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A Personal Experience as a Franchisee.

By Peter Speller, former Pirtek Licensee.
History.

1992, a little capital to invest and I was looking for a business to buy. You don't buy much of a business for 50,000 but as a qualified accountant and a good track record as Finance Director in small and medium sized engineering businesses I believed that if I found the right opportunity I could prepare a business plan to interest the Bank Manager.
Agencies, Exchange and Mart and the National newspapers all offered a range of business opportunities. My problem was that I didn't really know what to do. I had no passion for any one sector. The companies I had worked for manufactured engineering products and none of these really fired my imagination.
I had considered buying a franchise but was prejudiced by bad press. The advantages of a Franchise however were very relevant to my circumstances. I had some idea how to run a small company but really needed a ready made product or market.
I scoured the franchising magazines and visited a couple of Franchise trade shows. I made a number of contacts but was not initially encouraged.
However I persevered and then became interested by the growing number of service based ideas and discovered and bought into Pirtek in 1993.

I took the plunge.

Pirtek is a business meeting the need in a wide range of industry for a fast response service for the repair and replacement of hydraulic hoses. The organisation flourishes in Australia and had just been introduced to the UK.
Several things were significant in making the decision.
Firstly the negotiations were completely open. My contact was with the MD but I had unrestricted access to all the other staff.
Also I was given a list of all the other Franchisees and encouraged to contact them.
In hindsight, I think that developing a relationship with and trusting the Franchisor is critical, and that contacting other franchisees is probably the second most important thing to do before making a decision. If contact with other franchisees were withheld I would be suspicious.

The advantage of buying a franchised business is enormous.

Set up effort for marketing and administration can be minimal leaving most time for the crucial activity of selling. In my case the PC came loaded with a complete stock file, prices and an accounting system ready to produce the first invoice. Selling and promotional literature was already designed and available. Operational procedures were tried and tested. I had excellent help recruiting and training staff. Following the system was made easy and gave the best chance of success.

Shop's open.

The first contact with Pirtek was in February 1993 and I opened for business with three trained staff in fully operational premises on 21 June less than four months later. The plan showed losses for the first twelve months of trading as the business grew. Sales were very much in line with forecasts but careful management of outgoings meant that losses were restricted to the first eight months and we never looked back. Five years on I had taken over a neighbouring area, had 16 employees and a turnover of 1million.

Support is crucial.

Throughout the Franchisor has been supportive. For example, in the early days I fell and broke my wrist at a time when one of my staff was on holiday. On the same day the Franchisor sent one of their employees from London to Ipswich to help out for a week free of charge!.
So with a Franchise one is not alone. However there are other things to consider. To succeed the Franchisee will need to work hard at his part of the business. The Franchise Agreement will describe obligations for both parties and whilst day to day relationships are managed without resort to the Agreement, if the Franchisee fails to meet his obligations a good Franchisor will seek redress under the terms of the Agreement. This is often necessary for the good of the whole organisation. So reading and understanding all parts of the Agreement is essential. As is looking carefully at the clauses relating to the transfer of the business as one day for whatever reason you may want to sell.
I have now sold both Franchises to my satisfaction and the new Franchisee is in place and doing well.

By Peter Speller, former Pirtek Licensee.

Find a franchise to buy!

 



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last modified: March 7, 2002