LLOYDS BANK Plc/IFRC

FRANCHISING IN BRITAIN
Vol.2, No.1
Cloning Success

Trisha Silvester
Professor John Stanworth
David Purdy
Mark Hatcliffe

PUBLISHED BY LLOYDS BANK Plc &

INTERNATIONAL FRANCHISE RESEARCH CENTRE

FRANCHISING IN BRITAIN Series

May 1997

ISSN 1362-1157
 ‘FRANCHISING IN BRITAIN’ SERIES

L
NA
The Lloyds Bank Plc/IFRC Franchising in

FR
O

AN
I
AT
Britain series comprised 3 volumes:

CH
RN

IS
TE

E
IN
Vol.1
RE

E
TR
SE
1 Prospective Franchisees, (Hatcliffe,
AR

N
CE
CH
Mills, Purdy & Stanworth), 1995

2 Franchising in Figures, (Purdy,

Stanworth & Hatcliffe), 1996

THE INTERNATIONAL FRANCHISE 3 Secrets of Success, (Silvester,

RESEARCH CENTRE (IFRC) 1993-2007
University of Westminster, London, UK.
"The International Franchise Research
Centre (IFRC) is committed to
improving the understanding of
franchising. This is achieved by the
publication of impartial research and
by the encouragement of informed
debate."
Franchising operates in a dynamic environ-
ment, with new issues and challenges
emerging, including: globalisation, coping
with competition, disclosure, industry
regulation, managing relations with
franchisee associations, franchisee
recruitment & market saturation.
Stanworth, Purdy & Hatcliffe), 1996
Vol.2
1 Cloning Success, (Silvester,
Stanworth, Purdy & Hatcliffe), 1997
2 Franchising Your Business: Getting
Started, (Stanworth, Purdy &
Hatcliffe), 1998. A more recent version
- I franchised my business, so can you
(2002) - is also available.
3 Franchisee Success: Perceptions &
Barriers, (Nunn, Stanworth, Purdy,
Thomas & Hatcliffe), 1998
Vol.3

Against this backdrop, the IFRC was
established in 1993 by Professor John
Stanworth (Director of the Future of Work
Research Group at the University of
Westminster), supported by Brian Smith (ex-
BFA Chairman, franchisee, franchisor and
author), and Chair of its Steering Group.
FOUNDER MEMBERS
Founder members and sponsors included:
Barclays Bank, the British Franchise
Association (BFA), Dyno-Rod, Franchise
Development Services Ltd., Lloyds Bank
(now Lloyds Banking Group), Mail Boxes
Etc., Midland Bank (now HSBC), Prontaprint,
Rosemary Conley Diet & Fitness Clubs,
Royal Bank of Scotland, The Swinton Group,
and Wragge & Co.
1 Fifth Annual Strategy Seminar:
Breaking Out Of The Home Market,
(Stanworth & Purdy, Eds., papers by
McCosker, Scott, Hoy & Harris), 1998
2 Franchising: The Gender Dimension,
(Nunn, Purdy, Stanworth & Hatcliffe),
1998
Web versions
The above reports are now available online,
in Acrobat format, published January 2011,
via http://www.scribd.com/SME_Research
LIABILITY DISCLAIMER
The information and analysis in each report
is offered in good faith. However, neither the
publishers, the project sponsors, nor the
author/s, accept any liability for losses or
damages which could arise for those who
choose to act upon the information or
analysis contained herein.

