Date with destiny: Take the franchise route to success

The franchise sector is worth €2.4bn, up 15% in the last five years, and growing, John Daly reports.

TIMES of recession have traditionally seen a greater interest in franchising as people look to take their destiny in their own hands,” says David Killeen, chairman of the Irish Franchise Association.

“While there is certainly increased interest in franchising, this time around there is more caution due to a large extent by the difficult times in the economy. There is a great deal of interest in the lower cost franchises at present, a reflection perhaps of people not wanting to risk all of their savings or redundancy payments.”

According to a recent survey, the franchise sector has seen a marked increase in turnover to €2.4bn, up 15% over the last five years. In total, the industry contributes 4,086 operating units in Ireland, providing 42,927 full-time jobs.

“Home or van-based opportunities are popular now, allowing people to get themselves engaged in work life again at a lower cost.”

Mr Killeen was instrumental in launching the Costcutter retail brand in Ireland, and as franchise development manger with Statoil initiated the first business format franchise in the convenience store sector under the Fareplay brand.

“Figures support that 90% of franchises traditionally have been successful over five years compared to a much lower percentage for stand alone start-ups.

“We have not seen the same levels of attrition in franchising as in stand alones, down to the support structures and the fact that operators, while they are in business for themselves, are not by themselves,” he adds.

Franchising, like all sectors, is experiencing challenging times. “It is very much about adding value and increasing footfall for operators.”

Recent years have seen “an explosion of franchise concepts,” says David Killeen. “Home care operations, for instance, were not around 10 years ago. Similarly, the car repair and mobile unit franchises have proven very popular. Commercial and domestic cleaning, and lifestyle offerings around fitness and weight management,” he says. The food concept sector is another where many new options have come on line also, he says.

“Consumer confidence and funding issues are the main issues around franchising at the moment, and my own feeling is the industry is being suppressed by these.

“When these issues sort out, as they will in time, we will see an explosion of franchising in Ireland.”

There is a greater interest in franchising due to a bigger variety of business options on offer and a better informed public, he believes.

“10 years ago when I would give seminars, people would ask the strangest of questions sometimes, whereas now people understand the principles to a much greater extent.”

Many individuals find their way to the sector due to a desire to change their personal circumstances.

“There are people who have perhaps become disaffected by corporate life or have become redundant, and are seeking to put their own destiny in their own hands.”

He also points to recent research showing Irish entrepreneurs are increasingly looking to franchising as a way to grow their business, both domestically and internationally.

“This is a hugely positive aspect of the industry in that you now have proven Irish concepts ready to embark overseas with the confidence and experience to do very well in other territories,” Mr Killeen says.

* Irish Franchising Skillnet have a free training and educational seminar at The Hilton Hotel, Charlemont Place, on Oct 12.