From niche to 'riche'

Launched by Mike Yeats as a standalone business seven years ago, then as a franchise opportunity around 18 months ago, Racing Challenge is a patent-pending, simulated racing experience in which up to eight people can race against each other. It is currently the only franchise of its kind in the UK, and Mr Yeats is carving out a special niche for himself.

He's not the only one. Many franchises in the UK are specialised, niche players - companies that present unique challenges as well as special opportunities.

"Being first to market hasn't been without its difficulties," says Mr Yeats. "We had to do a lot of development on the technical side, and then had to work hard on the marketing to make ourselves known in the entertainment sector - and that was even before we began rolling out as a franchise."

Since he did not have any direct competitors, he had "first-mover advantage". But he also found himself constantly navigating uncharted waters. "The best thing we did, therefore, was to keep our initial pilot running as our core business," he says. "Now we're always ready to react positively to market shifts for the greater good of the network. This, I think, is critical, and potential franchisees should always ask franchisors how they aim to meet changing market conditions."

He has also found that he needs to be quick to overcome any scepticism from potential franchisees about the size of the market opportunity. "Because there's no benchmark they can measure the business against, as they could with, say, a hamburger or coffee franchise, we have to help them overcome their initial reservations," he explains. "The best way to do this is by showing them what we do, how we do it, and ultimately how successful our original pilot still is. For instance, we had our most profitable month in July of this year, and this is the sort of thing every franchisor wants to be able to tell potential franchisees, particularly in tougher times."

Even with the economic downturn a certainty, and despite the tightening of corporate belts and the renewed prudence of the average household, Mr Yeats still feels that niche franchises, particularly within the entertainment sector, can take simple measures to keep profits up.

"If people want to increase their turnout at an event, a good draw card, such as Racing Challenge, can really boost attendance. Far from seeing themselves as a fad or gimmick, it's important for franchisors and franchisees in niche markets to present their businesses as positive revenue generators. We did this, it proved successful, and we passed the advice onto our franchisees."

While franchisees in his own network benefit from his knowledge, what words of wisdom can he impart to potential franchisees looking to buy a niche franchise?

"Examine the bigger picture beyond the business," he says. "How large is the market potential? Is it untapped, or simply not there? It's really important to do the research and be honest about the likelihood of the franchise being profitable in the long run."

Richard Nimse, director of Silverdaze, a party-plan franchise selling unusual and one-off jewellery pieces, has gone through many of the same experiences as Mr Yeats. "Because we've started a franchise where there's little direct competition, we've had to learn as we've gone along," he says. "In this sense alone, Silverdaze is unique because the business model is evolving day by day."

One of the biggest things the business has had to do is develop a bespoke computerised system to cope with the increase in the number of franchisees and stock. "As advice to franchisees thinking of buying any niche business, always investigate to find out if the franchise has, or is going to have a robust, specific and scalable system, especially if there's a lot of stock movement involved. Ultimately, it will make managing their individual franchise that much easier," he says.

Today, Silverdaze boasts an online stock database that everyone in the network can use. "When you've got a network of franchisees operating across the country, the need for a centralised system everyone can tap into and draw from is imperative.

"For example, our franchisees - ones that were too far away to come and look at the new jewellery ranges we were getting in - can now view and order more than a 1,000 lines of jewellery. By the end of this year, the system will also have an online diary, a bookkeeping and accounts package and streamlined compliance procedures. It's taken a long time to develop but has streamlined the business and allows us to get a snapshot of where the business is at, at any given moment."

And when it comes to buying a niche franchise in the current economic climate, he is optimistic about the new franchisee's prospects. "A niche business is often small enough to adapt," he says. "It will usually be more personable, and is likely to have a genuine ethos of customer service rather than the phoney kind you get with much larger organisations. Also, if the niche business specialises in something of real quality, it's more likely to do well because, in a recession, buyers become more discerning about their purchases." 

Silverdaze

Since Silverdaze was set up just three years ago, its franchise network has grown rapidly and now has almost 20 franchisees. With low overheads and malleable working hours, the opportunity has proved particularly popular among women looking for a flexible and sophisticated business opportunity.

Many of the franchisees have seen excellent growth in both output and turnover, with the company's highest sole trading performer turning over £59,000 in sales doing just over two events per week.

The jewellery itself is carefully selected from around the world by company founder Diana Serle, and includes pendants, necklaces, chains, chokers, earrings, brooches, anklets, bangles, belly-bars, bracelets and rings, most with inset semi-precious stones.

No selling experience or existing knowledge of the jewellery sector is required, though a passion for the products is desirable. A Silverdaze franchise would suit anyone looking for a flexible business who enjoys socialising and working regularly in both domestic and corporate settings.

