit for the franchisor, this is far from the truth. Royalty fees are spent on marketing the business and further developing the business model and franchise. Just knowing that there are a team of people behind the scenes ready to help you if you need it, just a phone call away, makes all the difference when choosing between a business start up, or a franchise investment.

Franchising in general is well supported. Everyone supports each other and franchise networks are likened to families. Although franchising isn’t government regulated, associations like the BFA promote ethical franchising. Banks also favour franchising because of its high success rate, often able to assist many entrepreneurs with funding. From franchise exhibitions to discovery days, franchising awards to specialist franchise consultants – franchising is a foundation for success.

A Chance to Do What You Love

Franchising is a chance for you to turn passion into profit. With over 1,000 franchises out there, you can do what you enjoy. It is often quoted that in order to be successful in what you do, you need to enjoy it. Maybe you love working with pets, or enjoy providing a service to your community. There are many franchises which do just that and you don’t need to be in employment to do that. There are at least five types of pet franchises that can be thought of off-hand; dog walking, pet sitting, mobile dog wash, pet ambulance, and dog training. Whether you want to be a pet sitter or a community transport franchisee, there are plenty of opportunities out there to align your interests. You don’t have to be in employment to love what you do.

Franchising has its differences

Franchising isn’t employment and despite the similarities, it is a big step forward for most people with many differences too. The chance to take control favours franchising over employment, plus the flexibility of a better lifestyle. Although franchising involves an initial investment, it shouldn’t be seen as “paid employment”. If you’re willing to make the business work, you can later sell it. The value of the business should be greater than what you initially paid, because of the effort and work you’ve put in. Reselling the franchise to a new owner means you can retire or pursue other entrepreneurial opportunities.

To make the business work, you’ll need to put in plenty of effort. However, many franchises can be run part time, and there are many franchises that are actually intended to be run part time, from home. Vending franchises for example, are an excellent entry point into business ownership. Enabling the franchisee to scale the business at their own pace, there are numerous business models out there which are ideal either as a “business on the side” or something to build up whilst keeping investment minimal.

Franchising is a great way to get into business “for yourself, but not by yourself”. With many cheap or low cost franchise opportunities out there, franchising offers a great entry point into the world of business ownership.

Discover a World of Franchises at Franchise Planet – why not start with one of the below?

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