The franchise model is set for further growth in the convenience market with a renewed push by Bargain Booze and continuing growth in the One Stop programme.
Conviviality Retail, owner of Bargain Booze, currently has an estate of 590 stores, about 150 of which have a full convenience offer, and is looking to further expand its c-store estate into new geographical regions away from its North West heartland.
The group recently acquired East Midlands and Yorkshire operator GT News, which comprises a mix of Spar-branded c-stores and CTN outlets, on behalf of independent retailer Jonathan James, who will run the 36 stores as a franchisee. The model works on a cost-plus basis, with franchisees retaining the margin between the wholesale and retail price. All the former GT sites are leased, with Jonathan’s company James Graven responsible for premises and employees.
He told C-Store: “I’m comfortable with the idea of the franchise model. The model allows you to be a slick operation, and as an industry we need disciplines in place. With Bargain Booze the till and ordering systems are all there and ready to go, and I as a retailer can focus on customer service, community and people.”
Ultimately, he aims to build an estate of 100 stores within five years, with Bargain Booze helping him to find new sites. “I like to think of myself as a good operator, but we can all do better and I welcome the opportunity to improve,” he added.
One Stop rolled out a franchise model for independents last year, and is expected to hit 100 outlets fully trading under the brand by the summer.
Retailers signing up to the five-year contract receive IT systems, training, a manual on procedures and a store development fund of up to £50,000. At least 95% of stock must be centrally-ordered through the auto-replenishment system to receive the full range of benefits and bonuses.
Franchise groups join the ACS
Bargain Booze owner Conviviality Retail and One Stop have both joined the Association of Convenience Stores in the past month.
Bargain Booze chief operating officer Amanda Jones told C-Store: “We believe we have the potential to develop Bargain Booze Select Convenience into a really credible convenience offer, and we are keen to attract new franchisees.”
ACS chief executive James Lowman said: “We are delighted to welcome Conviviality Retail into membership, which continues a great start to 2015 in which we have recruited a number of groups and independents. With its position in the market, its brands and its franchise model, Conviviality brings another dimension to the ACS membership.”
The ACS recently changed its membership criteria to allow multiple grocery organisations to become members, meaning that Tesco-owned One Stop could rejoin the association.
Pros and cons
“Franchising would appeal to retailers who want the strong brand and disciplines which go with it. The downside is that you’re effectively a manager and not truly independent.”
Roli Ranger, Londis Ascot, Berkshire
“We need to up our game in the current market, with all the discounters coming in, and it provides you with the support network you need. Why go backwards when this is the way forwards?”
Sunder Sandher, One Stop Leamington Spa