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How does a travel franchise work?

How does a travel franchise work?

Travel franchises can be an attractive option for individuals who are passionate about travel and want to start their own businesses but don’t want to start from scratch or pay the large upfront associated costs involved in starting a business. 

The most popular travel franchises are those which enable people to become a travel agent from home, booking various travel-related services, such as flights, hotels, and rental cars, organising holidays and tours, and providing travel insurance and visa assistance. 

The franchise model allows the franchisee to use the franchisor’s established brand, products, and services and receive support and guidance in areas such as marketing, operations, and training. 

In return, the travel franchisor tends to get a share of the commission of each holiday booking sold and it typically also gets an initial franchise fee plus monthly fees to pay for things like agent software and head office support.

It is essential to carefully research and evaluate the travel franchise opportunity before signing a contract as you will be locked into monthly fees. Take care to understand the franchisor’s business model, the level of support and training provided, and the ongoing fees and obligations associated with the travel franchise. 

Find out if the franchisor is a member of industry bodies, if current franchisees are making a success of the travel consultancy and ask if there is an opportunity to speak to the founder or even meet in person. Does the travel franchise offer your initial fee back if you sell enough holidays? Can you upgrade your package if you build the business quickly? These are just some of the incentives offered by The Travel Franchise, one of the UK’s fastest growing travel franchises. 

How does franchising work?

The franchising business model

Franchising is a business model in which a company, called the franchisor, grants the right to use its brand, products, and processes to another person or company (the franchisee) for a fee. The franchisee then operates their own business using the franchisor’s intellectual property, marketing, training, and support.

The franchisor typically provides the franchisee with a proven business model, including a recognised brand, marketing and advertising materials, operational support, training programmes, and ongoing assistance. In exchange, the franchisee agrees to pay the franchisor an initial fee and ongoing royalties based on a percentage of their revenue.

Franchising allows individuals needing more resources, experience, or expertise to start a business from scratch, using a successful model with a proven track record. For example, a franchisee might love the travel industry but need help to open their own travel agency. 

While some franchises may require you to have experience in travel, others, such as The Travel Franchise, will train people from different career backgrounds (from former police and nurses to teachers), employing travel experts in head office that can bring them up to speed quickly. 

To summarise, franchising allows individuals to own and operate their own businesses using an established brand and proven business system provided by a franchisor. The franchisee pays an initial fee and ongoing royalties in return for the right to use the franchisor’s intellectual property and support.

The relationship between franchisor and franchisee

In any franchise, the relationship between the franchisor and the franchisee is important. It is a mutually beneficial relationship, with the franchisor supporting the franchisee, and in turn, the franchisee helps to grow the franchise. 

The franchisor owns the business model and brand, and the franchisee acquires the right to operate a business using the franchisor’s business model, expertise and resources.

The franchisor provides the franchisee with training, marketing support, and ongoing assistance, allowing them access to marketing materials and other resources to help them run their business. In return, the franchisee agrees to operate the business according to the franchisor’s established standards and guidelines. 

The franchisor and franchisee must have a close relationship as their success depends on one another. 

What is the role of the franchisor?

A franchisor has many roles and responsibilities. 

  1. The franchisor is responsible for developing and refining the business model to ensure that it is profitable and sustainable for both the franchisor and the franchisee. This includes creating operational systems, marketing strategies, and training programmes.
  1. The franchisor builds and maintains its brand recognition through developing brand identity, marketing and advertising campaigns.
  1. The franchisor provides training and support to ensure the franchisee has the necessary skills and knowledge to operate successfully. This includes initial training, ongoing support, and access to resources such as marketing material and software systems.
  1. The franchisor is responsible for establishing guidelines and standards that the franchisee must follow to ensure compliance with laws and industry regulations. 

The travel franchise plays a critical role in ensuring the success of its franchise network. By providing a tried and tested business model, ongoing support and guidance, and established brand recognition, the travel franchise gives its franchisees the tools they need to operate a successful travel business.

What is the role of the franchisee?

The role of a franchisee is to operate a business under the franchisor’s name and business model. The franchisee is responsible for executing the franchisor’s business plan and adhering to the established guidelines and standards to ensure consistency and quality across the franchise network.

