Strategy
Part of Planning a franchise in England around the owner's job, not the brand
Two franchise strategy mistakes: earnings claims and late permissions
Two franchise strategy mistakes in England: repeating an earnings claim without its basis, and leaving permissions until after commitment, with repairs.
Some franchise strategy mistakes surface only after money has moved. Two of them sit late in a plan: repeating an earnings figure whose basis nobody checked, and leaving public permissions until the premises or the launch date are fixed. Both can be found in a written plan before the next payment.
What to take away
- An earnings figure is evidence only when its units, period and accounting treatment are known.
- A top performer's result is not a typical case, however often it is repeated.
- A franchise contract cannot grant public permission to trade.
- Check permissions before fixing premises or a launch date.
- If the evidence is late, delay the commitment instead of the check.
Mistake one: repeating an earnings claim without its basis
An earnings figure is evidence only when its basis is known. Directory copy, event conversations and social posts may repeat one sales illustration with the basis removed. Before the figure enters your plan, ask which units, period and accounting treatment support it.
CAP's guidance on advertising business opportunities says likely earnings claims should be realistic and substantiated, and that the financial commitment must be clear before the participant commits. For business opportunities, ASA guidance says marketers should state the level likely to be attained by an average respondent, not a level based on a minority of unrepresentative high performers.
The law also reaches advertising aimed at business buyers. The Business Protection from Misleading Marketing Regulations 2008 state that advertising which is misleading is prohibited. A figure you cannot trace is a question for the franchisor in writing, and an unanswered question is itself information.
| Question | What a usable answer contains |
|---|---|
| Which units produced the figure? | A named set of units and how many of the network they are |
| What period does it cover? | Start and end dates, not a description such as a good year |
| What accounting treatment sits behind it? | Whether sales include VAT and which costs sit above the figure |
| Typical or top result? | Whether the number describes a typical unit or the best one |
Do not convert a top performer into a typical case. If the answers arrive, file them beside the figure. If they do not, treat the number as unverified and keep it out of the forecast. The advert review questions apply to any claim you meet in a brochure or at an event.
Mistake two: leaving permissions until after commitment
A franchise contract cannot grant public permission to trade. Licences, registrations and local consents come from public authorities, so check them before premises or a launch date are fixed. A missing permission is a dependency that can move the whole opening.
GOV.UK's Find a licence searches by activity and place across the UK but warns that the catalogue may not be complete. Follow possible results to the responsible English authority and keep England separate from other national routes. Some dependencies need qualified review, particularly where premises or a regulated activity is involved.
Ask who will make each application and who holds the responsibility afterwards. A brand manual may describe the steps, yet the legal entity running the unit is the one that trades. The franchise entry checklist runs from the operator role to these public permissions.
A late permission means a late opening, and a late opening changes cash. The Department for Business and Trade says your forecast should cover the next 12 months. Run a later-opening case so the delay is priced before any premises commitment, and look for costs outside the headline figure that a delay would add.
Put each check before the money it protects
Both mistakes share one cause: money moved before the check. Place each check beside the decision it protects, not in a distant risk appendix, and give each gap an owner, source and last safe date.
| Decision | Check that comes first | Evidence to hold |
|---|---|---|
| Pay a deposit | The basis of any earnings figure you used | Units, period and accounting treatment on file |
| Fix premises | Permissions for the activity and place | The responsible authority identified |
| Fix a launch date | The permission route and a later-opening case | A forecast with a delayed start |
The earlier gates, owner fit and territory proof, are set out in four gates a franchise idea must clear. The two checks here sit after them and before cash leaves the account. Franchisor answers also belong in the vendor due diligence record.
Repair the plan
Keep the rejected assumption in the decision log, so a later forecast does not quietly restore it. Record the claim, the answer received and the date. When someone proposes the old figure again, the log shows why it was set aside.
Review the repair with someone who missed the sales meeting. They may spot where enthusiasm has been recorded as evidence. A shared open-item checklist gives every unresolved question a named owner and a due date.
If the evidence is late, delay the commitment. A strategy becomes useful when an adverse finding can still change it.
Before you act
- Ask which units, period and accounting treatment support each earnings claim.
- Keep unverified figures out of the forecast.
- Search Find a licence by activity and place, then follow results to the responsible English authority.
- Ask who makes each application and who holds the responsibility afterwards.
- Run a later-opening cash case before any premises commitment.
- Record each rejected assumption in the decision log.
Common questions
What should I ask when a franchisor quotes an earnings figure?
Ask which units, period and accounting treatment support the number. CAP guidance says likely earnings claims should be realistic and substantiated, so a figure without that basis stays unverified until the franchisor answers in writing.
Can the franchise agreement give me permission to trade?
No. A franchise contract cannot grant public permission to trade. Licences, registrations and local consents come from public authorities, and Find a licence is a starting point because it warns that its catalogue may not be complete.
When should permissions be checked?
Before premises or a launch date are fixed. Follow possible results to the responsible English authority and allow for a later opening in the cash forecast if the answer is slow.
