Mixed Messages from State Agencies 

It could be argued that the franchise industry has been a victim of its own success when it comes to securing support. In many cases, once an entrepreneur has identified a suitable opportunity they will simply raise the necessary finance through their bank and get started.

It is estimated that there are as many as 75 homegrown franchise businesses, conceived and developed by Irish entrepreneurs. While some have export potential, they need to be further developed. Up to now there has been limited support available to this type of business from Enterprise Ireland, but franchising is an area that is likely to receive greater attention as part of the new focus on services over the next two years.

Paul Fagan of Action Coach believes mentoring systems and other supports would be hugely beneficial. "There are some great Irish businesses that could be franchised internationally and I can see Enterprise Ireland taking a greater interest in this area. A franchise strategy would be a welcome development and very encouraging and I am not just talking about financial assistance - support with recruitment and marketing is also vital. Likewise, the local enterprise boards need to take a greater interest. There is a lack of understanding of the export potential of indigenous franchises." By contrast Michael McQuillan, whose Northern Ireland-based café franchise The Streat opened its first outlet in the Republic of Ireland in Cork in early 2007 and has since opened an office in Scotland, was keen to praise development agency Invest Northern Ireland for its support. "We hope to continue our growth in Ireland, develop the brand in Scotland and then throughout the rest of the UK.

We have also had interest shown in the brand from further afield - the model is transferable and we will pursue this international development in time. Invest Northern Ireland has been helpful in assisting us in the development of our business in the Republic of Ireland and Scotland, through practical guidance on marketing, personnel and legal issues and some financial support for international market development." When asked whether he felt that Invest Northern Ireland had a good understanding of the particular challenges faced by a franchise business, he admitted that there are no franchise experts/specialists within the agency. However, he added that the company's Invest Northern Ireland account executive has employed a pro-active approach to supporting the Streat in facing the challenges confronting a franchise business as it grows.

"The support we have received is possibly something it would offer to any company looking to expand outside Northern Ireland, but as our relationship has developed, everyone's understanding of how franchising should be supported has been enhanced, which may improve the specification of support packages for future franchise based businesses." McQuillan said he would be delighted to meet with Enterprise Ireland to see if he could do anything to help the organisation formulate its strategy for developing franchises in the Republic. "Franchising as a growth dynamic should get much more support from government and enterprise agencies. It is a unique and powerful business growth tool and can be a controlled, successful method for indigenous business to expand beyond their own borders."

Irish Franchise Association CEO, Michael Bradley believes that while some enterprise boards understand and help to promote business-format franchising through local seminars and mentoring, the majority need more information and a greater understanding of its elements and principles, particularly its better success rate than that of non-franchise start-ups. "Enterprise Ireland should do more to help Irish franchises get into new markets and is considering its approach since a meeting with the Irish Franchise Association earlier this year. The latest survey produced by Franchise Direct shows a very vibrant industry with 26,000 people employed and this has been achieved without any recourse to state intervention." The service sector is growing in importance and will contribute to future wealth, employment growth and international trade for Ireland if it is supported, he added. "Business-format franchising is an attractive method of expansion for existing businesses as the success of O'Briens Sandwich Bars, Bagel Bar, the Streat and others has proved." The Irish Franchise Association does not currently provide mentoring services to start-up franchise companies, but its CEO said the association would consider providing such services once resources permit. "The ‘information' section of our website contains valuable advice for both potential franchisors and franchisees and we hold regular information seminars, details of which can be found in the events section of our website www.irishfranchiseassociation.com."

Bradley believes a new business could derive considerable value from being able to receive advice from an established franchise. "We find an experienced franchisor can be invaluable to existing business owners who are investigating franchising as a means of expansion. Those attending our regular one-day seminars ‘How to Franchise your Business - an Introduction' hear from experienced franchisors, legal and banking experts, manual writers and other franchise consultants. The directors and members of  the Irish Franchise Association also assist budding franchisors through discussions and seminars."

Consistency is something all businesses regularly call for from enterprise development agencies. The problem for fledgling franchises, according to Eamon Curtin, head of Franchise Development Services Ireland (FDSI) is that while some are very supportive of these types of businesses in their area, others are not.

"I have spoken to every enterprise board over the last few years and they are all different and make their own decisions on what is right for their area - and they will all perceive franchise businesses in a different way." However, he also remarked that there is a noticeable increase in interest in the franchising concept over the last 12 months, which has resulted in the establishment of a number of programmes. FDSI Ireland has developed a workshop for potential franchisees to advise them on whether franchising is right for them and vice versa. The workshops also explore the different types of franchise that are available and provide attendees with advice on research and how to approach and deal with franchise companies in the early stages. The programme is being run in conjunction with Limerick County and South Cork Enterprise Boards and will take place in May and June.

The other programme is a one day workshop for existing business owners who are interested in expanding their business and for whom franchising is an option. The ‘Increase the Value of Your Business' course addresses a range of topics including business planning, operations manuals, legals and ongoing monitoring and is being held in association with a number of Cork enterprise boards, including Cork City in May and June. Places are still available for both programmes said Curtin, who reckons that even 12 months ago he would never have been able to get these programmes off the ground.

"In relation to Enterprise Ireland, it is exploring other opportunities for encouraging internationally traded services and is investigating areas such as franchising. Whether it decides to invest resources in this area is yet to become clear, but other countries have been supportive of franchising in terms of becoming international hubs for multinational franchises.

First published in Franchise Options Magazine© to order back issues please call 01 6611660