A BUSINESS FOR LIFE

Let’s be honest, 10 years is a long time to stay in the same job, even if you have a good employer and you love the work. But what about if you own your own business? Sure, you might be your own boss, but there are a lot of additional pressures that come with that. However, if you find the perfect business that suits your abilities and your lifestyle, why would you ever change? And if your perfect business is a franchise, what difference does that make?

One of the highlights of the 30^th Westpac New Zealand Franchise Awards was a celebration of franchisees who have owned their businesses for over 15 years. A selection of almost 70 franchisees took to the stage – and some of them had been in business even before the Awards started in 1995.

They came from all sorts of different industries, too. Paul and Lee Brumby, of window maintenance company Exceed, have owned their North Shore franchise for 25 years. Auckland’s Stephen Howe has been a Green Acres franchisee for 26 years. Six Harrisons Flooring franchisees have been with the company for over 20 years, while five of New Zealand’s oldest-established franchises – Rodney Wayne – have clocked up over 20 years each. Adele Flett holds the record for Rodney Wayne with an incredible 35 years, making her possibly the country’s longest-serving franchisee.

You can see a full list of all 68 of the nominees on our website here, and read more about long-serving franchisees from many franchises in the Insights & Profiles section of the website.

With so many years’ experience, you might wonder why these people need to be part of a franchise anymore? Why don’t they just strike out on their own when their franchise term ends, instead of renewing time after time? The answer is that owning a franchise offers many advantages over starting or buying an independent business – and that those advantages often increase the longer you stay with the franchise. That’s why, if you’re investing in a business, you should think long-term. Over 10 years or so, there will inevitably be ups and downs in the economy, in the market conditions, and in your personal life, but a good franchise will help you make the most of the good times – and support you through the tricky ones.

Let’s have a look at some of the reasons to buy a franchise in the first place – and how the benefits you receive can increase over time.

Why start with a franchise?

There are lots of good reasons for buying a franchise rather than an independent business. These include:

Reduced risk

Starting your own business is risky. You need a good idea, the skills to make it happen, the cash to finance it, and a whole lot of help to get it right. You need to tell your customers you exist and give them a reason to choose you rather than your competitors. Buying a franchise means that someone else has already worked all this out for you, so the risk is much reduced.

Training

When you buy a franchise, a good franchisor will ensure that you are fully trained in every aspect of running your specific business – not only using the equipment but managing people and cashflow, creating your customer database, purchasing, promoting the business, and lots of other things.

Support

As you start to operate your own business, you’ll be given systems to help you monitor your progress, feedback on how you are doing, and ideas for doing even better. At its best, franchising is like having a dedicated mentor and business coach rolled into one.

Buying power

Whatever business you go into, controlling your costs is as important as maximising sales. Being part of a franchise can give you better deals on everything from products and ingredients to equipment – as well as services such as fuel or insurance. Combining your buying power with 50 or 100 other franchisees can make a big difference to your bottom-line profit.

Promotion

Having a known name on your van or above your shop will bring in business from day one. With a professional marketing team handling much of your advertising for you, you can concentrate on serving your customers and building your reputation locally.

All this means that your new business can get up and running faster and with less risk than if you try to go it alone. These five benefits alone should justify the fee you pay to be part of the franchise in the first place – and there are plenty of other advantages that you’ll experience over time.

But why stay once you’ve learned the business?

As the examples at the start of this article show, many franchisees stay in their businesses for a long time, and love what they do and what their business gives them. But it’s not just about sticking with a winning formula – here are some of the reasons why viewing a franchise as a long-term investment pays off.

Increasing confidence

Starting a new business is hard work, whether it’s a franchise or not. In the early days, you’ll find yourself working harder than you ever have in your life. But it gets easier as you get used to the systems, are able to do everyday tasks without thinking about them, train up your staff, and so on. Talk to any lawnmowing or cleaning franchisee and they’ll tell you that the first couple of months are incredibly hard work as they become ‘match fit’, but after that they are able to tackle more work faster. The same applies to any business, even if the challenge is mental rather than physical.

Better time management

As you work more efficiently, you’ll find you have more time to work on the business rather than just in the business. In turn, that will give you more flexibility in choosing when you work to fit in your family and the other things you want to do.

