Franchise consultants open first North office

Sep 29 2008 by Karen Dent, The Journal

A CONSULTANCY on franchising has opened its first North East office to cope with the high number of inquiries from companies looking to grow their business that way.

Manchester-based Franchise Development Services (FDS) Northern has set up shop in Sunderland to advise companies considering the franchising route to expand their business.

Franchising – taking an established brand and licensing it to other people to run as a business – contributed £12.4bn to the UK economy last year and the sector grew at a rate of 15%, statistics from the British Franchise Association (BFA) show.

Eddie Mulqueen, who worked in FDS’s Manchester office but has lived on Wearside for 30 years, is heading the consultancy’s North East operation. He said: “We are getting a lot of tentative inquiries in places where industries like the coalfields and shipyards declined and some people then started their own businesses.

“Now, over six, seven, eight years, they have developed their businesses and they are seriously considering franchising them.”

The slowing economy and the threat of large scale redundancies has given the franchising model a further shot in the arm by creating a larger pool of people with a lump sum to invest in a business start-up – as well as a desire to be in charge of their own destinies.

“When people are made redundant, although it will be emotional for some, it is a catalyst for turning around and saying, I have lost my job through no fault of my own, and I want to start a business,” said Mr Mulqueen, a BFA affiliate.

“Obviously franchising for those type of people plays a very important part. They can see other franchisees who have made a success of the system. With those type of things happening in the marketplace, we have seen companies think is it possible to franchise their business and take advantage of the market.”

He is dealing with around eight regional firms looking at franchising options, ranging from food to construction companies.

But he warned: “Franchising is not an option for a business that is failing. The business has to have a solid foundation. It’s not a quick get out clause. It’s got to have some form of history. It’s not possible to franchise a dream – it’s got to be a proven business format.

“But it can be any business with strong management and resources to support the franchisee in the early days.”

FDS’s Manchester office had been dealing with inquiries from the North East but Mr Mulqueen expects calls to swell now he has an 0191 phone number. Currently staffed by Mr Mulqueen and a secretary, he believes the Sunderland office will be operating at the same level as the Manchester base, which employs seven people, within three years.