Here are some of the key roles and responsibilities of a franchisee:

  1. The franchisee is responsible for securing the initial funding and having the drive and enthusiasm for establishing and operating the franchise.
  1. The franchisee should follow the franchisor’s guidelines to ensure consistency and quality across the franchise network. This includes adhering to operational procedures and marketing programmes.
  1. The franchisee participates in training and support programmes provided by the franchisor to gain the necessary skills and knowledge to operate the franchise successfully.
  1. The franchisee is responsible for maintaining the franchise’s reputation, ensuring that customers receive high-quality service and resolving any issues that may arise.

What are the advantages of franchising?

There are many advantages of franchising for both the franchisor and the franchisee. 

Advantages for the franchisor:

Expanding a business often involves a lot of financial and time investment. Operating as a franchise allows a franchisor to expand the business without needing significant capital investment. 

The franchisor earns revenue from initial fees and ongoing royalties, which provides a stable and recurring income stream. This initial investment and love for the travel industry mean that franchisees are motivated to succeed by investing time and effort into building their franchise. This benefits the franchisor by improving customer satisfaction and overall performance.

Franchisees who typically invest in a travel franchise tend to love travel, which really helps motivate and build brand reputation. As they are geographically diverse they also cover more areas in the UK than the franchise could without them, enabling it to build its reputation in new markets. That said, most travel franchisees operate from home without a physical high street shop. 

Examples include The Travel Franchise which has, through years of research into best practices, developed a set of standards and guidelines for its franchisees that allows it to maintain consistency and quality. 

Advantages for the franchisee:

Setting up a new business from scratch takes a lot of work and money, and building an established and reliable brand can take even more time and effort. 

There are also a lot of risks associated with new independent start-ups. The Telegraph reports that 20% of new start-ups fail in the first year, while a staggering 60% close before three years. 

Franchisees minimise those risks by operating under an established brand and business model with a proven track record of success.

The Travel Franchise, for example, has a proven business model and well-established operational systems that have been tested and refined over time, meaning your chance of success will be considerably higher. 

Franchisees receive training and ongoing support from the franchisor, providing access to the necessary resources and expertise means they can run their business more efficiently and at a lower cost. 

Franchisors invest in ongoing research and development to improve their business model, operational systems, and marketing strategies, helping franchisees stay up-to-date with industry trends and best practices.

How does a franchise work in the UK

Franchising works similarly in the UK as in other countries, with country-specific laws and regulations. 

What are the regulations for franchising in the UK?

Although the main aspects of owning a franchise in the UK are the same as elsewhere, the UK has specific franchising regulations designed to promote transparency, fairness, and good business practices. These regulations are also essential to help protect both the franchisor and franchisees. 

Here are some of the key UK franchising regulations:

  • The British Franchise Association (BFA) Code of Ethics: The BFA is a self-regulatory body for the UK franchise industry and has developed a Code of Ethics that provides guidelines for ethical and fair franchising practices. The code covers pre-contractual disclosure, marketing, training, support, and dispute resolution.
  • The European Code of Ethics for Franchising: The EFF has developed a code of ethics for franchising, which has been adopted by the BFA. The code focuses on pre-contractual disclosure, franchisee selection, advertising, and termination.
  • The Competition and Markets Authority (CMA): The CMA is a UK government agency that regulates competition and consumer protection. The CMA has published guidance on franchising advising franchisors and franchisees on their legal obligations and best practices.
  • The Intellectual Property Office (IPO): The IPO is a UK government agency responsible for administrating intellectual property rights, including trademarks, patents, and designs. The IPO advises and supports franchisors and franchisees in protecting their intellectual property.

Although the regulations need to be followed, they protect both the franchisor and its franchisees.

Summing up the workings of a travel franchise: Benefits, challenges, and key takeaways

Investing in a travel franchise gives you the best of both worlds. You are a business owner, can work your own flexible hours from wherever you like, and put as much or as little time into building your business as you want. 

You also benefit from working with a well-established, reputable company that has implemented all the systems and marketing needed to get started. This allows you to get your business up and running without all the extra groundwork and costs that usually comes with starting a new business. 

The travel franchise you join also gains from having you onboard. If you are passionate about the travel industry and you love to help others, you are an invaluable asset to the company, assisting the brand in growing and cementing its reputation within the travel industry.

If you are interested in investing in a travel franchise, The Travel Franchise may be a good place to start, particularly if you have never worked in travel before or want to work in your spare time or part time alongside another job until you have grown the business and have established a steady income. 

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