Robert Looker, “An evolving entrepreneur”, 23 February 2011
6.47pm on 23 February and I’m already, uncharacteristically, late for what is the third ‘Innovation & Entrepreneurship – Business Success Stories’ lecture to be held at the University this term.
Robert Looker is the guest speaker and is currently a Business Development Manager and Franchise Consultant at Exemplas Limited. He was previously a Law student, a lawyer and then Accreditation Manager for the British Franchise Association. He set out to represent community enterprise (mainstream and social), sustainable communities as well as asset management and alternative business growth, franchising and replication. He shared with us information about franchising growth strategies for businesses in his workshop presentation.
Robert started off by talking about the different business models e.g. Organic Growth, but then he went on to talk in more depth about Franchising. A franchisor allows a third party to legally copy their business in exchange for an up-front payment and ongoing management services fee. For franchising to work, the business system needs to fulfil certain criteria. Firstly, and most simply, the business model in question has to make large enough margins to share between the franchiser and the franchisee. Secondly the knowledge needs to be easily transferable, so therefore easy for the franchisee to adopt a universal standard set by the franchisor which is entrenched by the adoption of a trademark.
Franchises as a whole do hold many benefits and disadvantages, which Robert Looker looked to expand on in his presentation. For me this was very interesting, as my business idea will use as the key model for growth franchising and agents. The benefits of franchising as a whole expand on a proven idea; riding on the intangible assets of branding and trademarks. This can be vastly beneficial if the franchisee can exploit exclusive rights to a territory. The drawbacks are that for the franchisee to take advantage of the brand and trademark rights they may have to pay large fees and follow strict ‘rules and regulations’ set by the franchisor. This may lead to restrictions to how the franchisee can run his or her business. The reduced risk of setting up the business by yourself will lead to reduced profitability and could lead to complications in selling the business if you look to leave the market.
To consider franchising in the future, Robert Looker stressed that there are key areas where we need to focus much attention. Looker specified that franchise recruitment is very important! This is the key link of communication between the franchisee and the franchisor (the partnership) and this effectively sets out the question ‘Would you employ someone you are not particularly comfortable representing your company?’ A defined image and market position is very important and also to investigate whether there is a growth potential within the market i.e. sustainable source of ongoing clients. Finally as a franchisor, you have the responsibility to help the franchisee as much as possible for him to make a profit, as it is in both parties’ interests.
In conclusion, Robert Looker’s lecture was highly beneficial as it lay the foundations of the franchising process which we can apply to our business. Franchising does have its benefits and its drawbacks but organised efficiently it can be a very progressive tool to expand relatively quickly and lead to high profits with a reduction in the amount of risk. On behalf of all the BBE students, I would like to thank Robert Looker for taking the time out to speak to us.
Report by Manjeave Singh Lotay, BSc Business Enterprise student