Green shoots of Ireland recovery
If the literal meaning of greener grass equalled its figurative definition, Ireland would have arguably the wealthiest economy in the world, but the reality is rather bleaker – or at least, it was. Here Irish Franchise Magazine looks at how franchise owners and investors are benefiting from the long overdue return to health of the National Balance Sheet.
According to The Guardian in 2013, the Irish economy is expected to grow by more than two per cent over the next 12 months.
Five years down the line from a gargantuan bailout that cost Irish taxpayers €70 million, it seems that there is life once again in the previously barren landscape of the Irish economy. In many ways, a franchise presents the perfect surfboard on which an investor could ride the wave of financial optimism.
Ireland and franchising have had a generally harmonious past. Zumo Smoothies, now one of Europe’s largest and most successful smoothie vendors began life – and franchising in Ireland with the articulately-named Cathal Power, who, after travelling extensively, came up with a ground-breaking business concept to sell premium beverages.
sásta, one of Ireland’s great franchising success stories, also has clear international potential. Currently, the revolutionary fitness brand, which was set up by Fiona Egan, has franchised locations across the country and is providing its own unique brand of weight loss to a growing list of people. Franchise opportunities for this business are still available across Ireland, but this is unlikely to be the case for long.
Franchising, it seems, has defied the economic plight of many businesses in Ireland because it relies on collaboration, a proven business model and constant modernisation to work. Therefore, franchise owners are better placed to ask for help, make necessary expenditure cuts and seek out new business than independent business owners. As the Irish economy recovers, franchise brands will undoubtedly prosper for the same reasons.
Banks Favour Franchises:
As banks tighten their belts and lend only to the business ventures with the highest chance of success, franchising is top of the pile from a banking perspective. Bank Managers tend to have good existing relationships with franchisors and so, from their point of view, investing is often an easy decision. In addition, a potential franchise owner benefits from the full support of the franchisor and respective business plan experience. New start-ups have to go through the painstaking rigmarole of meticulous market research, product and concept viability projections and financial planning before they can hope to put together an acceptable business plan. Franchises, conversely, have already accomplished all of the above and have a proven business model to present to the bank as evidence of a sound company concept.
Franchises are More Secure:
The past five years of financial difficulty have affected everyone to one extent or another – many franchise businesses have been able to survive through solidarity, guidance and collaboration where perhaps independent businesses have failed. Franchise owners gain training, the continued support of the franchisor and the wider network and a proven business model – with proven guidelines – to follow to success. When the recession crushed many companies across Ireland and the UK, in many cases a little support at key times could have been their salvation. With franchising, this support comes as standard with each offering.
Cleaning Doctor, a franchise based in Enniskillen, is a prime example of this. One franchise owner, David Taylor, relied on the support of the Cleaning Doctor head office to ensure his business would succeed during difficult times: “The financial crash of 2008 saw my business plummet and I was on the verge of selling up and going back to paid employment (the thought of which filled me with absolutely any negative word you can think of – once you’ve worked for yourself you will understand what I mean!),” says David. “Anyway, once again, thanks to the magnificent support and encouragement of Willie (William Little, Managing Director, Cleaning Doctor) and the team at HQ, I was persuaded to carry on and over the last five years, I’ve built the business back up again to a point where I’m making a very nice income and thoroughly enjoying my work again – and I mean really enjoying it!” – Stories like these are both heart-warming and common in franchising today.
Franchising for a Bright Future
Evidence of the renewed strength of the overall economy is reflected in the return to growth of house prices year-on-year, increased tourism and positive figures from retailers and service providers. Franchises have come through the difficult period and are set to prosper as the flow of money and reciprocal transactions becomes freer.
Franchise owners investing now will benefit from a business operation with a reputable brand operating in an escalating economy – franchisors typically know how to get the most out their business when economies are at their strongest. Marketing, locations, brand awareness and central customer schemes are already in place with a franchise, but with new businesses these take time to cultivate and build up.
According to the Irish Franchise Association, there are more than 315 trading franchises in Ireland, employing over 42,000 people, with an estimated combined turnover of more than €2.5billion – these numbers are only expected to grow over the next decade as people and businesses begin spending again. Franchises, having survived the harsh financial winter, are already geared up to expand as the sun begins to shine once again on the green shoots of the Irish economy.