Increasing returns

As sales build and efficiencies increase, your profitability will increase, too. Yes, you can treat yourself now and then – and if you concentrate first on reducing debt by paying down any business loan or reducing the mortgage, you’ll have more money to spend on the things you love. By budgeting wisely, you can build an asset that returns more profit and is worth more when you do eventually sell it.

Ongoing development

When you own your own business, it’s easy to get bogged down in day-to-day operations. This is another area where franchisees have an advantage – in a good franchise, the franchisor team will be constantly looking at market trends, new opportunities, new equipment or software that will keep your business at the cutting edge. If you’ve ever tried to compare something as basic as phone plans, you know how time-consuming and frustrating that can be. You can waste days just trying to talk to someone if you have a question. Having someone doing the research and negotiation for you on lots of different topics can be a huge relief – and being part of a bigger group makes you more of a priority customer.

Staying ahead of the pack

Every new business needs a competitive advantage. As time goes by, you have to find new ways of staying ahead. Because a franchisor needs the whole network to succeed to maintain their own income, it is their job to focus on franchisee profitability and competitiveness. This, aligned with benchmarking (measuring and comparing performance in key areas such as, for example, wastage, power usage, sales per square metre or per employee) helps franchisees stay competitive – and increasingly profitable.

Overcoming store blindness

Run a shop or a café for long enough and you’ll find you become what retailers call ‘store blind’ – you won’t notice deterioration in furniture, signage, uniforms or even habits because they happen so gradually. But with regular visits from the franchisor’s field managers, and chats, meets and conferences to keep the motivation high and the ideas flowing, you’ll find that you can stay sharp and go on treating customers just as well as you did at the start.

Knowing when to change

In every business, growth brings new challenges. When is the right time to buy a new piece of equipment, or employ someone for a particular role? Is it worth taking bigger premises or renewing the lease? They are big decisions, and timing can be critical. Having the support of a franchisor who has seen others go through this stage and has the facts and figures to help you, as well as the input from other franchisees, is a huge advantage. All these things reduce stress and help long-term franchisees make sound decisions.

Compliance made easy

Running a small business has become more difficult in recent years, with increasing employment, health and safety, and other regulations. In addition, legislation in areas such as childcare has become so time-intensive that many small operators are being forced out of business. But with a franchise keeping watch on the compliance side, telling you what you need to do and the systems you need to use, you can continue in a business that you know and love. You’ll still have to comply, but you won’t waste time working out how.

Legal issues are something you need to be aware of from the start, so read the article on Thinking Ahead at www.franchise.co.nz/articles/3676 to learn more. The article also covers the length of franchise terms and what is involved in renewing the term, as our featured franchisees have done.

Part of a team

An independent business is just that – on its own. However, in an established franchise you have not only the support of your franchisor, but also all the other franchisees who have been through the stage you are now at and understand the problems. Some of them are certain to become good friends, and there will be franchise meetings, conferences, funny stories, helpful hints … It all helps to reduce that feeling of isolation and prevent burnout so you can go on enjoying your business and making a success of it.

Opportunity to contribute

Just as others share their experience with you, as you become established so there are opportunities to share what you’ve learned with others. Good franchises often have Franchise Advisory Councils which enable franchisees to represent their peers, suggest ideas and evaluate initiatives. Many franchisees act as trainers and mentors, formally or informally, for newer franchisees. It’s a way to give back, be involved and influence the wider franchise – and it keeps you engaged so you never get bored.

Someone’s always got your back

Remember the Covid lockdowns? A lot of small business owners suffered from uncertainty and isolation. By comparison, franchisees had people to talk to, people who really understood and cared, and who gave whatever help they could. Franchisors were helping franchisees in everything from finance and fees to mental health and family games – read our  online series Helping Franchisees. And we regularly hear how franchises pull together to help one of their number who has suffered floods, or health issues, or bereavement … The lesson is: when you own a franchise, someone’s always got your back.

When the time comes to sell

Finally, no matter whether you remain in your chosen franchise for five years or forty, the time will come when you are ready to sell, retire, pass it over to a new generation or start a new life.

That will be a sad moment. In most cases, though, the business will still have one last gift to give you – the capital gain that comes from selling a successful business operating under the banner of a well-known brand. The combination should make it both easier to sell and command a higher price than an independent outlet.

Read our accounts of other people’s franchise journeys and ask yourself: is buying a franchise a way to build the business you want in the years ahead? If so, find out What Happens Next, how to Get The Right Advice and how buying a franchise can help you achieve your long-term financial and life goals.