High street special – why franchising in the retail sector is still big business

Those interested in franchising in the retail sector need not be put off by the alleged “death of the high street” – sales are on the rise and prospective investors can rely on the expertise of the franchisor to help their business succeed. Now could be the perfect time to enter the marketplace, says Katie Shevlin

The combination of rapid growth in online sales and a tough economic climate means apprehension about the sustainability of businesses has been a common, and understandable, issue when considering an investment in the retail sector. With high street sales increasing, however, consumer confidence is buoyant and matched by optimism about the next business year.

Apprehension about investment in retail-based businesses is also undermined by the fact that new franchisees are essentially buying into a well-established brand and, as such, this business investment involves less risk than an independent start-up would. Any brand that has an existing high street presence will have a franchisor with a wealth of knowledge regarding the retail sector and its fundamental concerns, such as the acquisition of premises.

These factors also mean that previous experience in the retail sector is not always necessary. A passion for customer service, however, is a quality deemed extremely important by many franchisors, as premises-based businesses usually involve regular contact with the public and it is imperative to keep consumers loyal to the brand.

Here, four franchisees describe the benefits and challenges that come with a franchise in the retail sector.

CeX

Ismail Ladha became a CeX franchise owner in 2010 after running an independent mobile phone store. He has just opened his third CeX store, this time in Keighley.

Why did franchising appeal?

I realised that there were benefits being part of a bigger group with a support structure, so I decided to look at franchises that might fit my skills.

Why did you choose CeX?

I wanted to be part of a successful and established brand so I could benefit from all that they could offer me. I liked CeX because it was a similar business to the one I was already operating.

What support have you been offered?

CeX offer full training and support throughout the life of the business and have a team of people who work to ensure that I get the best possible margins while keeping my customers happy. New developments and systems are introduced regularly to improve the business and ensure franchisees keep up-to-date with trends in the marketplace.

How has business been so far and what challenges have you faced?

My first store quickly become profitable, allowing me to expand into another location and I am now opening my third store, which I’m sure will not be my last. The business has been challenging but highly rewarding. Dealing with new people everyday, developing a customer base and managing staff in multiple locations is both exciting and a little daunting at times. Luckily, I have good people working for me and a great support team who enable me to manage my sites and business.

What are the benefits of franchising in the retail sector?

The greatest aspect is that every day is different and I can say in three and a half years I have never been bored – I’m always kept busy.

What kind of person do you think would suit a retail franchise?

If you are investing in the retail sector you must be passionate about the product and enjoy dealing with the public.

Ripples

Richard Garnett and his wife Diane have been operating their Newbury franchise for seven years. Having been made redundant in 2006, Richard was keen to make the best out of an unfortunate situation and decided the time had come to utilise all the skills and experience he had gained over the years and make them work for him.

Why did franchising appeal to you?

After being made redundant, I looked into franchising. I liked the idea of it because I knew that buying a franchise was a less risky way to start a business as the failure rates are much lower than private start-up businesses.

Why did you choose to invest in a Ripples franchise in particular?

Most of the franchises I had seen up to then were ‘man-in-a-van’ type operations, but I felt with my skillset I could do a lot more. I was ambitious and looking for something more management-orientated – that’s when I saw Ripples. I bought my bathroom from Ripples in Oxford and had a really great experience from start to finish. When I saw the Ripples advertisement in a franchise magazine I just had a lightbulb moment!

What training and support did Ripples offer?

For my training, I spent two weeks at the flagship Bath showroom with the managing director, Paul, and the head office team, going through how the showroom works, how to quote, marketing tactics – everything you need to know really! Once trading, the Ripples support team visit new franchisees weekly for two months to ensure the foundations for success are laid, and the national marketing campaigns help to drive clients to the door. As far as the support goes, being a family business is a real plus. Everyone at head office is very passionate about the business. It’s a real comfort to know the whole team is just a phone call away and nothing is too much trouble; they want you to be successful.

What are your plans for the future of the business?

We’re now in our seventh year in Newbury and business growth has allowed us to pay off the loan taken out to supplement the redundancy settlement and fund the business. You can really tell it’s a family business and I think the whole ethos just shines through. In my experience, husband-and-wife teams do this as a way of life rather than just a money­-making exercise. We’re optimistic and looking ahead with excitement!

What advice would you give to anyone considering franchising in the retail sector?

My advice would be to listen to the franchisor because they know the business inside out. Follow what they say, even if you think you know better, and you can’t go wrong. I personally think that not being from the retail industry was great for us; we didn’t have any preconceptions and just did what we were told. It’s worked out well!

Granite Transformations

Having come across Granite Transformations at a franchise exhibition and liked the product and the package, Derek Delaney and his wife Pauline opened a showroom in Bolton and gradually built up a thriving business. Derek applied his skills to managing the sales and installation team, worktop production and putting the business systems in place, while Pauline turned her creative eye to customers’ kitchen and bathroom décor, as well as ensuring the showrooms are amongst the best merchandised in the trade.

Why did franchising appeal to you?

We’d always wanted to run our own business, but thought the only way we were really going to achieve this was through franchising. With a franchise, all the business problems have already been ironed out for you.

How has your experience of the business been so far?

It’s been hard work building the business, but it has been very rewarding in the sense that we are our own bosses. We have customers who come to us from all over the region and, despite the recession, we’ve just had our best 12 months ever. We have also opened a new showroom in Altrincham and extended our franchise territory, to take advantage of the market potential there.

How do you ensure that you stay ahead of the competition in the retail marketplace?

In addition to the mainstream Granite Transformations worktops and bathroom décor products, we have also added Bella by BA replacement kitchen doors to the mix, creating opportunities for complete remodelling projects, which adds another revenue stream and maximises the potential of expensive retail space.

What are your plans for the future of the business?

We aim to develop the business into a multi-showroom enterprise over the longer term, with plans being drawn up for two further outlets in the North West.

Mail Boxes Etc.

Colchester-based businessman Steve Sleigh opened his first franchised Mail Boxes Etc. (MBE) store in Colchester in 2000. Now with a second store in Ipswich, he has received MBE’s own accolade of Franchisee of the Year in recognition of his outstanding achievements and business development, and also for his unique contribution to the success of the MBE network as a whole.

Why did you decide to invest in a franchise?

I had become disenchanted with my job as a sales rep for printing companies and wanted to do something different, preferably working for myself. I was cautious because past experiences of setting up a business meant I was well aware of the pitfalls of being my own boss. Many years ago I’d had my own small printing firm and, at a later stage, a business selling and installing automatic gates and garage doors. In both cases, the marketplace was crowded and the margins were small. It meant hard work and a lot of headaches – and no one to share it with. I’d read about franchising and understood the concept. I particularly liked the idea of working for myself but the real appeal is the back-up and support that comes from being part of a bigger organisation. I also believe it’s a huge benefit being able to talk to other franchisees and learn from their experiences.

Why did you choose MBE in particular?

MBE matched exactly what I’d been looking for and things are going really well. I believe MBE’s strength is in its ability to adapt to constantly changing demands as business methods change and, by tailoring services to suit the local marketplace, MBE ensures we provide what customers want.

What are the benefits of a retail- based franchise?

At MBE, we pride ourselves on offering support and advice to other businesses. We have the ability to be extremely flexible – to meet tight deadlines, for example – which can be invaluable to customers. We hold a reasonable amount of stock for our printing, packing and shipping, but we rely on our suppliers to deliver next day, which makes it easier for us. In addition, many businesses outsource parts of their operations to us. For example, we act as the post room and the print department for many companies because we have the capacity to do jobs quickly, accurately and often more cost-effectively than in-house.

What kind of challenges has your retail franchise presented?

The challenges we had as far as premises were involved was finding the best location, with one eye on the rental value and the other on foot traffic past the store. Trying to find a balance between the two was challenging but, as they say, the three most important things are location, location, location. Colchester is an ideal town for this business – the business community ranges from self-employed people and SMEs to government departments and large corporations – exactly the right customer mix for us.

What support and training has your franchisor offered?

MBE has given good initial training, which is improved and altered as time goes on based on the changing market and business model. As far as ongoing support is concerned, we receive national marketing support in the form of a website and hard copies of marketing material along with digital electronic versions. This allows us to personalise and print in store, so we can promote ourselves with local marketing, too. General support is just a phone call away.

What are your plans for the future?

I opened another centre in Ipswich a couple of years ago, so we are now looking to grow our turnover based on the two centres. Our market is changing, like most of the high street, so we are always looking to move with the times and evolve our products and services.

What advice would you give to anyone considering investing in a franchise?

Think hard before you jump. Retail can be hard work but it is great fun – the rapport with the customers keeps you going. Make sure the location of your business is right for your product or service.

Subway

The Subway brand continues to keep start-up costs low and seeks ambitious franchisees who embrace the entrepreneurial spirit. One such franchisee is Fiona Nicholson, who owns and operates one store in Washington, County Durham.

Why did you decide to invest in a Subway franchise?

As a family, we have been in business for the past 60 years and we have always tried to stay up-to-date with the constantly changing marketplace, keeping our business moving forward. The car wash facility at our petrol filling station was due for renewal and we realised that the space could be better utilised. I started to research other opportunities that would work well within a petrol forecourt environment. After looking at the Subway website and getting in contact with the regional development agent, Subway seemed an ideal franchise to enter into. It is a well-known brand, one that is on the up in a recessional marketplace and, from the first meeting, Subway seemed very keen to have us on board.

What advice would you give to anyone considering investing in a franchise?

Speak to the regional development agent; they are so enthusiastic and know their stuff. I had initially thought our shop area was too small, but one site meeting within a week provided me with a set of drawings and a business plan that showed it was easily big enough and, with a bit of effort, easily achievable. Due to the strict guidelines Subway has, you have to work hard to keep up to the high standards, but it is those high standards that make the Subway brand the number one franchise opportunity in the UK and Ireland, rather than just another sandwich shop.

Would you do it again?

Yes! I have learned so much after project-managing the store re-fit and getting the store open. I went into this knowing nothing at all about catering and, with the help offered by Subway, it all came together. It’s not easy, but with hard work and determination we got there. 

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