Franchising for mums. What is a franchise?

●  Could you be a Parent Pager?
●  Being a Parent Pager:  2 levels of involvement
●  Becoming a Parent Pager:  Step-by-Step
●  Parent Pagers: How much will you earn?

●  Franchise for mums - What is a Franchise?
●  Why we are not a franchise - YET

A franchise, according to Wikipedia is the practice of using another person’s business model.

The business model can be anything from running a branch of McDonalds, to organising kids gym classes or sending flowers by post.

An Entrepreneur , (let’s call her Ms Bossy)  has an idea, sets up a business which is successful in a particular geographical area and decides it’s time to expand.

Ms Bossy decides to find like-minded business people to set up their own businesses in other areas. If these people follow exactly the same ideas and principles as the her successful company then they should succeed too.

This is usually referred to as Franchising. Ms Bossy is the Franchisor. Franchisees are the people who take on the task of setting up the ‘clone’ business.

Franchisees are usually self employed and not employees. However, they agree that they will follow the company terms and conditions set down in a contract.

Depending on the type of business, the Franchisee is usually allowed to use the trademark, recipes, materials, products, techniques, publicity material, merchandise and whatever else, as long as it is used as agreed in the contract.

For example, the McDonalds Franchise may grant a Franchisee the right to use the recipe and dressings for  a Big Mac, as long as Big Macs are only sold within McDonalds restaurants and not by the burger van on the A21.

A Kumon Franchise will allow you to use their copyright educational materials within a Kumon classroom, and within your allocated geographical area. Using them to tutor children from your home or from a building not approved by Kumon would be breaching the contract and you could essentially be ’sacked’ and lose your business.

Your profit usually depends on the amount of work you put in, although of course you are limited to the potential of the area you’ve chosen. For example, If you fancy the idea of a franchise selling cloth nappies, you have to decide if there are enough families in your area to make it financially viable before signing any contract. You could be allocated the wealthiest town in Britain, but if most of the residents are over 60, however good a salesperson you are, you won’t be selling many nappies locally unless your contract allows you to sell online, or sell on someone else’s patch and this is very unlikely.

Costs involved

Fair enough, Ms Bossy takes a nice franchise fee for allowing you to replicate her business idea. Initial start-up franchise fees range from £5000  to 100,000 +.

On top of this, Ms Bossy will charge a royalty which you will usually have to pay monthly. This may include materials or related costs, but is usually a percentage of your earnings. The royalty may be as low as 10% or as much as 50% +  This means that whatever you make, Ms Bossy wants a cut. Sometimes Ms Bossy is happy to take a cut of whatever you make - if you have a lazy year that’s up to you. You earn less,  so will Mrs Bossy.

Avoid Ms Bossy like a bargepole if her contract stipulates that she expects you to meet unreasonable financial targets. If you don’t meet her targets Mrs Bossy wants her % anyway. You have been warned!  You will forever feel like the employee, and you are at risk of losing your business if you fail to meet these targets. Usually people want to be self-employed to avoid this sort of pressure and because they don’t want to have to answer to someone else. Doesn’t it defeat the object of working for yourself?

To give you an example, some ‘magazine’ franchises insist that you publish a certain number of magazines a year. What happens if you have a period of 3-months when you don’t have as much time on your hands and can’t sell as much advertising? Ms Bossy still wants the money she thinks you should have made. You may end up forking out of your own pocket to keep hold of the franchise. This is not an example of a ‘cowboy’ franchise - some big names operate like this.

There are no legal guidelines in the UK to regulate franchise.  The British Franchise Association is a self-regulating organisation which sets its own standards for what is considers to be good franchise practice. A company that wants to franchise has to jump through lots of hoops to become a fully accredited member and the process of joining can be costly. Be prepared to pay over the odds for your franchise if it carries this badge. The bfa also issues a disclaimer, stating that membership of their association does not ‘provide any warranty as to the likelihood of achievement of commercial success’

Here is an example of some franchises which are marketed specifically to mums who want to work around their children. Most are not members of the bfa.

ABC Magazine Start-up costs from £N/A
BabyballetStart-up costs from £10,000
Baby PrintsStart-up costs from £4,500
Bright StartersStart-up costs from £2500
The Bristol Babysitting Agency Start-up costs from £800
Debutots Start-up costs from £6320
Families Magazine Start-up costs from £2000
Family Grapevine Magazine Start-up costs from £3000
Fingerprint Jewellery Start-up costs from £14,000
Imps Club Start-up costs from £6500
Jewel Party Start-up costs from £2500
The Keepsake consultancy Start-up costs from £100
Kip McGrath Start-up costs from £3000
Kumon Education Start-up costs from £3000
La Jolie Ronde Start-up costs from £600
MAD Academy Start-up costs from £6000
Magic Moments Photography Start-up costs from £700
Magikats maths and EnglishStart-up costs from N/A
Musical MinisStart-up costs from £6600
Music Bugs Start-up costs from £7000
Music with MummyStart-up costs from £100
Next Generation Coaching Start-up costs from £4000
Parent Pages (that’s us!) Start-up costs: Internet + passion
Precious Imp Start-up costs from £8,500
Puddleducks Swimming Start-up costs from £10,000
Pyjama Drama Start-up costs from £5,000
Raring to go Start-up costs from £5,000
Small Print Start-up costs from £15,000
Talk First Start-up costs from £4,000
Talking Tots Start-up costs from £7,700
Tatty Bumpkin Start-up costs from £12,000
YogabugsStart-up costs from £1,000

See also: