What Should I Beware Of When Looking At Other Possible Franchises?

Driving Schools and Franchises vary
Some franchise agreements will be good, but some will be bad
A Franchise Agreement is a legal contract, so it is very important to:
- Read the contract very carefully
- Make sure that you understand all the terms
- If necessary get legal advice
Do not only look at the marketing
Read the small print carefully

The majority of driving schools offer the same type of franchise
- The driving instructor pays a set amount to the driving school each week
- Regardless of how many, or how few driving lessons they do
- Regardless of how much work the driving school has done on behalf of the driving instructor
Many driving school franchises basically boil down to an ADI guaranteeing:
- To pay a specified amount of money per week
- For a set period of time, typically 12 months
The driving instructor is legally bound by the contract
The driving instructor has little, or no guarantee that the driving school will deliver anything

You have not been supplied with any clients
- Franchise fee is payable
You are ill and can’t work
- Franchise fee is payable
A family member is ill and you can’t work
- Franchise fee is payable
You have a family emergency
- Franchise fee is payable
There is snow and ice on the ground and it’s not safe to work
- Franchise fee is payable
You take a day off
- Franchise fee is payable
You take a holiday
- Franchise fee is payable

It is common for driving schools to structure their franchise to give you up to 4 weeks franchise free per year
Typically many instructors will use 1 or 2 of those weeks around the Christmas and New Year period, because their clients are more interested in celebrating than in driving lessons
This doesn’t leave much leeway for any other periods that you are unable to work, or want to book as holiday or days off
In return the driving instructor gets very little if anything in the way of guarantees

Some driving schools will guarantee to supply you with a minimum number of new clients
An example might be that you are guaranteed 50 new clients in a 12 month period
- However, you have signed up to pay your franchise fee for 12 months
- You can’t challenge the driving school over receiving insufficient clients until you have paid 12 months of franchise fees
- The argument could be that “There is still time, you could get 49 new clients in the final week of the year!”
- There is also of course no guarantee that the 50 new clients don’t just have 1 driving lesson each!
Guaranteed new clients appears to be reassuring
- However, in practice it might have no value at all!

Does the driving school decide on your working hours and the days that you work?
Some driving schools expect driving instructors to work 7 days per week, and be available for long hours each day

Does the driving school decide which areas you will teach in?
Some driving schools expect their instructors to cover an extremely wide geographic area
- This can result in a lot of wasted time travelling between lessons

Some driving schools will force you to have their car
Some driving schools will give you a choice of car, but “push” you towards their car
Are you paying a premium price for the car that the driving school provides?
Do you really need a brand new car?
Do you really need your car replacing every 6 or 12 months?
Is the size of the car being supplied what you would choose?
Is the model of car being supplied what you would choose?
Is the level of trim on the car what you would choose?
Is the engine size / fuel economy / engine power what you would choose?
The driving school is making all of the choices, but you are paying the cost
How does the cost of the car compare with buying or leasing your own car?

The first impression can be that a low franchise fee is good
- There can however, be an element of, 'You only get what you pay for!’
- Sometimes things can be too cheap
A low franchise fee often goes together with a low driving lesson price
It costs money to run a driving school:
- To provide the administrative back up
- To run a website
- To provide an online diary
- To provide advertising and marketing
- To provide telephone answering
- To provide time and expertise to help you when you need it
If the franchise fee is very low, you are probably not going to get very much for it
It is the relationship between the number of clients, the driving lesson price and the franchise fee that determines your earnings
- Do not just look at one of these factors in isolation.
Some Driving Schools offer a low franchise fee, but they provide you with little more than details of how to pay your franchise fees!

A high driving lesson price to charge clients can be attractive
- But is it a higher price than people are willing to pay?
- Is there sufficient suitable marketing to attract sufficient clients willing to pay the high fee?
- Is a high headline price used, but most driving lessons are offered at reduced prices?
Driving schools with high driving lesson prices often also have very high franchise fees
It is the relationship between the number of clients, the driving lesson price and the franchise fee that determines your earnings
- Do not just look at one of these factors in isolation.
Some Driving Schools have a high lessonfee to charge clients, but also have high franchise fees and discount many driving lessons

Many franchise agreements use a system that tends to favour the driving school
- The franchise fee has to be paid, regardless of how much, or how little work is available
This system could also encourage driving schools to spread work more thinly and recruit more driving instructors, simply to collect another franchise fee
Some driving schools collect their franchise fee but just leave the instructor to their own devices
- In effect providing nothing but a driving school name, and a bank account to pay the franchise fee into!

Driving Schools and Franchises vary
Not all driving school franchise agreements are bad
A Franchise Agreement is a legally binding contract
- It is important to read the contract carefully
- It is important to make sure that you understand all of the contract terms
- If necessary get legal advice
Do not only look at the marketing
Read all the small print fully and carefully

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