International Franchise Research Centre Lloyds Bank Franchising In Britain - Web Versions 2011 p.1
OTHER PUBLICATIONS
The IFRC published extensively, including
journal articles, book chapters, conference
papers and a Special Studies Series (also
available via http://www.scribd.com/
SME_Research):
1 The Blenheim/University of
Westminster Franchise Survey: Spring
1993, 1993
2 Improving Small Business Survival
Rates via Franchising: The Role of the
Banks in Europe, 1993
3 Targeting Potential Franchisees:
Industry Sector Backgrounds and
Declared Areas of Interest, 1994
4 The Impact of Franchising on the
Development Prospects of Small &
Medium-sized Enterprises (SMEs) in
Europe, 1994
5 The Blenheim/University of
Westminster Franchise Survey: A
Comparison of UK and US Data, 1995
6 Developing a Diagnostic
Questionnaire as an Aid to Franchisee
Selection, 1995
7 Franchising as a Source of
Technology-transfer to Developing
Economies, 1995
8 Aspects of Franchisee Recruitment,
1996
9 Business Format Franchising:
Innovation & Creativity or Replication
& Conformity ?, 1996
10 London: A Capital City For Franchisee
Recruitment, 1997
11 The Effectiveness of Franchise
Exhibitions in the United Kingdom,
1997
12 Franchising: Breaking Into European
Union Markets, 1998
13 Succeeding As A Franchisor,
published jointly with Business Link
London Central), 1998
International Franchise Research Centre
14 Direct Selling: Its Location in a
Franchise Typology, 1999
15 Unravelling the Evidence on
Franchise System Survivability, 1999
16 Survey: Professional Services For
Franchising In The U.K., 2001
ACADEMIC LINKS
Close links were fostered with universities in
Rome and Pisa (Italy), Haute Alsace
(France) and Boston, Minneapolis and
Texas (USA), with a view to research
collaboration. Professor Pat Kaufmann of
Atlanta, Georgia, addressed our inaugural
annual strategy seminar, in 1994. Overseas
speakers in subsequent years included
Cheryl Babcock, Director of the Franchising
Institute, University of St. Thomas,
Minneapolis (1995), Professor Rajiv Dant,
University of Boston (1996), Professor
Francine Lafontaine, University of Michigan
(1997), Professor Claude Nègre, University
of Haute Alsace (1997), Colin McCosker,
University of Southern Queensland (1998),
Professor Frank Hoy, University of Texas at
El Paso (1998), Professor Jack Nevin,
University of Wisconsin-Madison (1999),
Professor Tom Wotruba, San Diego State
University (1999), Professor Bruce Walker,
University of Missouri, (2000), and,
Professor Wilke English, University of Mary
Hardin-Baylor (2000).
IFRC members were active supporters of the
International Society of Franchising, and
hosted the ISoF 2005 conference in London.
The IFRC ceased its research activities in
2007, when John Stanworth took retirement.
John Stanworth, Emeritus Professor,
University of Westminster
http://www.westminster.ac.uk/schools/
business
David Purdy, Visiting Fellow,
Kingston University
http://business.kingston.ac.uk/sbrc
January 2011
Lloyds Bank Franchising In Britain - Web Versions 2011 p.2
AUTHORS
Mark Hatcliffe is the national franchise
manager for Lloyds Bank Plc, based at their
UK Retail Banking Headquarters in Bristol.
He is responsible for their strategic
development in franchising.
Trisha Silvester manages/owns Computer
Literacy Ltd., a computer training company
based in London. The original survey was
conducted in support of Trisha’s MBA
qualification in which she investigated the
problems of franchise system development in
the UK.
David Purdy is a researcher supporting the
Future of Work Research Group and its
interest in franchising. He has also
specialised in small business research since
1985, and publications include authorship of
‘Risk Capital for Small Firms’, commissioned
by the Small Business Research Trust. He
has also co-authored studies investigating
Small Business Management Development
and Teleworking.
John Stanworth is the director of the
International Franchise Research Centre
and has been engaged in research into
franchising since the mid-1970s. He also
leads the Future of Work Research Group,
based at the University of Westminster, which
has a record of specialist research in
Teleworking, Small Business Development
and Human Resource Management. Studies
have been undertaken for many clients,
including The Department of Trade &
Industry, The Department for Education and
The Economic & Social Research Council.
Lloyds Bank plc/IFRC Cloning Success (1997)
LLOYDS BANK PLC/IFRC
FRANCHISING IN BRITAIN REPORTS
The Lloyds Bank Plc/IFRC report comprises 3
constituent Issues each year, focusing upon
franchisors, franchisees and franchising more
broadly. This fourth issue focuses upon the
problems and successes of ‘home-
grown’ (indigenous) UK franchise systems,
having established themselves over the past
decade. The analysis derives from a
comprehensive survey conducted late 1995
and early 1996.
INTERNATIONAL FRANCHISE RESEARCH
CENTRE
The International Franchise Research Centre
(IFRC) is committed to improving the
understanding of franchising. This is achieved
by the publication of impartial research and
by the encouragement of informed debate.
Membership is suitable for anyone with an
interest in franchising and further details are
available from the address on the rear cover.
ACKNOWLEDGEMENTS
The International Franchise Research Centre
is particularly pleased to acknowledge the
generous support provided by Lloyds Bank
Plc in sponsoring the research, analysis and
presentation of this report. However, it is
important to note that any opinions expressed
in this publication are not necessarily those of
Lloyds Bank Plc.
Finally, we wish also to acknowledge the
support of the participating firms, without
whom the survey would not have been
possible.
1
EXECUTIVE SUMMARY
This report presents results from a
comprehensive industry survey involving 139
responding UK franchise systems with up to
10 years experience of franchising. It
analyses responses on a range of issues
and also compares the views and
experiences of young and mature systems
(responding firms were grouped into 3 age
bands: 0-2 years [55 respondents], 3-5 years
[52] and, finally, 6-10 years [32]).
Comparisons are also drawn between
franchise systems which had received bank
backing during their start-up phases, and
those which had not.
The main findings were:
■ Educational attainment - Franchisors
from college backgrounds appear to do
particularly well as franchise Chief
Executives.
■ Respondents’ previous experience -
Most franchise companies in Britain are
run by managers whose immediate
previous experience was that of small
business entrepreneur.
■ Pilot staffing - Most franchise systems
employ 0-5 full-time staff equivalent
(f.t.e.) at the pilot stage.
■ Staff levels of more experienced
franchisors - Nearly one-in-four of
franchise systems still employed no more
than 2 staff in their second year of
franchised operations. A further one-in-
four employed 3-5, and a similar
proportion employed 6-10.
■ Current franchisor staff levels - Four-
out-of-five franchise systems currently
employed 1-5 field support staff.
■ Services supplied by franchisors to
franchisees - Older systems appeared to
take training most seriously and were
also more likely to supply consumables to
their franchisees.
2 Lloyds Bank plc/IFRC Cloning Success (1997)
■ Franchise Advisory Councils (FAC) -
Only 14% of our sample had a franchise
advisory council as a platform for meeting
with their franchisees. Of those who did
not currently have such a body, there
was relatively little enthusiasm for
forming one.
■ Is franchising a business ‘easy’ ? -
The more experience respondents have
of franchising, the greater is the likelihood
of them considering franchising to be
'particularly challenging'.
■ The prospects for franchising - 70% of
franchisors thought franchising in Britain
would grow 'steadily' in the future. The
remainder mostly thought it would grow
'rapidly'.
■ BFA membership - Around one-in-three
of respondents were members of the
British Franchise Association. This level
did not vary with age of system.
■ Bank-financed franchise systems -
Franchise systems that were able to
attract bank finance at the start-up stage
differed quite considerably from their
unsuccessful counterparts in a number of
ways. They appeared to take a longer-
term view of their development, were
more likely to join the BFA and use other
external sources of advice, were also
more conservative in their expectations of
franchise industry growth generally and
had a better understanding of what
motivated franchisees.
INTRODUCTION
The focus of this report is, once again,
franchise success. That is, the intention is to
look at the functioning of real-live franchise
systems in order to gain a better
understanding of the world they inhabit, and
to generate insights into what might be
thought of as 'franchise best practice'. Our
research material is drawn from a major
national study of UK franchisors in their first
10 years of operations, and involved 139
companies.
Chief Executives
The research probed the influence of the
Founders and current Chief Executives -
who comprised nearly three-quarters of the
respondents - on company success, and
attempted to examine the relationship
between earlier educational attainment
levels and success in running a franchise.
Our analysis considered these issues
against franchise system survival over time
and also the number of franchise outlets
established.
Figures 1, 2 and 3 indicate a degree of
correlation here. Figure 1 (Q6 vs. Q12a)
suggests that, over time, franchise system
Figure 1 - Questionnaire Respondents:
By System Franchising Experience
73%
25%
27%
Respondent: Founder/Ch. Exec.
Respondent: NOT Founder/Ch. Exec.
ALL
Lloyds Bank plc/IFRC Cloning Success (1997)
founders are increasingly likely to be
replaced by non-founder-managers as Chief
Executives and Figure 2 (Q7) suggests that
surviving firms (in the 6-10 years age range)
are more likely to have college graduates on
their staff than are their younger
counterparts (in their first two years).
Figure 3 (Q7 vs. Q12b) examines franchise
system success in terms of outlets
established rather than simply years of
survival and correlates this with possession
of a college degree. There is a declining
proportion of non-graduate Founders/Chief
Executives as outlet size increases - falling
from 55% in the smallest systems (0-5
franchise outlets), to 44% in those having
over 50 outlets. Even stronger is the trend
towards more highly-qualified support staff in
the larger systems - for such functions as
franchise director, sales director or franchise
manager. Our previous research has shown
that, for the average franchise system, the
break-even point lies in the 21-50 outlets
range and, as our current results show, this
is precisely the point at which graduate-run
franchise systems come into their own.
It might be suggested that the above
observations can be explained by franchise
systems, as they grow, bringing in new
80%
70%
60% Proportion
50% of Sample/
40% Sub-sample
31% 30% (Length of
20% Franchising
Experience)
10%
-
6-10 years
3-5 years
0-2 years
3
 Figure 2 - Respondent Educational Attainment:
By System Franchising Experience

