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Leading the way: the robust nature of white collar franchises

Leading the way: the robust nature of white collar franchises

White collar and business service-based franchises are in high demand. A relatively recession-proof industry, even during the crisis, the global economy will always require their services.

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Words by Amanda Peters, staff writer at Global Franchise and What Franchise

What do accountancy, recruitment, legal and business consulting and training, design, estate agency and marketing franchise systems have in common? Apart from the fact that they are mostly services required by any business, they also count as white collar or management franchises.

The term ‘white collar’ was traditionally applied to workers who undertook professions in the corporate world, as they often wore white-collared shirts with a tie and jacket. These people were primarily managers and typically held positions of power. Although those working in management don’t necessarily always don a white collar nowadays, the name has stuck around to denote B2B franchising.

There to help

The coronavirus is quite the paradox and unlike any other economic downtown – it appears to have not hit every industry equally. With many losing their jobs and the worst global recession in people’s lifetimes forecasted, managers and middle managers in many organizations are bearing the brunt.

On the other hand, business remains strong for white collar franchises. For instance, founder and CEO of ActionCOACH, Brad Sugars said: “This is a very busy time for us as lots of business owners, who never contemplated having a coach, are now reaching out for help. Some are doing well like us, but some are not, and we are in the business of helping people and there is a lot of help needed right now.”

With many highly experienced professionals reassessing their careers or being made redundant, more are now keen to make the leap into business ownership. However, the high risk of failure has caused many to opt for a route that has the best of both worlds – franchising. And this comes as no surprise, as it has been proven that those with management experience in sales, marketing or finance are adept at spotting growth potential and brands that are on the rise.

“It has been proven that those with management experience in sales, marketing or finance are adept at spotting growth potential and brands that are on the rise”

Karl Sandall, group chief executive of the TaxAssist Direct Group, explains how the financial services expert spotted a gap in the market: “There were a lot of small business clients that wanted to use our services and we felt that a lot of people working in accountancy commercially might want to run their own practice but did not have the skills or the courage to do it. This made the franchising route a no-brainer.”

Having proven that the franchise concept can be successfully replicated in the U.K., the Republic of Ireland and Australia, TaxAssist launched its U.S. operation during the crisis this May.

If the past dictates the future, then this is quite a lucrative sector to be in. For instance, according to a 2019 Statista report, the “Big Four” global accounting and auditing firms – Deloitte, PricewaterhouseCoopers, EY and KPMG – together, in 2018, reported a total revenue of around $148.24bn and over $56bn was generated from the U.S. market.

Spotting a winner

Although choosing a franchise over a start up will cost you more initially, the truth is you are paying for an already proven business model, increasing your chances of success.

Additionally, management franchises tend to be low-cost ventures as these businesses often don’t require many overheads, a premise or even many employees at first. It can be an owner-operator concept operating via a phone, laptop, and car if you desire.

As a vast majority of white collar franchises can be managed from home and there’s not much stock to handle, business owners can focus on growth and client acquisition, something that is especially important for new franchisees. And because of the home-based model, franchisees can also control their business hours to include family and personal time.

Another perk is that because the clientele typically consists of business owners or individuals who move within the same spheres as the franchisee or franchisor, the necessity or appeal of the business concept doesn’t need to be conveyed as strongly. There’s already a demand and mutual understanding of why certain concepts would be beneficial.

When it comes to support from a franchisor, this is especially important in a white collar franchise due to the nature of the services on offer. For instance, apart from rolling out new support measures to help its franchisees during the coronavirus outbreak, TaxAssist UK also had a Coronavirus Hub set up at the onset of the pandemic.

Small business specialists

What business owner wants to be advised by someone with less experience than themselves? Thus, when it comes to business consultancy franchises, it is inevitable that prospective franchisees have senior-level business experience, as credibility or a proven track record, is incredibly important.

However, something to remember when it comes to using your transferable skills in a management franchise is that you must still be willing to follow the franchise model.

While some white collar franchises will accept relevant experience or transferable skills, for some there is no way around a professional qualification. For instance, AIMS Accountants for Business requires prospective franchisees to be qualified members of professional accountancy associations to open a professional practice.

When it comes to white collar franchises, history shows that the industry is fairly recession-proof. And if you are in the business of helping people and have the necessary skills, experience, or qualifications, then a management franchise could be the answer, especially in times like these. As Brad Sugars says: “The only way the economy survives is if all small businesses get through this.”

The global industry by numbers

● Global management consulting industry is worth $160bn, while North America accounts for 47 per cent and Europe is 29 per cent

● Globally, accounting services market reached a value of nearly $574.4bn in 2019

● It is expected to grow at a compound annual growth rate (CAGR) of 6.3 per cent to nearly $734.7bn by 2023 (pre-coronavirus forecast)

*** Stats from The Business Research Company and Source Global Research

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