The challenges faced on franchisee recruitment ‘back in the day’
Now, back in the late 1990s and early 2000s, there were a plethora of media options to promote the Ovenu franchise; at least three national daily newspapers and their Sunday counterparts ran franchise opportunity sections that could reach millions of potential franchisees. Many regional newspapers, such as the London Evening Standard or the Yorkshire Post for example, dedicated some column inches to business opportunities including franchises.
Author: Rik Hellewell, founder and managing director of Ovenu
There were also several magazines dedicated to the franchise sector, some of which were sold on the news stands at outlets such as WHSmith, others were given away at franchise specific exhibitions … more about exhibitions later.
And let’s not forget Dalton’s Weekly, a hybrid newspaper/magazine dedicated to selling all manner of businesses that included a franchise section.
There were also a couple of the new-fangled internet websites that would accept adverts for franchises along with other business opportunities.
What became immediately apparent was the need to have a pretty sizeable pot of money available to place adverts in these media. The quoted rate card prices were astronomical (some still are) and with artwork costs on top, a pretty scary concept for the uninitiated.
We (myself, Jackie Noble and John Taylor, see part one) were fortunate to have a robust business model that, by 1999/2000 had expanded to the point where the pilot territory was running with four vans; mine plus three sub-contractors. We were generating decent profit margins and enough to run a relatively sensible advertising campaign to attract franchisee investors. I also had a wealth of knowledge and experience of dealing with all types of media, editors and door-drop specialists in my previous business roles so I knew which buttons to press to buy sensibly priced media space.
We also had some valuable Intellectual Property in place with our equipment having been granted a Design Registration at the Patents Office and we had the brand name of Ovenu registered as a trademark. In addition, we had our own unique range of caustic-soda free cleaning products that added significant value to the entire business. This was possible by getting to know a few research chemists and manufacturer contacts from my days in the carpet and upholstery cleaning businesses. As the old adage suggests …”It’s not always what you know; rather who you know.”
However, before running any adverts we needed to get really busy setting up ‘the numbers’.
In our minds, the most valuable possession we had was data – information and knowledge that we’d harvested over a few years to prove, categorically, that we had a profitable business model. But more than that, a model that could be duplicated and replicated by others on the assumption that these ‘others’ were going to be happy enough copying what we’d already achieved and not go out to re-invent the wheel.
And, as previously mentioned, we wanted to offer investors an all-inclusive start up proposal without anything extra being tacked on at a later stage. We knew what our direct costs were for the cleaning products, equipment, tools, sign-writing, leaflets, training, corporate clothing etc., to get our new franchisees up and running but what we didn’t know was this:
How much was it going to cost us to gather enquiries from people interested in joining our network?
How much printed collateral were we going to need to send out to prospects?
How much of our time were we going to spend on recruiting?
What value did we put on our time?
What was our overall cost of acquisition going to be?
We had no idea so we set about trying to find out.
Worth remembering we’re talking about the year 1999/2000 when the internet was in its infancy. In fact the first person to get a home broadband connection, Mark Bush of Basildon, Essex, achieved this accolade in the year 2000. To get access to the new technology was a drawn out process and required a significant amount of patience whilst the ancient phone wires, back in the day, tried to do two things at once.
Better then, and notably quicker, was to head to the local library to do the research using the forest of paper resources there. And that’s where we found a few answers – all very informative but widely diverse to the point we decided to take a ‘suck it and see’ approach having taken what we deemed to be a realistic albeit ‘guestimate’ figure. We’d test various media, one at a time, and evaluate what shook out at the other end over the coming months. Hardly scientific but we were comfortable with our decision as it allowed our franchise offering to fall well within the good value for money bracket.
As a quick aside here, we’ve not changed this philosophy over the past 25 plus years. Even as some media has become scarce, some vanished and others become more prevalent, mistakes in this area are still expensive and being under-funded doesn’t even get the show on the road. Anybody reading this as an aspiring franchisor, please take note, bringing a business to market as a franchise is expensive.
Whilst at the library conducting the research above, we’d also drawn up a decent amount of UK territories that we wanted to recruit into – loosely based on the Yellow Pages areas covered at the time. Again, and arguably far from perfect, we had a sensible starting point. And there was much pencil-sharpening when working through the stages of adding support services and people to offer help to our fledgling or floundering franchisees.
We had a tried and tested business model that could be replicated and scaled up. We had an Operations Manual written in plain English based on real life experience and we had a Franchise Agreement drawn up. There was some very smart collateral printed and we’d had a modicum of success in recruiting a couple of pilot franchisees into the network as a result of a few adverts in the Dalton’s Weekly.
Three became one
At this stage of proceedings, Jackie stepped away from the business to concentrate her time on child care and I’ll be equally appreciative of our time working together as I am for the time working on the tools putting together the pilot scheme with John.
So now it’s all down to me.
By now it was clear that I’d be looking to invent the eight-day week if I was going to cope with running the pilot scheme, three additional vans and start to build and support a successful franchise operation. And that was without much, if any, time considerations for my wife and young family.
Fortunately, a valuable lesson I’d learned by being self-employed for a good number of years and having time restraints, was that of out-sourcing. Not a hugely popular way of doing business back in the late 1990s and the early 2000s but it had always served me well so I saw no reason to not carry this thought process into the Ovenu business. I already had outsourced my book-keeping and accountancy to professional accountants and some diary/financial management for my sub-contractors.
I needed a helping hand with recruitment and to make sure that we were on the right track with corporate ID, branding, IP and our offering in general.
After some modest research I decided to retain The Franchise Company (TFC), a consultancy firm based in Darlington. They were, and still are, offering good value and a high degree of experience and knowledge of the franchise sector. I increased the start-up cost to reflect the success fee being paid to TFC on each new franchisee recruited and embarked on a period of healthy growth.