33%
38% 40%
35%
30%
34% Proportion
29% 25%
of Sample/
14% 20% Sub-sample
19% (Length of
15% Franchising
'O' level GCE/GCSE 10% Experience)
'A' level GCE 5%
-
'A' level to degree level
6-10 years
Degree level/equivalent or above 3-5 years
0-2 years
ALL

graduate Chief Executives but, referring linked with franchise growth rates. This may
back to Figure 2, we see that the increase in be more a case of graduate Chief
the numbers of graduate Chief Executives Executives being intrinsically more
over time is less dramatic than the increase successful from the outset in growing larger

Figure 3 - Respondent Educational Attainment:

By System Size (Number of Franchise Outlets)

44%
55% 60%
50% 50%
Proportion
22% 40% of Sample/
30% Sub-sample
25% 11% 22%
(Number of
20% Franchise
22%
18% 10% Outlets)

Non-graduate (Fndr./Ch.Exec. ONLY) 16% -

Graduate (Fndr./Ch.Exec. ONLY) 51 Plus

12% 2%
Non-graduate (Other respondents) 21-50
6-20
Graduate (Other respondents)
0-5
ALL Franchise
outlets

4 Lloyds Bank plc/IFRC Cloning Success (1997)

Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 4 - Respondent Experience Immediately Prior to Establishment of Franchise:

By System Franchising Experience

60%

70%

60%

16% 50%
Proportion
19%
40% of Sample/
Sub-sample
Small business entrepreneur 5% (Length of
10% 30%
Franchising
Working for the (franchise) company ...
Experience)
Manager in a larger company (employed) 5% 20%

Other (please state) 10%

2%
Solicitor/accountant/other professional
1% -
Small business manager (employed)
1%
No response 6-10 years
1% 3-5 years
Manager in the public sector (employed)
0-2 years
ALL
5
 Figure 5 - Number of Full-time Staff Employed During Pilot Phase:
By System Franchising Experience

52% 43%
60%

43% 36% 50%

Proportion
40%
of Sample/
30% Sub-sample
29% (Length of
20%
20% Franchising
Experience)
10%
Whilst piloting: 0-2 FTE staff 13%
-
3-5 FTE staff 15%
6-10 years
6-10 FTE staff
3-5 years
11 or more 0-2 years
ALL

systems than one of the more successful Levels of Pilot Support

systems subsequently appointing graduate
Chief Executives.
Chief Executives’ Previous Careers
Figure 4 (Q10) shows that the majority
(approximately 60%) of franchise system
respondents were small business
entrepreneurs immediately prior to the
establishment of the franchise system, but
this figure dropped slightly over time.
Figure 5 (Q11c) looks at staffing levels of
franchise systems whilst at the pilot stage.
There is a clear indication here that systems
which survived into the 6-10 years age group
were better staffed at the pilot stage than
their counterparts in the 0-2 age group. They
were less likely to have had just 0-2 full-time
staff equivalent (43% against 52%) and more
likely to have had 3-5 staff (36% against
20%).

Around a further 19% had worked for an Those in the 3-5 years age grouping
existing company which subsequently set up appeared to approximate closer to their older
the franchise system. counterparts rather than their younger ones.

The next most common background was

working for a larger company elsewhere. It is
interesting here that this kind of background
was 3 times more common in firms that had
survived to the 6-10 years time-frame than
amongst those starting out in the 0-2 years
age group. The picture here appears to be
that of professional outside managers with
larger company management experience
having better survival potential than their in-
house counterparts.

6 Lloyds Bank plc/IFRC Cloning Success (1997)

 Figure 6 - Number of Staff Employed by End of 1st Year of
Franchise Operation: By System Franchising Experience

44%
38% 34%
34% 45%
40%
31% 35%
22% Proportion
30% of Sample/
25% Sub-sample
20% (Length of
15% 15% Franchising
0-2 Staff employed (after 1st year) 10% Experience)
3-5 5%
11%
-
6-10
9%
11-20 6-10 years
3-5 years
21 or more
0-2 years
ALL

Staff Size After First Year in Franchising year of operations of younger and more
mature systems. For instance, 44% of
Figure 6 (Q13b) shows some appreciable systems in their first 2 years had 0-2 staff (or
differences in system staffing levels in the first full-time equivalents) compared with only 27%

Figure 7 - Number of Staff Employed by End of 2nd Year of

Franchise Operation: By System Franchising Experience

38%

40%
23% 35%
28%
30% Proportion of
14% 25% Eligible Firms/
21% 20% Sub-sample
(Length of
15%
Franchising
0-2 Staff employed (after 2nd year) 15% 10%
Experience)
5%
3-5
-
6-10 11%
11-20 6-10 years
3-5 years
21 or more
0-2 years
ALL

Lloyds Bank plc/IFRC Cloning Success (1997) 7

 Figure 8 - Number of Field Support Staff Provided Currently:
By System Franchising Experience

91%
63%
81% 100%
90%
80%
31% 70% Proportion
60% of Sample/
50% Sub-sample
40%
(Length of
Franchising
14% 5% 30%
1-5 Field support staff Experience)
20%

6-10 10%
2% -
11-20
1% 6-10 years
21-50
1% 3-5 years
More than 50 0-2 years
ALL

and 28% for the 3-5 and 6-10 year-old
systems. Similarly only 22% of systems in the
0-2 years range had 3-5 staff compared with
34-38% for the two more mature categories.
Perhaps it should be pointed out that the
relatively low levels of first year staffing of
systems in the 0-2 years age range in their
first year of operations could not be wholly
explained by their extreme youth.
That is, because of the time lapse between
companies becoming sufficiently visible to be
included in a franchise directory, the directory
being published and then operationalised for
research purposes, it is likely that only a very
small proportion of the responding companies
located in the 0-2 years age category could
actually have been franchising for less than 1
year.
Figure 7 (Q14b) repeats this picture even
more clearly across the 3 age groups looking
at staffing levels in year 2 of operations. It has
to be accepted here that some firms in the 0-
2 years age group would only have been in
their second year and so might have been
still growing. But, nonetheless, the differences
are quite dramatic. Looking at the 0-2 years
group, we see 31% in the 0-2 staff category
compared with only 19% of firms in the 6-10
years age group. If we turn to the healthier
staffing level of 3-5 people (or full-time
equivalent) we find just 14% in the 0-2 years
age group compared with 38% amongst the
6-10 years group. Thereafter, the figures are
rather more similar.
Field Staff Support for Franchisees
Franchisors were asked the strength of their
field staff support for franchisees and the
results were amazingly consistent (Figure 8,
Q33). Around 95% of all systems had
between 1-10 field support staff. However,
the proportions with just 1-5 such staff rose
from 63% amongst the 6-10 years age group
to 91% amongst the 0-2 years age group.
Conversely, looking at systems with 5-10
staff, the figure rose from 5% amongst the
youngest age tranche to 31% amongst the
oldest.
Targeting Franchisees
Franchisors were asked which groups they
targeted in their search for franchisees
(Figure 9, Q32). 'People with management
experience' was the group chosen most
commonly, except by the most experienced
group of franchisors - those with 6-10 years

