Despite the credit crunch, could franchising provide a way to grow, or start, a business? Oxfordshire-based Brian Duckett, executive chairman of Howarth Franchising Group, argues that it could be the way forward.

Having been involved in franchising for more than 30 years, as a franchisee, a franchisor and an advisor to growing businesses, I truly believe that any business which can be run as branch network, and which wants to expand, should at least consider franchising as an option.

I also believe that anyone planning to start their own business should first consider becoming a franchisee.

Put simply, business-format franchising is a commercial relationship in which one party allows the other to operate clones of a proven business system in return for initial and ongoing fees.

It involves duplicating a successful business system by teaching others how to operate it. Those being taught make their own financial investment in opening the unit, while those doing the teaching generally own a brand, which they want to grow and protect. So it is in both of their interests to work together and operate profitably.

Even in the current economic climate, all the major clearing banks which have specialist franchise sections are keen to lend money to franchisees.

This is because it has been proven to be many times safer than lending to independent start-up businesses, more than half of which disappear before their fifth birthday. The failure rate for franchisees is less than five per cent a year.

The franchisor can also grow more quickly by using other peoples’ money to open the outlets, then harnessing their energy and motivation to provide better customer service than would often be delivered by an employed manager.

Indeed many big-name retailers, and businesses in other sectors, are starting to convert their managers to franchisees for the same reason.

Time and time again the performance of a branch quickly outstrips its previous record, even with the same staff and the same stock, simply because the manager (now the franchisee) has invested in and owns the outlet and so benefits directly from any increase in sales and reduction in costs.

Having originated in the United States, franchising now operates as a way of doing business in more than 120 countries around the world.

In the UK, there are 34,200 non-dairy franchised outlets, employing 383,000 people and generating an annual turnover of £12.4bn a year, according to the latest NatWest / British Franchise Association Franchising Survey.

The British Franchise Association, which recently moved its headquarters to Kidlington, and on whose board I serve, oversees the operation of its member businesses and continually seeks to raise the standards of franchising in the UK.

One of the ways it does this is by developing and delivering training programmes for both franchisees and franchisors.

The director general of the BFA also sits on the boards of the European Franchise Federation and the World Franchise Council so Oxfordshire truly has the potential to become a global centre of excellence for franchising.

The company where I originally became a franchisee is also based in Oxfordshire. Carpet and upholstery cleaning specialist Safeclean, with a head office at Milton Park in Abingdon, was one of the UK’s first franchisors and now has more than 70 franchisees providing its services around the country.

Paul Fennell, Safeclean franchise manager, said: "We’ve been franchising for many years and have been through tough times like these before.

"In fact, from our point of view, it actually helps our business because people are more likely to get carpets and furniture cleaned rather than buy new versions, so in the last four months we have witnessed an increase in our sales figures as opposed to a decrease."

Difficult times are also historically good for franchisee recruitment as when people lose their jobs, many opt for the opportunity to control their own destiny by operating their own business under an established name and with a proven system.

The final Oxfordshire franchising link is that last year Begbroke-based publishers How To Books, produced the UK’s first textbook for practical franchise management.

Jointly authored by myself and my co-director Paul Monaghan, "How To Turn Your Business into the next Global Brand — Creating and Managing a Franchised Network," provides a guide through the journey from development of the franchised system through to creating an international network of franchisees.

I firmly believe franchising truly does present opportunities for nearly anyone in business, even during the credit crunch.

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