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Does anyone here run a franchise?

Discussion in 'Franchising' started by Emma, Jul 30, 2008.

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    Ex Franchisee

    Ex Franchisee Applicant

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    due diligente

    Perfectly agree with Captaincloser. It is unfortunate that a lot of franchisors bet on potential franchisees not doing their homework and asking the right question of the right people.

    I've had my experience with the BFA and BIS, where I've enquired about potential regulation of franchising in the UK. Neither are willing to do anything about it and all I had was a feeble excuse for why franchising is not regulated in this country. Whilst BFA claim they try and prevent people from being hurt by fraudulent franchisees, the reality is that it is not widely advertised. In fact, you don't have to be a member of the BFA to start your own franchise, and many do...

    The Government is too weak and the BFA and so-called franchisors use it to their advantage. Of course, franchisors are not going to advertise how prospects could do their own due diligence. Why would it be in their interest? (unless you are an international franchise and really care about your reputation).

    I think that the only way the UK can get any kind of justice for franchisees and to prevent scheme merchants from ripping people off is for horror stories to be published and those "franchisors" named and shamed in the public domain.

    So, come on, former franchisees! Put your stories about your experiences on public forums and name your franchisors and their companies for all to see. This way, those, who are thinking of joining their franchises, will think twice...
     
    speedysi likes this.
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    Ex Franchisee

    Ex Franchisee Applicant

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    Just to set an example, here is an information blog about one of those franchisors and his schemes: ianjohnsonbusinessscams.blogspot.co.uk
     
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    dodi

    dodi Applicant

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    I've run a successful franchise for a number of years and am now selling.

    Anyone who buys a franchise should check what they will be charged if they decide to sell or leave. When I started I was told 'legal fees of about £500'.
    But as time has gone by these fees have soared. It now costs about £8500, which includes an 'application fee' of £2000 (for what!) Plus, because my buyer rang head office and not me, a finders fee too.

    The franchise agreement just says 'you agree to pay the franchisors costs' so they are free to pluck figures out of the air. I told the BFA this once, and suggested that some scale of fees should be in contracts but they were not interested.

    I am going to end up paying about 40% of my selling price in fees to the franchisor. I will get back my investment and have had years of salary but the fees charged do stick in my throat!:eek:
     
    Mark likes this.
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    LBAJ

    LBAJ Applicant

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    I was burnt quite badly with a 'franchise' - though technically not quite a franchise - that I would dearly love to name and shame, unfortunately the vicious reality of the agreement I signed - I cannot say anything negative about my experience for another 2 years (5 year agreement). All I can say is it was a kind of vending machine. Total scam - you buy the machine, the business fails, you cant sell the machine independently as it only works with their products - then the franchisor buys it back off you for half the price, before moving it on to another poor mug.

    Despite this bad experience, I am looking for another franchise. I am looking for anyone with a bad experience of this one before I dive in. Will be much more thorough this time
     
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    AnnieSpammy

    AnnieSpammy Applicant

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    Franchisee Newbie!

    Im just starting out as a franchisee for an online estate agent. I was a negotiator at a small local firm for a few years, I worked hard but wasn't really going anywhere there. I had some savings and borrowed a bit and decided to go for it and try to make something for myself in franchising. So far its hard work but I love being my own boss and I will get into the swing of things. I have a bit of a strategy in place but it would be really helpful to get any franchisee advice or tips please? Thanks
     
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    AnnieSpammy

    AnnieSpammy Applicant

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    Im new to forums so I haven't mastered forum etiquette yet, so I apologise in advance! Im a new franchisee for an online estate agent. Im based in Essex. I have previous experience and I love the job, which helps! The franchise offers training and support and lots of materials I need for the job. So far so good Im finding the info on here very helpful and would be grateful for any advice on successful business plans. Thanks
     
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    Mark

    Mark Moderator Staff Member

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    AnnieSpammy

    AnnieSpammy Applicant

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    Thanks

    Thanks for those Mark :) I am still getting my head around the first one. But its just what I was looking for :)
     
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    speedysi

    speedysi Applicant

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    i would avoid a franchise like the plague as one person has mentioned there is absolutely no regulation on the industry in the uk and the BFA is funded by franchisors and simply supports them all of the time. I have found a great number of people who have lost money and in some cases their families and homes. You have no more chance of suceeding in business by joining a franchise than just being by yourself, statistics proving otherwise are always mentioned by anyone who makes money from franchising such as banks (they make money by lending to franchisees), lawyers (they make money by reading franchise agreements and then charging thousands of pounds when thr franchise fails), franchisors (they make all of their money by selling franchises and then even more money by way of management fees and any other fees that they can get away with, there is no limit on the number of franchises that they sell). The main rule of franchising is to only inveest what you can afford to lose!
     