I was encouraged by TFC after a couple of months to join the British Franchise Association (BFA); they figured Ovenu had all of the credentials in place to qualify for Full Membership so, despite the somewhat ludicrous cost of joining, I bit the bullet and Ovenu was accepted a few weeks after applying.
Membership of the BFA allowed Ovenu to use their logo as some form of positive proof to prospective franchisees that Ovenu were the ‘good guys’ in our industry. Membership also gave access to further ‘pay for’ meeting/networking opportunities – membership therefore turned out to be more of a debenture scenario as the only free event to attend was the annual general meeting. And what a farce they turned out to be. More about that nonsense and other BFA related tales later.
It was also suggested by TFC that I might want to display our franchise opportunity at franchise exhibitions. These exhibitions were held three times a year (two in London and the other in Birmingham) and were widely publicised in the national newspapers and the franchise specific magazines around at the time. I decided to decline the idea of exhibiting on various grounds, not least the possibility of seeing a negative return on the investment. I did, however, attend one of these exhibitions, and a few subsequently, as an ‘interested observer’ and it didn’t take long for me to work out that my original financial fears were going to be well-founded.
Taking the costs of the exhibition space, stand build, vetting fee, collateral to hand out to prospects, hotel accommodation, sustenance etc; plus ‘manning’ the stand, this was going to touch a five figure sum. Something that was hugely prohibitive to a fledgling franchisor.
As a brief aside to the findings above, the most bizarre discovery at the franchise exhibition was finding non-franchised business opportunities and suppliers exhibiting at the same event along with advisors offering help and support for individuals to fundamentally compete against the main throng of exhibitors in the franchise sector.
Equally obnoxious was the concept of the franchises having to be ‘vetted’ prior to being permitted to exhibit with a fee being charged for this whilst ‘Odd Job Bob’ with his business opportunity could simply set-up shop without having to meet any basic criteria at all, other than pay the space fee.
So, having kicked the exhibition theory into the proverbial long grass, I was left with two main options to find prospect investors – the printed media and/or the newly created internet ‘digital marketplace’.
And with this particular internet media being a somewhat new-fangled concept, I assumed (see below) that the BFA, being the only franchise specific trade body in the UK and members of the wider European Franchise Federation, would be fully up to speed and would have a section on their website for their fee paying members to display their franchise opportunity.
We all know the adage about ‘assuming’ and yes, it made a complete ass out of me that I’ll fully and shamelessly admit. But what a complete lack of understanding we had by a ‘trade body’. Your membership simply gave you the opportunity to advertise your franchise on a third-party website run from Scotland. And the added ‘kick in the teeth’ was that this involved extra spending, quite a bit extra if my memory serves me well.
On questioning the BFA on this somewhat dubious ‘partnership’ I was told in no uncertain terms that the association was there to promote ethical franchising. There was no retort from me to this reasoning but, as I had jumped through all of the requisite hoops to become a member by proving unequivocally that I had an ethical franchise opportunity, shouldn’t Ovenu qualify inter-alia for inclusion on the BFA website? A firm rebuttal was received back from the then Director General of the BFA. I declined to join the third-party website for a good number of years.
‘Create my own website’
It seemed, therefore, that the only other option to get noticed on the World Wide Web was to have an Ovenu website. I registered ovenu.co.uk and a few associated domains in May of 2000, had a ‘decent’ website built and started to benefit almost immediately with enquiries coming through for the Ovenu service and the franchise opportunity. Let’s face it, why would I look to pay a third-party website many times more than necessary when we were only looking to attract people interested in investing into one specific sector?
Over the years we became extremely good at getting people along to our websites having spent many hours, weeks and months getting to grips with how the search engine ‘fat controllers’ taught their respective engines how to travel, in which direction, at what times and what destinations to arrive at. Critically, and above all else; how to collect passengers along the way and drop them off at the terminus.
One vital lesson learned when getting to grips with this ‘interweb’ malarkey was, and still is, this – you can have the most visually appealing website in the world with lots of bells and whistles but, and it is a massive but, if you can’t get visitors to your website it is all, regrettably, a complete and utter waste of time, effort and money.
And on that basis alone, many website owners refuse hands down to offer irrefutable evidence to back up their own website visitor numbers – make of that what you will.
As you’ll have noted, I didn’t want a bunch of needy or lazy employees working directly for me, neither did I want a tribe of sub-contractors who had limited or no interest in what they were getting paid to do after a point.
Franchising seemed to be a practical form of a halfway house arrangement where franchisees would ‘lease’ a territory so they’d feel a sense of ownership of their own locally-based business yet still be self-employed with the benefits of running their own diaries and having a corporate umbrella to shelter beneath if problems rained down on them. Plus, we’d have an income stream to further build and develop the brand.
I also knew I had the majority of the skill-sets, tenacity and guile to give franchisees a good return on their investment, not just financially but with the building of a locally-based business that included a pretty sensible work/life balance to boot.
What I didn’t plan for, and there was little or no commentary about this at the time, was the lengths some franchisees would go to by way of looking to re-invent the wheel and fail to comply with a simple set of ‘rules’ in the franchise agreement.
I’ll give some classic examples along with my ‘Would I do the same again?’ answer in part three in this series of articles. It’s worth the wait, believe me.
Ovenu is one of the leading UK and international domestic oven cleaning and valeting specialist. All cleaning products used by Ovenu are environmentally friendly, bio-degradable and conform to the latest government REACH regulations. Ovenu’s Carbon Remover is also approved by the Vitreous Enamel Association.
The Ovenu valeting process involves dismantling key components of an oven and placing them into design-registered equipment, which uses non-caustic, non-toxic and biodegradable products to clean the oven parts.