Notes to use with Operational manual.
Current pricing structure.
The current franchise fee for full time is £268 per calendar month.
Part time is on a pre-rata rate (2016)
This fee is invoiced on the last day of the month with payment due within 14 days. (Jane, our bookkeeper sends the invoice)
Initial period.
Many ADI’s are sceptical of franchise agreements and quite rightly so.
We like to make it a no brainer for them to start.
I take all the risks.
In the first month (which is normally a part month) they pay no franchise
In month two, their first full month, providing I have give them at least 20 hours tuition, a full franchise fee is charged but this is not payable until month three.
The driving school pays for headboard and full livery.
Those franchisee’s that have completed three years service receive a loyalty discount of £40.00 per month and pay £228
The thinking behind this loyalty discount, is that generally, the longer the franchisee has been on board, the less demand on your time.
These are also the franchisees that are likely to leave and set up on their own, so it acts as a way of keeping them.
The franchise payment MUST be made via the BACS banking system for immediate transfer.
We have a flat fee franchise scheme: The monthly fee has no bearing on the amount of new pupils introduced. When a franchisee has spaces in the diary, we endeavour to book them. Some of our more established instructors may not need pupils for several months.
So WHY do they stay?
They stay because they can request pupils at any time by simply adding the availability to their diaries. I guess they see it as a protective blanket that eliminates the risk of going it alone. We also offer more than just a pupil referral service like regular meetings to keep them updated, credit card payments on their behalf, free accounts and help and assistance when required.
Franchisees choose their own hours of operation and will decide whether the franchise fee is viable for them or not.
Pupil Referral Fees.
We invoice instructors £10.00 for each new pupil we book for them.
There is no charge if they self source or they are asked for by name.
My thinking here is that, I get the pupils; it’s their job to look after and keep them. If they keep the pupil then they are rewarded by a higher lesson rate of £26.00 (pay as you go.) or £24.00 for a further block booking.
Should the franchisee, fail to keep the customer after the initial deal then a new pupil will be provided and the franchisee will drop back to the Intro rate of £19.99 per hour. The better the franchisees skills at retaining customers, the less they work on the intro rate. Those franchisees that underperform and lose customers will find themselves earning less as a result. In my opinion, it’s crucial to reward your best performing franchisees.
Free accounts for franchisees.
We operate a very good system in conjunction with our accountant.
All of our franchisees are encouraged to use VT cash books, which is a free accounts download.
If you would be interested in having a similar scheme in place or even saving some money on your accounts, then you are more than welcome to speak to our accountant. (See full details in the accounting module)
The vast majority of our franchisees use our company accountant. They simply use the free accounts software above and send in the year-end details at the end of their financial year.
The accounts are processed and then the franchisee is informed of how much to pay and when to pay it. The driving school then pays the bill, which is currently £125.
In return for these referrals, all of our company accounts are processed for free.
This is a really good deal as everyone gains, franchisee, free accounts, the driving school, free accounts and of course our accountant gets loads more work.
Regular meetings with your Franchisees
I strongly recommend that you have monthly – bi monthly or quarterly meetings with your franchisees.
We currently book a conference room in a local hotel (When we had just five instructors it was held in my conservatory) of an evening and hold the meeting every quarter. To accommodate 28 franchisees, the cost with coffee, biscuits and cold drinks throughout is around £160.
Again, I see this as an investment not a cost as it gives me the opportunity to show my franchisees that we do care about them and it makes them feel as though they are an important part of the driving school.
At the meeting we explain any new procedures that may be coming from the DVSA .It will be your responsibility as the BOSS to attend any relevant meetings to keep yourself informed of events.
You can advise on any changes to your own working practices. I would recommend that you always explain to your franchisees why you are doing something and how they will benefit.
This is a good opportunity to instil good working practices as follows:
The correct way to take learner pass photos
- The importance of the photos and why they need to be in the set format
- Why its important they send you the details the same day
- Why their own customer reviews will be of immense value to them
- Raise any issues that have led to customer complaints
- Do not single out individual franchisees for discipline, this should be done privately and on a one to one basis.
- However any issues should be discussed for the group benefit as an example
- Always let franchisees know about investments you are making and how it will be a benefit to them
- In the event that you have to release a franchisee, explain to group why they had to go to serve as an example.
I would definitely NOT discuss in-depth marketing and work on a need to know basis. Make sure they understand the importance of test passes, customer reviews ETC but do not reveal the strategic procedure for compiling these.
When we started, we just used a flip chart to explain the key points.
Now we use a laptop with power point presentation on a large screen.
Important Note!.
Never have an open debate with your franchisees as this will give you several points of view and you will go around in circles.
I am always interested in their feedback and ideas, but these should be submitted by email for your consideration. YOU ARE THE BOSS – YOU MAKE THE FINAL DECISION.