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    ISS

    ISS Son of Victor Meldrew Premium Member

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    Tell that to the Burger King franchisees or the Kentucky ones or the Maccy D ones.
     
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    AnnieSpammy

    AnnieSpammy Applicant

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    I think as long as you understand the contract, and as long as you work hard and know the market, it can be a success. Some franchises can be a great 'second job'. Depends on the industry and/or payment structure. One of my franchisee associates at the same company owns 3 small unrelated businesses and is enjoying the variety and is making good money.
     
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    speedysi

    speedysi Applicant

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    Whilst i might agree with your point about the very big franchises mentioned by ISS i also still say there are lots of sharks out there in the franchise world who hide behind threats of legal action. If the franchise industry is so good why doesn't every franchisor allow open discussion or maybe promote an independent fully regulated body rather than the franchisor funded BFA. Would anyone from the BFA be prepared to discuss all the complaints against franchisors in an open forum? The big companies mentioned by ISS have a brand name to protect so are more likely to look after their franchisees.
     
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    ISS

    ISS Son of Victor Meldrew Premium Member

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    Speedy I'll happily accept the point you've made there.
     
    speedysi likes this.
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    AnnieSpammy

    AnnieSpammy Applicant

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    I love being my own boss without the hassle of owning a huge business. It is what I make it. So far its been simple and successful.
     
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    RedTapeDoc

    RedTapeDoc Applicant

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    The British Franchise Association has always been a good place to find information.... self-regulatory body for the UK franchise industry. They have a website
     
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    speedysi

    speedysi Applicant

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    just a quick point with reference to the BFA that it is funded by franchisors so it is not independent and carries no legal weight whatsoever. The BFA refuse to discuss anything to do with franchisors hiding behind the old chestnut of legal threats to anyone who dares to question their bias. I think redtapedoc's comment that the BFA is self regulated sums it up. Franchising needs outside independent regulation. I challenge the BFA to take up this challenge but i won't hold my breath!:(
     
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    captaincloser

    captaincloser View from the Crow's nest

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    I could not agree more.

    The BFA sounds and looks so cool with its puffy advertising but is a chocolate fire guard and one of the very worst sorts. It is not the friend or arbiter for franchisees and never has been. I know many franchisees from the very worst business coaching franchise who ran into nothing more than obdurate stonewalling at the hands of the BFA. Lily liveried self interest and a policy of stalling legitimate claims and questions whilst taking memberships from some of the most abysmal franchises available to the working man.

    There has always been a need for an impartial governing body. This one is the worst sort of business organisation and in my opinion is heavily biased and corrupted by its own membership.

    Someone should forward them this thread as it would be good to see them slither and slide in response.:rant:
     
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    MCSFranchise

    MCSFranchise Applicant

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    The whole point of buying a franchise is so you have all the help, advise and assistance you need to get setup and running with a new venture. Franchisors are supposed to have the experience to help you and stop you from making mistakes.


    www.mcsfranchise.co.uk
     
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    captaincloser

    captaincloser View from the Crow's nest

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    Either that or you are buying a job ?

    Increasingly people buy jobs.

    I guarantee that a large majority of franchise buyers are trying to short cut a learning curve and are looking for the 'guarantee' of success a franchise appears to offer.

    Nothing could be further from the truth. Most franchisees should be forced to take again check on the brochures and sales wallop they buy into.
     
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    MCSFranchise

    MCSFranchise Applicant

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    I disagree with you about -

    "I guarantee that a large majority of franchise buyers are trying to short cut a learning curve and are looking for the 'guarantee' of success a franchise appears to offer.

    Nothing could be further from the truth. "

    As it is a known fact that people who buy a franchise have a much greater chance of success than starting a company from scratch, I agree not all franchise companies are the same but there are some good ones out there.


    MCS Franchise - cleaning franchise, business franchise
     

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