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Market Focus


the rise of the internet, the idea of opening a retail franchise may seem crazy to some. But for anyone with the right franchise and with passion and the determination to work hard, retail can still be a sure-fire winner. The Zip Yard is a franchise system that started in Belfast in 2005 and deals with garment alterations and repairs. Within three months of opening, the business was able to take on a second unit, and by 2007 had launched its first franchise. It now has around 25 stores in the UK and Ireland and plans to open another 20 franchises this year.


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“The concept of what we’re doing is not driven by the economy,” says co-founder Brian Kielt. “Before the downturn, with most of our shops, 80 per cent of our work was adjusting new clothes. But since the downturn, that’s flipped right round and 80 per cent of what we do is repairs to old clothes.” Brian points to a franchisee he met with recently who increased sales every month in 2011, sometimes by as much as 40 per cent month-to-month. By making its stores bright, clean and well fitted, with leather armchairs and TVs for customers, and by offering a high-quality service, The Zip Yard can charge more than its rivals, and customers trust the franchise with their garments.


Nathan Sermon, head of franchisee


recruitment at Cash Converters, agrees that times are harder than they used to be. He says: “There are fewer people walking up and down the high street and they’re careful where they spend their money.” Yet the franchises continue to do well by focusing on customer service, and judicious site location and choice of acquisitions. Cash Converters’ revenue stream initially came from people selling their own household goods to the company for resale in its high-street stores. This has since been extended to personal finance and loans, with roughly 70 per cent of stores now offering these services. And while online sales are affecting the high street, the franchise has fought back – with its own website as well as trading on eBay, where franchisees place items they might not be able to sell through their stores. And more franchises are opening all the


ith so much


doom and gloom surrounding the economy at the moment and the high street affected by


time: South Wales is virgin territory for Cash Converters and Nathan has just held a roadshow there looking for franchisees. Sandwich chain Subway is also finding ways to beat the slow economy and the rising cost of raw materials such as wheat. “At the moment, it is difficult, but we had a strong end to the year and we finished on an upbeat note,” says Paul Heyes, a development agent at Subway. An innovation that helped the company achieve that upswing was actually proposed by one of its franchisees, the £3 lunch enabled it to position itself as a quality food outlet with a low price-point.


“For someone with the right franchise, the right ideas and a love of hard work, retail can still be a sure-fire winner”


But one new trend, which Paul says


currently applies to 150 existing stores but is set to treble in the next three years, is the ‘store-in-a-store’ – a Subway franchise located within another business such as a convenience store or a garage. These require less floor space and overheads, and rent can be spread across both businesses. He says: “Typically, it costs about £90,000- £100,000 for a standalone store, but a store-in-a-store is about 60 per cent of this cost.” There’s even now the possibility of a


‘store-in-a-store … in-a-store’! Tutti Frutti is a popular frozen yoghurt franchise with 500 outlets worldwide and has just launched its first UK store in London, with another seven set to open across the capital before the Olympics. The company is currently investigating the possibility of opening franchises within other stores – including major fast-food outlets. Yusri Othman, project operations manager for Tutti Frutti, says that the company is looking a lot more at co-branding other companies, particularly those, “that do not have a well- known dessert component, for example.” Tutti Frutti is also keen to open stores in the suburbs, as well as kiosks in shopping malls, where the costs compared to the high street are smaller. Here four franchisees explain how they have made a success of their retail franchise.


March 2012 | Businessfranchise.com | 31


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