8 Lloyds Bank plc/IFRC Cloning Success (1997)

 Figure 9 - Strongest Preference For Franchisee Backgrounds:
Lloyds Bank plc/IFRC Cloning Success (1997)

By System Franchising Experience

6%

22%

18% 22% 30%

17%
17% 25%

20% Proportion
10% of Sample/
People with management experience Sub-sample
10% 15%
Men (Length of
People with redundancy packages Franchising
Other (please state) (no ranked data) 10% Experience)

Women
4%
People with experience in the field ... 5%

Armed Forces personnel 1%

-
Older people with 'golden handshakes'
1%
Educated to Degree level/equiv. plus 6-10 years
- 3-5 years
Minorities
0-2 years
9

ALL
 Figure 10 - Types of Personal Contact Offered to Franchisees:
By System Franchising Experience

93% 100%
90%
78% 63% 80%
70% Proportion
60% of Sample/
50% Sub-sample
40% (Length of
51% Franchising
28% 30%
20% Experience)
Personal contact: telephone 10%
-
Personal contact: on-site visits
14% 5%
Personal contact: visits to franchisor 6-10 years
3-5 years
Other (please state)
0-2 years
ALL

experience. 'Men' were identified as the next
most sort-after group, particularly by the more
experienced franchisors. Next came 'People
with redundancy packages', 'Women' and
'People with experience in the field'.
Interestingly, the most experienced group
(those with 6-10 years experience) had by far
the strongest preference for people with
experience in the field of operation.
Services to Franchisees
Figure 10 (Q34b) shows that franchisors
commonly undertook on-site visits to their
franchisees but that franchisee visits to the
franchisor were more common with the older-
established franchisors. Other methods of
personal contact, noted by the longer-
established systems, included:
Respondents were asked to identify the
services they provided to their franchisees
(Figure 11, Q34a). Respondents from the 3
different age groups gave similar responses
in most instances, with one or two exceptions.
The most experienced group (6-10 years)
were the most likely to give 'training' whereas
the youngest group (0-2 years) were the most
likely to offer 'regular personal contact'. The
most substantial difference between the age-
groups appeared to arise in the case of the
'supply of consumables' where only 56% of
the youngest systems offered this services
compared with 81% of the most experienced
group.

● Communiques
● Conference
● Fax
● Four seminars per year
● Monthly newsletter & regional meetings
● Public relations
● Quarterly meetings
● Regular regional & national meetings
● Seminars, conferences, dinners
● Yearly meetings of all franchisees

10 Lloyds Bank plc/IFRC Cloning Success (1997)

 Figure 11 - Areas of Support Offered to Franchisees:
Lloyds Bank plc/IFRC Cloning Success (1997)

By System Franchising Experience

95%
91%
88%

83%

81% Supply of consumables

70% 100%
69%
90%
65%
80%
64%
56%
63% 70%
Proportion
Training programme 60% of Sample/
Operating manual
Sub-sample
Personal contact: Regular 50%
48% (Length of
Technical assistance
40% Franchising
Advertising Experience)
Franchise manager 30%
Research and development
28% 20%
Supply of consumables
10%
Pre-opening and opening support 24%
-
Site selection

Premises development 6-10 years

Personal contact: On request 3-5 years
11

0-2 years
ALL
 Figure 12 - Existence of a Joint Franchise Advisory Council:
By System Franchising Experience

100%
95% 90%
66% 80%
Proportion
86% 70%
60% of Sample/
50% Sub-sample
34% 40% (Length of
30% Franchising
20% Experience)
10%
-

5% 6-10 years
No 14%
3-5 years
Yes - franchise advisory council 0-2 years

ALL

Franchise Advisory Councils advisory councils but that this figure varied
quite dramatically with age of system. For
Figure 12 (Q35a) shows that only a small instance, only 5% of the youngest group had
minority of respondents (14%) had franchise such systems in place compared with 34% of

Figure 13 - Intention to Establish A Joint Franchise Advisory

Council (FAC): By System Franchising Experience

100%
100%
90%
80%
81% Proportion of
87% 70%
60% non-FAC firms/
50% Sub-sample
40% (Length of
30% Franchising
20% Experience)
10%
-
19%
6-10 years
No 13%
3-5 years
Yes - intend to develop a FAC 0-2 years
ALL

12 Lloyds Bank plc/IFRC Cloning Success (1997)

 Figure 14 - Intention to Establish A Joint Franchise Advisory
Council (FAC); 'Yes' Respondents & Expected Outlet Size at FAC
Introduction: By System Franchising Experience

50%
50%
45%
38%
40%
38% 35% Proportion of 'Yes'
30% non-FAC firms/
25% Sub-sample
30% 20% (Length of
15% Franchising
10% Experience)
<=10 Franchise units to develop FAC No 5%
19% -
firms
11-20 6%

21-50 6-10 years

3-5 years
51-100
0-2 years
ALL

older systems. Against that, respondents
were asked, if they currently had no franchise
advisory council currently, whether they
intended to set one up. Very few replied
affirmatively (Figure 13, Q35b) and this
ranged from 19% amongst the smallest group
to 0% amongst the largest.
Figure 14 (Q35c) identified the number of
units at which those intending to set up a
franchise advisory council would anticipate
doing so. 38% said less than 10 units whilst
exactly the same proportion said 11-20 units.
Franchising: Challenging or Not?
Attitudes towards franchising as a mode of
business development were also probed, by
asking respondents to identify which of the
following statements they agreed with:
● “Expansion via franchising is easier than
via company-owned units”
● “Expansion via franchising is more cost-
effective than expansion via company-
owned units”
● “Expansion via franchising is particularly
challenging”
● “There is a lack of professional advice on
franchising in the United Kingdom”
Interestingly, it was the more experienced
franchisors who felt that expansion via
franchising was particularly challenging
(Figure 15, Q36). In fact, only 40% of the
youngest age group considered franchising
'particularly challenging' whereas, amongst
the more experienced and more successful
firms, this figure rose to close on two-thirds.
This certainly points to the fact that the
managers of young franchise systems under-
estimate the challenges associated with
developing a successful franchise system.
Perhaps surprisingly, it was noticeable also
that the older firms also considered
franchising as an easier method of expansion
than conventional means. However, these
observations are not necessarily
contradictory. In all probability, they relate to
different aspects of franchise management
and growth.

