well done mate, a lesson to us all. I have read most of your posts, and thought many times "why the hell didn't I think of that".
I could have done it too, if I had kept the momentum going. I had a full time round after just 3 months canvassing, then took my foot off the pedal, in consequence I at 67 still have to graft on.
I sold good compact work with bags of potential for the first wipe, too late to do anything about that now.
Any youngters reading this please take note, this guy being switched on, took care of his pension through doing his homework, and studying the franchising market.
I wish you a long and happy retirement Ian, I really believe you showed us all, the way to not only make a good living from the game, but to provide for our future too.
I hope you don't mind me posting the following. Dai
Franchising as an Alternative to Employing for the Smaller Operator.
Or: How to avoid the nightmare called “having employees”
Setting the record straight
Everything I’m about to tell you is based only on my own experience. Anyone who may be considering embarking on the Franchising route should take proper professional advice – if it goes pear-shaped it’ll be no good saying “Ian Lancaster told me to do this” I’ll deny everything!!!
My Early Years
Drifted into window cleaning by accident after a few years arguing with a succession of bosses (and getting the sack!) Started working with a friend who did London schools for a firm called A.F. Cheese & Co Ltd.
Life changing moment!! No “‘elf n safety” – no WAHD! - No ladders!!! All done by climbing out and standing on window sills, and I loved it.
Soon started to resent being paid a pittance while the firm took the cream, so started up on my own.
20 years on – getting ambitious!
Expanded my round, bought a couple of (old) vans and took on employees.
Exciting times! Wonderful being a boss! Living in a rosy glow of success. All going brilliantly, for a couple of months or so.
The Rot Sets In…..
Employees quit - go rogue - wreck vans - etc
More hassle: Income Tax&NI – Holiday pay – Liability ins – Employers contributions – employees going sick for the silliest reasons
Vat threshold looms
Spare time – I had some of that, once.
Don’t Enjoy This Anymore
Window cleaning used to be fun, hassle free and simple.
Keep this up and I’m going to get ulcers, high blood pressure and worse…
SO………I sell up!!.........
I split the business into three. Three ready made businesses, each turning over £500 per week – according to the opinions on the forums they should be worth about £4,000 each – twice the monthly take. I sold for £30,000 - £10,000 each, and all the buyers considered they’d got a bargain, so never sell yourself short.
…….And Buy a Franchise!!!
£15,000 plus a van on lease. We all live and learn!!! I hated it from day one, but I’d put my money into it so I had to give it a go. Mostly I hated that the Franchisor didn’t give a hoot about the Franchisees, as long as he was getting his royalties every month.
Lesson number one: If you want to be successful in franchising, look after your franchisees!!
I stuck with it – three years!! But I learned a lot along the way.
Back to Window Cleaning (again!)
It’s like living at the end of an elastic band – you keep trying to get away, and…..boyiiinnggg… you’re back again. I tried to sell the franchise, but nobody wanted to buy, so I cut my losses and walked away.
By now I was 57. A bit long in the tooth for starting again? Don’t you believe it!!! Out I went and started up window cleaning business number umpteen.
Still hanker after expanding
How to do it? Don’t want to employ again
I meet Mike Needham
Bingo!!
Mike runs his business as a Franchise
I’ve been running a franchise for 3 years
eventually the penny drops!
Knowing my Limitations
I want a simple, local business
Easy to run
No hassle
Regular income for minimum effort
And definitely NO EMPLOYEES
The decision is made
I’m going to start a Franchise
So what is a Franchise?
An arrangement where the Franchisor (ME) grants the Franchisee a licence to trade using my business name and business model.
In return the Franchisee pays an initial fee, and then an ongoing percentage of his/her turnover – the “Royalty”
So what is a Franchisee?
A self employed business man
Own business name
Own business bank account
Own business address/phone number etc
Operating under licence, using the Franchisor’s name and business format (and possibly the Franchisor’s work)
And PAYING (royalties) for the privilege!!
Some of the Franchisors Obligations
Ongoing help and advice
Supply of work (possibly)
Training and support
Administration services
Accountancy services (possibly)
Some of the Franchisee’s Obligations
To complete the workload
Maintain the Franchisors good name
Maintain quality of work
Keep self/van/equipment clean tidy and in good working order
Pay the Royalty in full and on time!!
Pro’s and Con’s of Franchising -1
Employer:
Must have:
Employees!! Vehicles - Equipment - Insurance - Employers Liability Insurance
Must pay
Wages - employers & national insurance - maintenance costs - Holiday pay - Sickness pay - Damage costs etc etc
Franchisor;
Doesn’t!!
Pro’s and Con’s -2
Employer:
Must account for employees income tax/NI and pay to Revenue and Customs – and pay for any mistakes!!
Franchisor:
Doesn’t!!
Pro’s and Con’s -3
Employer:
Collects all moneys generated by employees, then pays agreed portion in wages
Franchisor:
Collects agreed percentage of franchisee’s turnover from franchisee.
(Probably less than the employer would take, but a small price to pay – anyway if more income required – appoint more franchisees!!)
Advantages of employing over franchising
Not many!!
?
Nope! Can’t think of one!!
Actually there is one: an employee should generate more revenue for the company, but at a much higher cost in terms of stress and hassle to the employer.
Other Advantages
of Franchising over employing
No outlay for: Uniform/Equipment/Vehicle. Insurance/Holiday/Sickness/Accidents/Damage.
No liability under any of today’s employment laws
No employment tribunals
VAT: The franchisor has only to account for the income he receives from the franchisees (royalties) and any work he does on his own account.
Individually the franchisees do not incur VAT liability until they personally exceed the VAT limit.
How did I do it?
First, I wrote my Franchise Agreement. Read Jim Penmans book (Jim’s Mowing) – especially the bit where he says he wasted thousands of dollars on Franchise Lawyers.
Spent months thinking about everything I would want if I was going to buy a franchise, and made it part of my Agreement.
Preparing for Franchisee No. 1
I had work coming out of my ears – seven weeks to complete a four week round!! All I needed was a franchisee to take on the excess.
Finding the first one was (a) difficult, (b) expensive and (c) nerve wracking. I spent about £800 on advertising but in the 3rd week of a 3 week series, I got a positive response.
Planning is Everything
(Otherwise known as “making it up as you go along”)
My prospective franchisee read the Agreement. There were many points he didn’t like, so we thrashed out compromises. Especially tricky was: “what happens if you die?”
The Franchise Agreement
Legal and binding. Lays out exactly what each party’s obligations are to the other.
Should be prepared by a specialist to avoid future disagreements.
Must include things like Royalty fee rates, the franchisees right to renew, both parties rights of termination, etc etc .
The Franchise Manual
This is the “Bible” of the franchise. It should lay down all the rules of the actual running of the business in clear terms that the franchisor and franchisee can understand in order to prevent any dispute.
Fundamentals of Franchising
A franchisee is not an employee
Financial commitment
Franchisee more properly called a “Franchise Owner”
The Franchisor owns the “intellectual property”
The Franchisee only trades under licence from the Franchisor, and this can be revoked
More Information
The British Franchise Association
www.thebfa.org/bookshop.aspBFA Franchisor’s Guide £55.00
How to Franchise Your Business £14.95
Introduction to Franchising £ 9.95
The Franchisor’s Handbook £18.50
This file is copyright to Ian Lancaster
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