A Silverdaze franchise is extremely easy to run, and benefits from low overheads and no management fees. The company has also just invested heavily in a new system to streamline operations and enable franchisees across the country to view new jewellery ranges and make purchases without having to travel to Silverdaze's head office near London.

Included in the franchise package is full assistance and support developing an initial customer base. Franchisees are also given a wide range of marketing materials and new ideas for marketing strategies. The first £8,000 (full retail value) of jewellery pieces is also included in the initial investment fee.

Racing Challenge

More than a sit-at-home computer game, more than an arcade game, and more than a multi-player internet experience, Racing Challenge is a fresh new concept where the drivers are pitted against friends, family, work colleagues or even total strangers. In true Grand Prix racing style, up to eight people of any age can compete in a way that approximates the thrill of being on track at any one of a number of the world's greatest racing tracks.

Potential franchisees can choose between two main business models. The first is the Super 4, a four-seater option where the machines are held in a 12-foot trailer that can be pulled by a standard family car. The second is the Super 8, eight-seater option, which is contained in a larger vehicle. This is an important consideration as franchisees considering the eight-seater - while not needing to have an HGV licence - would need to be happy to drive the much larger vehicle. They will also need to make sure that they have somewhere suitable to keep their trailer or truck such as a good-sized driveway or lock-up. In addition, there are budgetary costs to consider, as the cost of the Super 8 franchise package is also higher.

With around 10,000 birthday parties in the UK each week, as well as many corporate events, new franchisees will have plenty of opportunities to generate business. Right now, there are 35 new franchise territories available for the right candidates. As part of their package, new franchisees get full training and ongoing support, a fully branded trailer with racing car simulators, further branded products, full race team clothing and much more. Franchisees also benefit from the low overheads associated with a home-based business, genuine working flexibility plus any relevant leads generated through Racing Challenges' central website.

NBC bird and pest solutions

Founded in 1993, NBC Bird and Pest Solutions is a successful and widely-recognised national bird and pest control company that, through franchising, has established itself as a leading name in the pest control sector.

Since pests can cause health hazards as well as progressive damage to stock and/or premises, homes and businesses will almost always treat pest control as a priority. This is good news for franchisees, as it almost guarantees an ongoing and steady flow of year-round business.

One of NBC's franchisees recently turned over £320,000 in their third year, highlighting the positive demand for the business. And this news must have spread because in the first six months of 2008, 12 new franchisees signed up to join NBC's franchise network, exceeding even the expectations of the company's head office.

One of the things making NBC particularly notable, if slightly unusual, is its use of birds of prey to keep feral birds off buildings and away from waste disposal sites. Under the auspices of a well-trained franchisee, these falcons are adept at scaring away even the most tenacious of airborne vermin, such as pigeons and seagulls. In addition to this business quirk, NBC also installs bird proofing as well as a host of other preventative measures for dealing with pests such as rats, mice, wasps, cockroaches, fleas, insects, ants and bed bugs.

All new NBC franchisee benefit from centralised lead generation as well as four weeks' comprehensive training at NBC's Norfolk-based head office, learning everything about running the business. Subjects covered include IT, health and safety, falconry, surveying, safe use of herbicides and pesticides and air gun use. Items included in the franchisee start-up package include two birds, bird housing, pest control kit, vehicle livery and all marketing materials and insurance.

Importantly, while running the administrative side of the business requires a small area at home and the use of a PC for customer database and accounts, NBC is ideally suited to those who enjoy working outdoors.

Bartercard

Bartering is the oldest form of trade, and is currently used by some 85% of the world's Fortune 500 companies. Almost $1 trillion worth of barter transactions are carried out annually, a figure that only accounts for those deals that have been tracked.

Established in Australia in 1991, and the UK in 1996, Bartercard International (BCI) has grown to become the world's largest trade exchange.

But how does it work? Effectively, Bartercard is a neo-feudal system bringing the mode of non-cash transactions, backed with robust compliance and security systems to protect traders, into the world of modern business. The Bartercard trading system helps predominantly small and medium-sized businesses grow and diversify mainly through the reduction of cash outlay and the preservation of all-important cash flow.

Bartercard's membership and trade volume has increased over the last few years, a growth arguably facilitated in recent months by a global economic downturn characterised - particularly in the UK - by a dearth of liquidity. Today, Bartercard enables trading of more than £1 billion globally, each year, whereby business members trade with each other using the Trade Pound (T£). Bartercard effectively acts as a clearing house for all transactions, recording the credits and debits of all members.

Franchisees receive income from any transactions made within their franchise territory. In addition, franchisees benefit from comprehensive training and support. Training covers sales, administration, recruitment, and financial planning. Franchisees also get all marketing and support materials, relevant hardware and software to run the business, as well as their own exclusive territory.

A Bartercard franchise is a fully scaleable business, provides access to national and international trade opportunities, and can be a very lucrative franchise opportunity for serious entrepreneurs.