Are you an independent retailer? Have you ever considered running a franchised store? For some people, these two questions are mutually exclusive. For them, running a franchise means giving up your independence to a larger corporate entity. In the case of One Stop, this entity is Tesco, which makes it even worse. But not everybody thinks that way, and the tide is definitely turning in favour of the franchise way of doing things.
It’s worth saying that franchises have been around for a long time already (actually, they have a less-than-glorious history in the UK c-store industry, but that is arguably down to the specific business models rather than the concept as a whole). In Europe and America, many of the small store variants of the large chains are run as franchises by independents, and in the foodservice sector there are so many that it is almost the norm. For the likes of Starbucks, Costa, McDonald’s and Subway, more than half of the outlets are operated by partner companies rather than being company-owned, and they simply would not be the size they are now without a franchisee system.
In UK convenience, the art of retailing has traditionally centred around buying well, and most symbol groups have developed out of a form of loyalty scheme for wholesalers. This has served the industry well, but arguably more is needed today.
With so much competition around, a good range is no longer enough: it needs to be perfect with not a SKU wasted. Ordering needs to be slick, stockholding needs to be efficient, and operational tasks need to be structured so that gaps are filled and temperatures checked on a systematic basis.
All of these things are within the reach of a symbol group, of course, but so far this is where franchising is winning. Making money is part of it, of course, but among the new franchisees that I have spoken to, it is not the main benefit. For them, the key satisfaction is the kind of comfort they receive from knowing they have the backing of a larger retail organisation who will iron out any potential mistakes. Because for all of the brilliant and innovative independent retailers that we have in this country, there are still many others who are making mistakes that the multiples and the discounters will continue to punish.
Freedom is a wonderful thing, and the spirit of entrepreneurialism is an unbeatable source of satisfaction for those who make a success out of it. But absolute freedom also gives you the opportunity to get it absolutely wrong, and as an industry we cannot get away with it any more.