Lloyds Bank plc/IFRC Cloning Success (1997) 13

 Figure 15 - Attitudes Towards Franchising and Business Development:
By System Franchising Experience

80%
68% 60% 63% 70%
60% Proportion
50% 50% of Sample/
40%
40% Sub-sample
45% 35% 30% (Length of
Franchising
20%
9% Experience)
Expansion via franchising is more cost-effective ... 25% 10%
24% -
Expansion via franchising is particularly challenging
Expansion via franchising is easier ... 6-10 years
3-5 years
Lack of professional advice on franchising in UK
0-2 years
ALL

BFA Membership (BFA). In total, 32% were members whilst the

remaining 68% were not (Figure 16, Q38).
Respondents were asked if they were Interestingly, however, membership figures
members of the British Franchise Association did not rise with age. It might have been

Figure 16 - Membership of British Franchise Association (BFA):

By System Franchising Experience

70%
60%
68%
50% Proportion
of Sample/
40%
Sub-sample
30% (Length of
Franchising
20%
Experience)
10%
32% -

6-10 years
No
3-5 years

Yes - BFA member 0-2 years

ALL

14 Lloyds Bank plc/IFRC Cloning Success (1997)

 Figure 17 - Expectations for Franchising in the UK:
By System Franchising Experience

70% 80%
70%
60% Proportion
50% of Sample/
22% Sub-sample
40%
(Length of
30%
Franchising
UK Franchising will expand rapidly ... 20%
Experience)
10%
UK Franchising will grow steadily ... 5% -
UK Franchising will remain static ...
1%
UK Franchising will shrink slowly ... 6-10 years
- 3-5 years
UK Franchising will shrink substantially
0-2 years
ALL

expected that older and larger systems would
be more likely to join a trade association such
as the BFA but this was not the case. A
possible explanation for this might be that
younger systems feel inclined to join in order
to learn from contact with more experienced
franchisors and also in order to harness the
respectability resulting from membership as
an aid to franchisee recruitment.
The Future of Franchising
Franchisors were asked for their views on the
likely future growth rate of franchising in
Britain (Figure 17, Q37). Agreement was
uniform across all groups that the most likely
outcome would be a future where franchising
would 'grow steadily'. Around 70% agreed on
this point, though over 20% thought 'rapid
expansion' more likely. It is interesting to see
that the over-optimism which sometimes
leads the managements of young franchise
systems to under-estimate the challenges
associated with franchising does not appear
to separate them out on this issue.

Lloyds Bank plc/IFRC Cloning Success (1997) 15

 Figure 18 - Extent of Franchising Experience:
By Bank/Non-Bank Financed Systems (Start-up)

46%

50%
40% 45%
40%
37% 35%
30% Proportion
31% 25% of Sample/
20% Sub-sample
17% (Bank support)
15%
23% 10%
5%
Franchising for 0-2 years
0%

3-5
Non-Bank

6-10 Bank-financed

ALL

Bank-financed Versus Non-bank-financed funded by banks at the start-up stage and

those which were not. Figures 18, 19 and 20
An analysis was undertaken to look at show some interesting differences here. For
differences between franchise systems instance, Figure 18 (Q12a vs. Q24) shows

Figure 19 - Main Reason For Choosing Franchising:

By Bank/Non-Bank Financed Systems (Start-up)

41%
38%
36% 45%
40%
35%
30% Proportion
19%
25% of Sample/
15% 7% 20% Sub-sample
Expand without a large management o/head 15% (Bank support)
Access to talented ... owner-managers 10%
6% 5%
Obtain access to low cost capital ... 0%
Pooled resources ... for brand promotion 4%
Non-Bank
Other (please state)
Bank-
ALL financed

16 Lloyds Bank plc/IFRC Cloning Success (1997)

that franchise systems able to attract initial early motive.
bank finance were noticeably older with fewer
firms in the 0-2 years age category and Figure 25 (Q21) shows that the systems
substantially more in the 6-10 year age which were able, or chose, to raise bank
group. This would appear to indicate that finance were also most likely to use other
firms able to attract bank finance were better outside sources of help, including the BFA,
survivors. Figures 19 (Q8) and 20 (Q32) both franchise consultants, solicitors and
show franchise systems unable to attract accountants.
bank finance to be highly interested in using
franchisees as a source of managerial talent, Figure 26 (Q37) indicates that systems that
presumably hinting at inherent weaknesses in were unable to attract early-stage bank
this area. funding were considerably more euphoric
about the chances of rapid franchise industry
Figures 21 (Q16a), 22 (Q16b) and 23 (Q16c) expansion in Britain with nearly one-in-three
look at perceived major threats to survival in expecting 'rapid growth'.
the first 2 years of existence, then 3-5 years,
followed by 6-10 years. Again there are Finally, Figure 27 (Q38) shows bank-
marked differences between systems that financed systems to be nearly twice as likely
gained early bank support and those which to have joined the BFA.
did not. The underlying theme running
through these 3 figures is differences in the
importance attached to 'Shortage of Funds'
and 'Difficulties with Franchisee Recruitment'.
Systems most able to attract early bank
funding attached far greater importance to the
former in the early days and to the latter
several years on. This may, at first sight,
appear odd since it was the systems most
able to attract external finance in the early
days which were also most likely to stress
finance as a major challenge. Our
interpretation of this is that they anticipated
the early years as involving heavy front-end
investment, using mostly either their own
money or loan capital. Their counterparts,
who were unsuccessful in raising bank
funding, or who may not have tried to do so,
were most likely to see franchisee recruitment
as their road to franchise system funding. It is
noticeable in Figure 23 that those able to
attract bank funding in the early days, though
by now larger in terms of outlets, were the
most likely to stress franchisee recruitment as
a problem in the 6-10 years period. We
assume here that this reasoning was due to
their motivation to recruit franchisees as a
means to establishing a national network
rather than simply as a means to generating
income.

Figure 24 (Q17a) suggests that the firms

which were most bankable in the early days
were most accurately aware of the main
appeals which franchising holds for
franchisees (as revealed by our previous
research). Specifically, they were more aware
of the importance of 'Independence' as an

Lloyds Bank plc/IFRC Cloning Success (1997) 17

 Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 20 - Strongest Preference For Franchisee Backgrounds:
By Bank/Non-Bank Financed Systems (Start-up)

25%

22%

18%
17%
30%
17%

25%
14%
People with management experience 10% 20%
Men 10% Proportion
5%
People with redundancy packages
15% of Sample/
Other (please state) (no ranked data) Sub-sample
(Bank support)
Women 10%
4%
People with experience in the field ...

