Entrepreneur and trained optometrist Stephen Halpin always intended to run his own business. In his chosen market - the high street optical services sector - a franchise seemed like a good way to get a head start. After considering the options, Stephen bought one of the first Boots Opticians franchises - in Northwich, Cheshire.
What I did
Select the right franchise
"The retail optical services market is highly competitive and starting an outlet in your own name is a risky affair. A franchise made sense, because it reduces some - not all - of the risks, offers a familiar brand name to build on and provides support with marketing and other aspects. There are several franchisors out there and I considered them all. I decided to go for a Boots Opticians franchise.
"Boots' reputation with UK consumers is excellent and brand awareness is almost universal. Also, because I was applying for one of the first Boots Opticians franchises, there was more scope to get involved in developing the operational systems. This was important to me - I found that longer-established franchisors had a less flexible attitude."
Work out the figures
"With the help of an accountant, I put together a detailed business plan. The store I wanted to take on had been trading as a Boots Opticians for several years, so it had financial records to assess. Other factors I considered were the store location, local competitors and current operational practices. Without a clear idea of how much the business could make and how much cash I needed, it would have been impossible to tell if the franchise agreement on offer was worthwhile."
Check the franchise agreement
"The business plan also formed the basis of the presentation I gave to Boots' management. This was a key part of the process of being accepted for the franchise. The presentation and plan also gave me the information I needed to negotiate a contract. Following the presentation we had a number of conversations about the principles of any agreement.
"Once I had been accepted for the franchise, Boots drew up a franchise agreement setting out terms, conditions and fees. I got advice from specialist franchise solicitors before signing. One of my key objectives was to ensure that the agreement benefited both parties - that I made money and so did Boots.
"Starting from this position, I didn't accept the initial agreement and was able to change a few things. I wanted an incentive to grow the business, rather than just keep it ticking over, and Boots recognised that. One very useful point we negotiated was a deferment of payment on the upfront licence fee, which is one of the biggest franchise costs. I paid a portion on signing, the rest a few months later. It meant I had to borrow less in the early days."
What I'd do differently
Get even more professional advice
"I made use of professional advisers and also had help from Boots, who paid for a course covering tax planning, regulatory compliance and so on. Even so, I wish I'd had more advice, especially with regard to employment law and the impact of VAT on the business."
Understand TUPE better
"TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations. It's a piece of legislation that's concerned with the transfer of staff from one employer to another. As I was taking on existing staff with the franchise, a better understanding of TUPE would have been helpful during negotiations."