In a one-off interview, resident franchising expert Paul Stafford talks to Carl Reader one of the most recognisable figures in the sector about the health of UK franchising today, and where he sees things moving in the coming years.
An accountant by trade, Reader is also a published author, accomplished networker and public speaker. He works with many of the country’s leading brands in franchising.
(1) What’s your role and experience in UK franchising?
I’m Carl Reader, director of Dennis and Turnbull Chartered Accountants (d&t) which currently looks after over 130 franchise networks and 2, 500 franchisees. I’ve written two books: The Startup Coach? and The Franchising Handbook. The second (to be published this summer) is designed to be a guide for any prospective franchisees to help them through the maze that is franchising. I’m also the affiliate forum chair for the British Franchise Association (BFA).
(2) What can a specialist accountant provide for franchise networks that a non-specialist cannot?
It provides an accountant that knows their business. Because we might already look after 99 of the franchisees, we’ve got a pretty good idea of how the 100th will perform. A specialist franchise accountancy firm will already know the network’s expected margins, suppliers and expected performance. It’s more akin to having a trusted friend in business than a random accountancy firm who deals with hundreds or thousands of other businesses.
(3) How far can technology and systems help franchisees without prior experience of running a business, or who don’t fully understand profit and loss, or cash flow?
They can help massively. The software that is available today automates a lot of the administration of a business, so the franchisee doesn’t need to waste time bookkeeping. Reports are easier to read than legacy packages like Sage. Franchise dashboard software allows a franchisor to actively help franchisees a game changer for those that have no experience in business. It empowers franchisors with the tools that they need to make it a win-win arrangement.
(4) What’s your take on the general health and feel of the franchise sector at the moment?
The sector is flying! The reported number of franchisors has reduced slightly more recently, but there is a growth in both franchisee recruitment and the size of franchisees.
A particular trend is the growth of the “super franchise”. These companies own multiple outlets, not just one or two, but significant numbers across a large area, often employing thousands of employees, and really making a difference to local economies. These franchisees would likely be successful in whatever business they turned their hand to. On the flipside, I’d also wager that the proven models that the franchisor provides them, together with a strong brand, is key to the fantastic success that they have.
(5) What’s the broader role of specialist advisors in the sector, how important are they for franchisors and franchisees?
As affiliate forum chair I have the privilege of meeting most of the professional advisers across the UK. Those that are experienced and actively engaged in the franchising community are the ones who help shape franchising for the years ahead.
Whilst franchisors can provide an entrepreneurial drive and prove what can be done, the professional advisers can provide input and advice from their areas of expertise to help entrepreneurs make their systems bigger and better.
(6) What qualities do you think help franchisees stand out as star performers within a network?
Franchising is a funny formula to get right. The ideal franchisee is entrepreneurial enough to go it alone, whilst still happy to follow a proven system and brand. Not many people lie in the middle ground.
Carl Reader is director of Dennis and Turnbull Chartered Accountants (d&t) and author of The Startup Coach and The Franchising Handbook.