Armed Forces personnel 5%

1%
Older people with 'golden handshakes'
1% 0%
Educated to Degree level/equiv. plus
0% Non-Bank
Minorities
Bank-
ALL financed

18
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 21 - Greatest Threats to Survival During First 2 Years:

By Bank/Non-Bank Financed Systems (Start-up)

50%

41%

34%

14%
28% 50%
19%
45%
40%
35%
Shortage of funds (during first 2 years) 10% 30% Proportion
Difficulties with franchisee recruitment 10% 25% of Sample/
Sub-sample
Difficulties in building support network 20% (Bank support)
7%
Other (please state) (no ranked data) 15%
6% 10%
Difficulties with franchisee management
5%
Getting the brandname known 4% 0%
Competition from other franchise systems
2%
Non-Bank
Competition from non-franchised businesses
Bank-financed
ALL
19
 Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 22 - Greatest Threats to Survival During Years 3-5:
By Bank/Non-Bank Financed Systems (Start-up)

33%
31%

26%

20%
35%
10%
30%
15% 13%

25%
Difficulties with franchisee recruitment Proportion of
20%
8% Responses (87)/
Shortage of funds (3-5 years)
15% Sub-sample
Difficulties with franchisee management
6% (Bank support)
Other (please state) (no ranked data) 10%
6%
Competition from non-franchised business 5%
5%
Difficulties in building support network
0%
Competition from other franchise systems 3%
Non-Bank
Getting the brandname known
Bank-financed
ALL

20
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 23 - Greatest Threats to Survival During Years 6-10:

By Bank/Non-Bank Financed Systems (Start-up)

38%
36%

33%

23% 40%
15%
35%

30%
10%
Difficulties with franchisee recruitment 25% Proportion of
10%
Difficulties with franchisee management 20% Responses (40)/
10% Sub-sample
Shortage of funds (6-10 years) 15% (Bank support)
Competition from non-franchised business 8% 10%
Other (please state) (no ranked data)
5%
5%
Competition from other franchise systems
0%
Getting the brandname known 3%
Non-Bank
Difficulties in building support network
Bank-financed
ALL
21
 Lloyds Bank plc/IFRC Cloning Success (1997)
Figure 24 - Main Appeal of Franchising to Franchisees Initially:
By Bank/Non-Bank Financed Systems (Start-up)

49%

31%
20% 60%
26%

50%

Proven business system (Initially) 8% 40%

Independence/chance to be own boss 8% Proportion
On-going support
30% of Sample/
Reduced risk 5% Sub-sample
(Bank support)
A known trade name
1% 20%
Help with funding
1%
Other (please state) 10%
1%
Good income
0%
1%
Few alternatives available
0% Non-Bank
Good long-term investment
Bank-
ALL financed

22
Lloyds Bank plc/IFRC Cloning Success (1997)

Figure 25 - Information Sources Prior to Franchising:

By Bank/Non-Bank Financed Systems (Start-up)

69%
Franchise Consultant
60%
46%
58%
57%

53% 70%

60%
44%
50%

British Franchise Association Proportion

40%
Franchise Consultant of Sample/
30% Sub-sample
Solicitor (Bank support)
Clearing Bank (1 or more) 16% 20%

Accountant 10%
9%
Local Training & Enterprise Council(TEC)
0%
Other agency (please state) 6%
Non-Bank
Chamber of Commerce
Bank-financed
ALL
23
 Figure 26 - Expectations for Franchising in the UK:
By Bank/Non-Bank Financed Systems (Start-up)

78% 31%
16%
61%
70%
80%

70%

60%
22% 50% Proportion
40% of Sample/
Sub-sample
30%
UK Franchising will expand rapidly ... (Bank support)
20%
UK Franchising will grow steadily ... 5%
10%
UK Franchising will remain static ... 0%
1%
UK Franchising will shrink slowly ...
0% Non-Bank
UK Franchising will shrink substantially
Bank-financed
ALL

Figure 27 - Membership of British Franchise Association (BFA):

By Bank/Non-Bank Financed Systems (Start-up)

76%

80%
61% 70%
68% 60%
50% Proportion
40% of Sample/
30% Sub-sample
39% 24%
20% (Bank support)
10%
32% 0%

No
Non-Bank

Yes - BFA member Bank-financed

ALL

24 Lloyds Bank plc/IFRC Cloning Success (1997)

 FRANCHISING GROWTH:
A STUDY OF U.K. BUSINESSES

To be completed by the Founder or the current Chief Executive, if at all possible - CONFIDENTIAL

1 Franchise trading name: 9 In which year was franchising first pursued for
this business (i.e. by spending time and money):
_______________________________________ Year _______________________________

2 Please describe the main product/service in a 10 Immediately prior to the establishment of

few words: this franchise, were you: (just one )
_______________________________________
A small business entrepreneur.................... A
A small business manager (employed) ....... B
3 Name of any holding company: A manager in a larger company (employed) C
A manager in the public sector (employed) D
_______________________________________ Working for the company that finally set up E
the franchise, if it is a subsidiary
A solicitor/accountant or other professional F
4 Name of founder: specialist
Other (please state) G
_______________________________________
____________________________________

5 Current chief executive:

11 Market testing:
_______________________________________
a) Was the business ‘piloted’ (tested as a
functioning outlet) before the recruitment
6 Name of person answering the questionnaire, if of the first franchisee
not the Founder/current Chief Executive: Yes .............................................................. A
_______________________________________ No ................................................................ B
Position/title _____________________________
b) If ‘Yes’ - for how long was the pilot running
PRIOR to the recruitment of the first franchisee

7 What was your highest level of personal

6 months or less .......................................... A
educational attainment: 7-12 months................................................. B
‘O’ level GCE/GCSE .................................... A 13-18 months............................................... C
‘A’ level GCE................................................ B 19-24 months............................................... D
Between ‘A’ level and degree level.............. C 2-3 years...................................................... E
Degree level/equivalent or above ................ D More than 3 years........................................ F

8 What was the MAIN reason for choosing c) If ‘Yes’ to a) - how many full-time staff, on average,
were employed whilst this franchise
franchising as a growth strategy: (just one )
was being piloted (1 part-time = 0.5 full-time)
To obtain access to low cost capital for A
business growth
0-2 full-time staff (or equivalents) ................ A
To use pooled resources of franchisees B 3-5 ............................................................... B
for brand promotion 6-10 ............................................................. C
To obtain access to talented and motivated C 11 or more ................................................... D
owner-managers
To expand without a large management D
overhead
Other (please state) E
___________________________________

