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Franchise

The Franchise model: What is a franchise and why is it so important to the activities sector?

April 20, 2022

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Franchising has proven to be a successful business model for growing companies. It builds brand recognition, helps eliminate operational costs, and streamlines the administration of growing businesses. Some business owners wish to grow their business beyond what the company and its capital can handle. Others want to take advantage of their brand’s and products’ value in places outside their immediate reach.

At its base, a franchise is a type of licence that grants franchisees access to a business’s knowledge, processes, and trademarks. A franchisee receives all the operational know-how for a business whilst paying annual licensing fees.

The Drive Phase podcast played host to the founders of two franchised businesses with international reach last year. So, what can you learn from their experience on how to build a successful activities business and grow it through the franchise model?

 

What was the turning point?

For Paul Thompson, founder of Water Babies, he was, as he would say, “breaking free from the mundane”As an avid swimmer himself, teaching his daughter swimming became a passion he had to follow. Paul had been a successful accountant but decided to swap his suit for the Caribbean, becoming a diving instructor in the process.

When he returned to the UK after a natural disaster destroyed his family home, he began the process of formulating Water Babies. Now a stay-at-home dad, he drew on the bond he had teaching his own daughter swimming to invest in this new business.

That old chestnut about ‘necessity being the mother of invention’ is exactly what built Little Kickers. Christine Kelly, founder of Little Kickers, started her career as a trainee accountant at PWC, an experience that filled her with dread every morning.

Yet on starting a family, she found that she wanted to return to the world of work but in a more flexible fashion. As a working mother who wanted to see her children grow up, she needed flexibility and a football class for her young son. On finding that there were no classes for young children, she decided to set up her own, and in 2002, Little Kickers was born.

 

How Water Babies created an operational model

For Paul Thompson, the brand was the centre of their business. If they were going to grow their business, they needed to translate the brand that resonated with so much of the community to any new region. Franchising put their own standards and processes, what they were passionate about, front and centre.

Opening their first franchise locations in Bristol and Edinburgh, they grew to just under 100 clients. They knew then that any further growth would mean getting down to the nitty-gritty of operationalising their franchise model.

The package would have to include all their systems and processes, from how they ran IT and booking to how they marketed the swimming programme to their local communities. With a group of consultants on board, they went from 4 Water Babies franchises to 14 in just one year.

 

How Little Kickers is adapting and evolving

It goes without saying that the pandemic has been difficult all around. But what happens if your model had your customers paying 12 weeks in advance and your customers were then in lockdown for more than three months at a time? That was the problem Christine Kelly faced when restrictions hit Little Kickers.

Franchise models don’t include those huge overheads that the centre would have to absorb. Flexibility was their friend. As their customers began to demand their money back for classes their little ones would never get to take, she was able to centralise a programme that would put their memberships on hold. Instead of paying 12 weeks ahead, they would move to a monthly model for what was a seasonal activities programme.

Whilst the pandemic meant they put many of their investment plans on the back burner, she could take a step back and really address their social responsibility. Meeting her franchisees at a conference held at Old Trafford, they were able to address a global concern. How could they make single-use plastics a thing of the past?

Little Kickers offers a free uniform made of 100% polyester, packaged in single-use plastic. Finding a supplier for eco-friendly uniforms was essential if they were going to move toward a plastic-free future. They found a supplier who was able to make uniforms from plastic bottles rescued from the ocean, and they were planning to roll out at the end of the restrictions.

The uniforms were slightly more expensive, so the question was whether they would pass on this cost to the customer. The process by which they were able to keep the majority of their customers by toggling their payment model made the thought of transferring this cost to the customer untenable for them.

 

Want to know more? We have a range of activities providers who can give you the insight you need to scale your business. If you choose to franchise your business, know that Coordinate Sport can offer you the knowledge and support you need to make it a success.

Listen to The Drive Phase podcast here or anywhere you get your podcasts!

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