13 Sept 2019
Brexit Jitters Fail to Undermine Confidence in UK Franchising Sector
With the clock ticking down to the UK's departure – one way or another – from the European Union, would-be franchisees in one English region don't seem deterred from tactically investing in certain fresh business ventures.
Visitors to the UK's Northern Franchise Exhibition had the chance to assess both a variety of business-licensing opportunities and the likely prospects for some of the country's regional economies in the post-EU departure world. Given the uncertainties currently facing the UK market overall, it would be only too understandable if potential franchisees shied away from making any major commitment. With this very much front of house, several exhibitors were only too keen to assert that their particular sector was singularly Brexit-proof.
One such company was Tutor Doctor, a business first established in Canada 10 years ago and now operating in 16 countries. Since its launch, this home-tutoring specialist claims to have delivered some 5.2 million hours of one-to-one educational sessions to young students across the world.
Outlining how this pans out in practice, Deaglan Wardman-Furey, an Educational Consultant with the Toronto-headquartered business, said: "As a franchise, it's all about finding the right tutors for the right students and helping those students meet and exceed their educational challenges. As a franchisee, you spend half of your time finding the right tutors with the right qualifications and the other half finding the right students."
In recent years, the home-tutoring industry has enjoyed massive growth in the UK, with Wardman-Furey confident it will weather any economic upheaval. Expanding on this, he said: "Regardless of Brexit and all the related uncertainty, people will still need to be educated. When you talk to people about tutoring, it's not seen as a debatable expense. Put simply, it's an investment in a child's future.
"In many ways, it's a recession-resistant opportunity and we've enjoyed constant, steady growth over recent months. With the London area now almost saturated with franchisees, our priority is to expand into other major cities across the UK."
Another company betting that, even in straitened times, parents are still more than happy to spend money on their children was Boogie Beat, a southwest England-based business that provides pre-planned music and movement sessions for pre-schoolers and above. Explaining its appeal, Director Lisa Langford said: "We started the company in Somerset 19 years ago and began franchising it nine years ago. Our sessions are centred around singing and dancing and all based on traditional stories and rhymes.
"In terms of targeting, we start with babies and go right up to six or seven years old, servicing workshops, schools, nurseries and after-school clubs. We also go into care homes to do intergenerational sessions. A lot of our franchisees have dedicated teams and their own class teachers. Their businesses can still be going when they're having a baby or they want a bit of time out.
"When we started out, we were quite unique, but now there's definitely more competition. That's healthy, though, and shows there's a need for this kind of service. At the moment, we've got 30 franchisees, with six of them new this year."
Targeting a similar demographic was The Creation Station, a Devon-based company providing child-friendly arts and crafts sessions, which now has more than 100 franchisees across the UK. It offers a range of different class types, including Tiny Treasures (birth to six months), Little Explorers (15 months-plus) and Creative Crafters (adults).
Outlining how the business first came about, Franchise Manager Tracey Prescott said: "For us, it's all about nurturing children's imaginations. The business was started in Devon back in 2002 by a mum who had three boys and wanted to find fun, active things for them to do. It started off with the Little Explorers and just developed from there.
"Now we also provide event entertainment, which led to us running the KidsZone during the 2012 London Olympics. As we offer such as vast range of different things, there's a huge range of ways that individual franchises can develop. We have some franchisees who focus solely on children's activities, for instance, and others that are wholly adult-oriented."
Alongside the expected franchise opportunities on offer at the show – typically health and fitness clubs or food and beverage outlets – were a number of more outré options on offer, including Flip Out, a Canberra-headquartered trampoline-park operator. Founded in Australia in 2012, the company launched into the UK market in 2015.
Assessing the current range of franchise opportunities on offer, Paul Murphy, a Director of Flip Out UK, said: "We've got 26 franchisees over here, with six more under construction and about 30 that we're considering committing to at the moment. Ultimately, we're aiming to have about 60 in the UK. We're already the biggest player in Europe and the third largest in the world, with somewhere between two-and-a-half to three million people coming to our centres every year.
"Originally, we started out with quite basic trampoline parks, but we needed to evolve the proposition from a one-hour jump session to a three-hour half-day at a small theme park. While families can't always afford to go for a £500 day at Legoland two or three times a year, they can afford to come to us for a three-hour £60 session, which also includes food. We're now offering a wide range of adventure-park experiences – inflatables, high wires, fairground rides…"
Perhaps one of the more surprising exhibitors at the show was Vodafone, the UK-based mobile-phone giant that was also the event's lead sponsor. Although founded 37 years ago, it was only last year that it initiated something of an unusual franchising model.
Taking up the story, Franchise Manager Jenny Barber said: "Our franchise arrangement is actually more of a partnership, meaning there are fewer upfront costs. Franchisees take on one of our existing stores so the fit-out is already done and we still own all the stock. The new franchisees just have to cover the overhead costs and they make money from a mark-up on the existing stock.
"The UK is one of the last markets where we have implemented this model. As it's the home of Vodafone, we needed to be absolutely sure that this was the right programme. So far, it's been really successful. By the end of 2019, more than 200 UK stores will be operated on a partnership basis. Ultimately, we plan to retain ownership of only 20% of our UK retail network, with the rest of it franchised out."
Confident that the UK's uncertain, non-aligned future would have no negative impact on the company's franchises, she said: "I don't think Brexit will affect us particularly badly. People are still going to want telephones, whether they're travelling or not. We will still offer free roaming across 50 countries, so I don't think our business will suffer. If you're in manufacturing and you're exporting, then maybe it's a problem. But as a company that's already genuinely global, I think we're pretty much covered."
The 2019 Northern Franchise Exhibition took place from 21-22 June at Manchester's EventCity.
Catherine Jones, Special Correspondent, Manchester