On the road
- Article 1 of 3
- Business Franchise, October 2011
One of the biggest concerns for anyone thinking about buying a franchise is money: how much it costs to acquire, as well as the initial outlayon stock and equipment, plus the ongoing costs. If only there was a way to keep all of those to a minimum... Well, potentially there is: the mobile franchise, as Rob Buckley discovers
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With mobile franchises the main allure is clear: it's just "a man and a van" with no property to acquire or look after. "People are attracted by the lower costs and low overheads," says Tim Harris, head of franchisee recruitment at ChipsAway, a mobile car bodywork repairs franchise. "You're not paying rents, rates or insurance on properties." As a result, ChipsAway's franchisees can break even in just a few months.
But when you are just a man - or a woman - with a van, there are other benefits, too, some that can be just as attractive, if not more so, than the prospect of good money. "People like being out and about," says Sue Jerham, marketing communications manager at Autosmart, which produces vehicle cleaning products. "They don't want to be stuck in an office or a shop - they like variety. Some really enjoy being on the open road, singing along to the radio." In particular, in Autosmart's case, many of the franchisees are drawn to vehicles and are 'car or bike mad', she says.
In fact, Dougie Borland, an Autosmart franchisee, says being in it for "only the pounds and pennies" is a recipe for disaster. "If your only reason for doing it is thinking I can make £60k a year, you'll fail. My target is £35k, which is what I earned in my previous job. As it happens, I'm going to earn much more than that this year, but that's a bonus. People need to do it for the lifestyle." With no bosses to report to apart from themselves, no offices to go back to after their last job and work routes carefully planned to take them close to home at the end of the day, mobile franchisees can get a better work-life balance than they would do in a business with fixed premises.
Laura Cottee, territory services manager at Riverford Organic, whose franchisees deliver organic food from the company's farms to customers' doorsteps, also highlights the surprising sociability of the job. "When you work in an office environment, you only speak to customers over the phone. Here, there's a community around the customer base and people can build relationships." It also helps that her franchisees are enthusiastic about the ethical virtues and quality of the company's products: "They can talk about them till the cows come home."
Not everyone wants to be in a van all day, however, and most franchises emphasise that their franchisees usually spend as little time as possible on the road. "If you're driving all the time, you're not selling. Driving time is dead time," says Autosmart's Sue Jerham. As a result, franchisees are encouraged and in some cases trained in the art of route planning, so that the time spent travelling between jobs is kept as small as possible.
This also helps with another concern that potential mobile franchisees might have: the ever-increasing cost of fuel. "It's affecting everyone," says ChipsAway's Tim Harris. "But that's reflected in the charge to the customer and it's not hurting us - leads are up 30 per cent." Indeed, because customers are equally affected by rising fuel costs, they're less willing to drive places and are keener to get companies to come to them rather than the other way round.
The biggest cost in the mobile franchise is, of course, the van. Getting the van in the first place and the prospect of not just losing mobility, but the entire business if it's ever out of service, is something that every potential franchisee would worry about. Many mobile franchises therefore offer deals on vans to their franchisees. Riverford Organic works with its franchisees to get special offers. Laura Cottee says: "We're constantly working with third parties to get the best van deals possible."
Volkswagen leases vans to ChipsAway franchisees, rather than selling them, which also helps cut down on the initial outlay. "We always have reserve vans in stock, so if there's ever a major breakdown or theft, we'll have a van to them the following day and they'll be back to work," says Tim.
While only six per cent of current franchises are mobile, according to the Natwest/bfa Franchise Survey 2011, the potential is there for mobile to be an increasingly popular franchising option. Read on to find out what life is like for a mobile franchisee.
Autosmart
Dougie Borland has been operating an Autosmart franchise in East Kilbride since January 2009.
Why did you decide to go into business for yourself?
My last job was in manufacturing. It was a 24/7 operation and I was working extremely long hours, getting calls all night long. One day I had a disagreement with my boss. I went away to have a cup of tea, opened the paper and, there, staring me in the face, was an ad for Autosmart.
Were you looking for a mobile franchise?
That was one thing that concerned me. A big part of working for me is the social side. But out on the road, it's only five minutes to the next customer and I see 20 people every day.
How long did it take to break even?
Four months. The guy I bought the franchise from was making £3,300 a month: I was earning £6,900. The main difference was I stuck to the programme.
Autosheen
Former B&Q employee Rob Stobbs turned his back on the office world to become an Autosheen car valeting franchisee.
Was there a reason you set up a mobile franchise?
I was working pretty much on my own, sitting behind I desk, and I had a bit of liking for cars. And I only had so much money and the low start-up costs were appealing.
Is there much travelling involved?
About five to 10 per cent is travelling and I try to keep that to a minimum. The
more local you are, the lower the overheads. There's a lot of value in having a local brand.
What was your biggest challenge?
My biggest challenge was building up the customer base. To get my foot in the door, I'd go to office blocks and offer to clean a car outside for free.
How long did it take you to break even?
I broke even this month, which was 18 months since I set up the business. It's a lot better than my projection.
What advice would you offer others?
If you're half-hearted, it won't work.
ChipsAway
Cardiff-based David Blunt took over his father's ChipsAway franchise in 2002 and is getting ready to expand.
What do you like most about the job?
How flexible you can be with work hours. I can be with the kids for every single after-school activity.
Do you enjoy the driving side of the job?
The driving I can take or leave, but I love using my hands and I'm a sociable person. I get to meet new people every day and I'm amazed how many friends I have from work.
How about not having a home base?
I like not having a home base. When you finish the last job, I can go home or pick up the kids.
What do you need to succeed?
You've got to have enough drive to push the business. When it's raining or minus 10 degrees Celsius, like it was last Christmas, you've still got to do the job, even if you can't feel your feet.
Riverford Organic
After a career in the printing industry, Paul Jardine took over Riverford's Camden & Islington territory five years ago. He's gone from being 'a man with a van' to having three vans and five drivers - but only gave up driving six weeks ago.
Why Riverford?
I studied environmental ethics at university. I was going to go back to an academic field but as soon as I found Riverford, I thought it was ideal.
What do you enjoy about running a mobile franchise?
The driving. Being involved in retailing. Dealing with customers. Being out and about, and seeing different parts of London.
Do rising fuel costs affect you?
They do, but it's not a significant cost. Being in London, insurance is the greatest expense. I have a lot of customers but I can make one tank of fuel last two weeks.
How long was it before you broke even?
I probably started feeling like I was making money after two years.
What do you enjoy most?
Getting to know customers: people are pleased when they get good quality food. There are also other things we do in the business, such as cooking classes.
Any tips?
You have to stay focused and don't expect reward straight away.
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