1 Please continue overleaf ...

12 CURRENTLY:
a) How long has this business been franchising
0-2 years ...................................................... A
3-5................................................................ B
6-10.............................................................. C
11 years or more.......................................... D
b) How many franchise OUTLETS do you have
0-2 outlets .................................................... A
3-5................................................................ B
6-10.............................................................. C
11-20............................................................ D
21-50............................................................ E
51-100.......................................................... F
101 or more.................................................. G
c) How many FRANCHISEES do you have
0-2 franchisees ............................................ A
3-5................................................................ B
6-10.............................................................. C
11-20............................................................ D
21-50............................................................ E
51-100.......................................................... F
101 or more.................................................. G
d) How many staff do you directly employ
0-2 staff directly employed........................... A
3-5................................................................ B
6-10.............................................................. C
11-20............................................................ D
21-50............................................................ E
51 or more.................................................... F
e) Out of the total number recruited, how many of the
business’s franchisees are still with you
All (100%) .................................................... A
90-99%......................................................... B
80-89%......................................................... C
70-79%......................................................... D
60-69%......................................................... E
50-59%......................................................... F
Fewer than 50%........................................... G
13 After the FIRST year of franchise operations:
a) How many franchisees had you recruited
0-2 franchisees ............................................ A
3-5................................................................ B
6-10.............................................................. C
11-20............................................................ D
21 or more.................................................... E
2 Please continue overleaf ...
b) How many staff did you directly employ
0-2 staff directly employed .......................... A
3-5 ............................................................... B
6-10 ............................................................. C
11-20 ........................................................... D
21 or more ................................................... E
14 After the SECOND year of franchise operations:
a) How many franchisees had you recruited
0-2 franchisees............................................ A
3-5 ............................................................... B
6-10 ............................................................. C
11-20 ........................................................... D
21-50 ........................................................... E
51 or more ................................................... F
b) How many staff did you directly employ
0-2 staff directly employed .......................... A
3-5 ............................................................... B
6-10 ............................................................. C
11-20 ........................................................... D
21 or more ................................................... E
OR Question not applicable - company not G
yet operational for a full 2 years
15 After the FIFTH year of franchise operations:
a) How many franchisees had you recruited
0-2 franchisees............................................ A
3-5 ............................................................... B
6-10 ............................................................. C
11-20 ........................................................... D
21-50 ........................................................... E
51-100 ......................................................... F
101 or more ................................................. G
b) How many staff did you directly employ
0-2 staff directly employed .......................... A
3-5 ............................................................... B
6-10 ............................................................. C
11-20 ........................................................... D
21-50 ........................................................... E
51 or more ................................................... F
OR Question not applicable - company not H
yet operational for a full 5 years
16 Based on your own direct experience, which 3 of 17 What do you think is the MAIN appeal of
the following factors do you see as being the franchising to franchisees:
greatest threat to the survival of a franchise
a) When they first join a franchise system
system - please rank 1 (=greatest threat), 2 & 3:
(just one )
a) During the FIRST 2 YEARS
A known trade name.................................... A
(Rank 1/2/3)
A proven business system .......................... B
Shortage of funds......................................... _____ A
On-going support......................................... C
Difficulties with franchisee recruitment ........ _____ B

Difficulties with franchisee management ..... _____ C

Help with funding......................................... D
Competition from other franchise systems _____ D
Independence/chance to be own boss........ E
Competition from non-franchised _____ E
Reduced risk................................................ F
businesses Good income ............................................... G
Difficulties in building up a franchisee _____ F Good long-term investment ......................... H
support network Few alternatives available ........................... I
Getting the brandname known..................... _____ G
Other (please state) J
Other (please state) _____ H
____________________________________
___________________________________

b) When they are established

b) 3-5 YEARS after beginning franchising (just one )
(Rank 1/2/3) A known trade name.................................... A
Shortage of funds......................................... _____ A
A proven business system .......................... B
Difficulties with franchisee recruitment ........ _____ B
On-going support......................................... C
Difficulties with franchisee management ..... _____ C
Help with funding......................................... D
Competition from other franchise systems _____ D

Competition from non-franchised _____ E

Independence/chance to be own boss........ E
businesses Reduced risk................................................ F
Difficulties in building up a franchisee _____ F Good income ............................................... G
support network Good long-term investment ......................... H
Getting the brandname known..................... _____ G Few alternatives available ........................... I
Not applicable (e.g. no experience) ............. _____ H Other (please state) J
Other (please state) _____ I
____________________________________
___________________________________

c) After several years in the franchise

c) 6-10 YEARS after beginning franchising (just one )
(Rank 1/2/3) A known trade name.................................... A
Shortage of funds......................................... _____ A
A proven business system .......................... B
Difficulties with franchisee recruitment ........ _____ B
On-going support......................................... C
Difficulties with franchisee management ..... _____ C
Help with funding......................................... D
Competition from other franchise systems _____ D
Independence/chance to be own boss........ E
Competition from non-franchised _____ E
businesses Reduced risk................................................ F
Difficulties in building up a franchisee _____ F
Good income ............................................... G
support network Good long-term investment ......................... H
Getting the brandname known..................... _____ G Few alternatives available ........................... I
Not applicable (e.g. no experience) ............. _____ H Other (please state) J
Other (please state) _____ I
____________________________________
___________________________________

3 Please continue overleaf ...

18 Which ONE of these statements do you most 21 When you entered the field of franchising, did you
agree with (just one ): seek information on franchising from:
Running a franchised outlet is very British Franchise Association ...................... A
much like... Local Training & Enterprise Council (TEC) B
Running your own independent small A Chamber of Commerce ............................... C
business
Running your own independent small B
Franchise Consultant .................................. D
business but with a few more strings Accountant................................................... E
attached Solicitor........................................................ F
Half-way between running your own C Bank:
independent small business and running a
managed outlet of a large company
- Barclays..................................................... G
Running a managed outlet of a large D
- Lloyds........................................................ H
company but with fewer strings attached - Midland...................................................... I
Running a managed outlet of a large E - National Westminster ................................ J
company - Royal Bank of Scotland............................. K
- Other bank (please state) L
____________________________________
19 Do you prefer as franchisees:
Other agency (please state) M
a) People with prior experience in the operational
line of the franchise ____________________________________
Yes............................................................... A
N
No ................................................................ B Which was the MOST helpful

____________________________________
b) People with prior experience of self-employment
Yes............................................................... A P
Which was the LEAST helpful
No ................................................................ B
____________________________________

20 Have your ideas on who makes a good franchisee

changed over time:
a) Yes...............................................................
No ................................................................
b) If ‘Yes’, please describe in what way they have
changed
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
22 When entering franchising, did you prepare a
A detailed business plan at the outset:
B Yes .............................................................. A
Not a full plan, but committed ideas to B
paper
No ................................................................ C
23 How much finance overall had been invested
to establish the franchise system (including
any earlier related investments), by the time
the FIRST franchisee had been recruited:
Up to £20,000 .............................................. A
£20,001-£50,000 ......................................... B
£50,001-£100,000 ....................................... C
£100,001-£200,000 ..................................... D
£200,001-£500,000 ..................................... E
Over £500,000............................................. F
Don’t know................................................... G

