A dragon speaks

Well, a former dragon anyway – Rachel Elnaugh, late of Dragon’s Den and Red Letter Days, is holding forth on the subject of franchising on her blog.

She makes a number of points that will be familiar to several franchisors. It’s not a proper business, we often hear. It’s a substitute for doing your own thing because you can’t make your own decisions about stuff. On the other hand it’s the sort of business people often opt for when they’ve seen the alternative, of building your own brand from scratch, which is very difficult indeed.

Well, yes, up to a point. But even this can give the impression that it’s the people who aren’t quite good enough that end up running a franchise, if you’re not creative enough to imagine your own business then you’ll end up in the franchise market. I don’t actually accept that (and I should stress it’s not what Elnaugh says, just a conclusion one could reach). But there is a difference.

My instinct is that the franchise option appeals to the person who loves business but who hates the start-up phase. Typically they won’t underestimate their tasks but they’ll want to bypass them – they’ll see no particular reason to build a brand of their own, they don’t want to empire-build.

Ultimately they’ll be lifestyle entrepreneurs. They might not have a colossus to sell when they reach retirement but they’ll have been pleased enough to earn a living doing substantially their own thing. They might even (PREPARES FOR ROTTEN EGGS) be nicer people than the ones who ruthlessly build something up from nothing and end up trampling all over the competition.

Oh, and if you ever look into it for yourself and see what the initial outlay is, you’ll find they have a lot of money to start off. Oh boy do they have a lot of money…

Guy Clapperton is a freelance journalist who specialises in small business issues and has written for the likes of The Guardian, the FT and the Daily Mirror. Guy has written about finance and franchising for SmallBizPod. http://www.guyclapperton.co.uk