4 Please continue overleaf ...

24 Of the above overall investment, how much was 27 Break-even size - how many franchise units do
obtained from a clearing bank(s): you need for the management services (royalty)
income to sustain the overhead of an optimum
Up to £10,000 .............................................. A network without the need for further units, i.e. by
£10,001-£25,000.......................................... B ignoring any ‘front-end’ franchisee fee income:
£25,001-£50,000.......................................... C 1-5 units....................................................... A
£50,001-£100,000........................................ D 6-10 ............................................................. B
£100,001-£250,000...................................... E 11-20 ........................................................... C
£250,001-£500,000...................................... F 21-50 ........................................................... D
Over £500,000 ............................................. G 51-100 ......................................................... E
Don’t know ................................................... H More than 100 ............................................. F
Not sure ....................................................... G
25 Which of the following sources contributed
towards the overall finance during the first year:
28 Investment needed by the typical new franchisee -
Founder’s own funds.................................... A how much is needed:
Founder’s family/friends............................... B a) For the initial ‘front-end’ fee
Business partners’ funds ............................. C Up to £5,000 ................................................ A
Personal equity investors, not previously D £5,001-£10,000 ........................................... B
known (none of above) - ‘Business Angels’ £10,001-£15,000 ......................................... C
Corporate equity investors - including E £15,001-£20,000 ......................................... D
Venture Capital Funds
Loan Guarantee Scheme............................. F
£20,001-£50,000 ......................................... E
Clearing bank
£50,001-£100,000 ....................................... F
- Barclays..................................................... G Over £100,000............................................. G
- Lloyds ........................................................ H b) For the remainder - namely, for capital items and
- Midland ...................................................... I for working capital
- National Westminster................................. J Up to £5,000 ................................................ A
- Royal Bank of Scotland ............................. K £5,001-£10,000 ........................................... B
- Other clearing bank (please state) L £10,001-£20,000 ......................................... C
___________________________________
£20,001-£50,000 ......................................... D
£50,001-£100,000 ....................................... E
Other sources (please state) M £100,001-£200,000 ..................................... F
£200,001-£500,000 ..................................... G
___________________________________ Over £500,000............................................. H

26 If you used a clearing bank to help finance the 29 Management service fees (‘royalties’) paid by
start-up, did you change from your existing bank: franchisees:
No - kept to the same bank.......................... A a) Are they based on
Yes - moved to a new bank ......................... B Percentage of turnover ................................ A
Percentage of profit ..................................... B

b) Are they paid

Monthly........................................................ A
Quarterly...................................................... B
Annually....................................................... C

5 Please continue overleaf ...

30 Do franchisees pay fees towards advertising: 33 Field support - how many field support staff does
your franchise currently provide for franchisees:
Yes............................................................... A 1-5 field support staff................................... A
No ................................................................ B 6-10 ............................................................. B
11-20 ........................................................... C
21-50 ........................................................... D
31 Which 3 of the following methods do you find best
More than 50 ............................................... E
for generating leads to prospective franchisees -
please rank 1 (= most cost-effective), 2 & 3:
Current Employees ......................................
34
_____ A
Please identify the areas of support offered to
Customers.................................................... _____ B
franchisees: ( against all which apply)
Direct Mail.................................................... _____ C
a) Main areas
Employment/Business Transfer Agencies _____ D

Exhibitions ................................................... _____ E

Franchise manager...................................... A
Extended Family .......................................... _____ F
Operating manual........................................ B
Franchise Magazines................................... _____ G
Technical assistance................................... C
Franchisees ................................................. _____ H
Advertising................................................... D
Local Advertising ......................................... _____ I
Training programme .................................... E
National Advertising..................................... _____ J Site selection ............................................... F
Re-settlement Courses ................................ _____ K Premises development................................ G
Seminars...................................................... _____ L Pre-opening and opening support ............... H
Trade Press ................................................. _____ M Research and development......................... I
Word of Mouth ............................................. _____ N Supply of consumables ............................... J
Other (please state) _____ P Personal contact:
- Regular...................................................... K
___________________________________
- On request................................................. L

32 Targeting prospective franchisees - which 3 of b) Is any personal contact generally

the following groups do you particularly target - - By telephone ............................................. A
please rank 1 (= best type of prospect), 2 & 3: - By on-site visits ......................................... B
Men .............................................................. _____ A
- By visits to your offices.............................. C
Women......................................................... _____ B
- Other (please state) D
Minorities...................................................... _____ C

People with redundancy packages .............. _____ D ____________________________________

Older people with ‘golden handshakes’ ....... _____ E

People with management experience.......... _____ F

People with experience in the field of your _____ G 35 Joint franchise advisory council:
franchise
People with education to: a) Do you have a franchise advisory council
- ‘O’ level GCE/GCSE.................................. _____ H Yes .............................................................. A
- ‘A’ level GCE ............................................. _____ I No ................................................................ B
- Between ‘A’ level and degree level............ _____ J

- Degree level/equivalent or above .............. _____ K b) If ‘No’ - do you intend to establish one
Armed Forces personnel.............................. _____ L Yes .............................................................. A
Other (please state) _____ M No ................................................................ B
___________________________________
c) If ‘yes’ to b) - how many franchise units would
you need before you established such a council
10 units or fewer .......................................... A
11-20 ........................................................... B
21-50 ........................................................... C
51-100 ......................................................... D
101-150 ....................................................... E
151 units or more......................................... F

6 Please continue overleaf ...

36 Business development - please tick ANY of the
following statements you believe to be true:
Expansion via franchising is easier than via
company-owned units
Expansion via franchising is more cost-
effective than expansion via company-
owned units
Expansion via franchising is particularly
challenging
There is a lack of professional advice on
franchising in the United Kingdom
37 Franchising in general - please tick ONE of the
outcomes which you believe will be most likely:
Franchising in the U.K. during the next 10
years will expand rapidly
Franchising in the U.K. during the next 10
years will grow steadily
Franchising in the U.K. during the next 10
years will remain static
Franchising in the U.K. during the next 10
years will shrink slowly
Franchising in the U.K. during the next 10
years will shrink substantially
38 Are you currently a member of the British
Franchise Association (BFA):
A Yes .............................................................. A
No ................................................................ B
B
If ‘No’, would you please identify the main reason(s)
C
________________________________________
D ________________________________________
________________________________________
________________________________________
A 39 Finally, thankyou for helping with our research.
A number of respondents may be contacted for a
follow-up study - would you please indicate
B whether or not you would wish to be interviewed:
C
Yes - at the University of Westminster ........ A
Yes - at my own offices ............................... B
D No, sorry ...................................................... C
E
© University of Westminster, 1995
FRANCH95.DOC 02/10/95 (Re-set 28-Feb-2005)