How to run a retail franchise


Interview with a retail franchisor

Interviewee:
Michael Johnson, MD at greetings card franchise Card Connection
CV:
Formerly finance manager at Prior & Co 
Key tips:
Retail experience inessential; can-do attitude vital. "Look for [a franchise] which is established, popular and performing well despite ongoing economic challenges [...]  Don’t be afraid to ask to see sales figures!"
Michael Johnson, Card Connection

FranchiseSales: Michael, what does a typical day – if indeed there is a typical day – involve for a franchisee managing a shop?

Michael Johnson: There are two types of retail franchise available. The first is where the franchisee is the retail store manager.

These are franchises like McDonalds, Specsavers or clothing retailers like the Levi store. A typical day would be similar to that of any shop owner. It involves meeting customers and managing stock, staff and suppliers.   

The other type of franchise in the retail sector is where the franchisee actually supplies the retailer. This is like Card Connection’s franchise opportunity.

A typical day for this type of franchise is harder to define, as the franchisee visits numerous outlets on a call route to replenish stock.  Franchisees will meet many different people on a daily basis and supply stock.

An independent trader ‘going it alone’ will have to develop systems, secure premises and source products from scratch. Without contacts and know-how, this takes time and any mistakes can be costly and could risk failure in the fledgling business

Some franchises, like Card Connection, also require that products are merchandised or displayed by the franchisee so this can be quite a creative element to the work.

FS: How much does the role differ from someone who runs an independent business in the same industry?

MJ: Managing a franchise means you are buying into an established and successfully proven business model.  As a result, the risk of failure compared with setting up your own business is significantly reduced.

The franchisor will offer a support network and systems to ensure you have everything you need to run your franchise successfully from day one. This can include many aspects depending on the business, but may include: marketing, brand awareness, training, product development, access to national account customers, access to online ordering systems, IT support and accounts support.

An independent trader ‘going it alone’ will have to develop systems, secure premises and source products from scratch. Without contacts and know-how, this takes time and any mistakes can be costly and could risk failure in the fledgling business.

FS: What does it take to succeed in this sector?

MJ: Because all training is provided by the franchisor, usually no experience in the sector is necessary. However, a ‘can do’ attitude combined with a positive outlook and enthusiasm will go a long way to ensuring your success.

A ready smile and a friendly, helpful outlook will go down well with customers and a dash of determination will usually ensure you have the attributes to make the grade.

FranchiseSales: How much involvement does the franchisor have in the day-to-day running of the business?

MJ: Initially, the franchisor is fairly heavily involved. This is through training and support to ensure the franchisee is ready to run it successfully from day one.

For example at Card Connection, initial head office training is followed by training in the field with the support of a dedicated business development manager over a period of several weeks. While you are learning the ropes this input is helpful.

From then on the degree the franchisor's involvement depends on how much help you need on an ongoing basis. As a franchisee it's your own operation so the responsibility is yours. However, the franchisor will always be available to help you when needed.

FranchiseSales: What are the most challenging aspects of the role and why?

MJ: The current economic situation has no doubt affected the retail sector. However, consumers still need to make purchases on a daily basis and so there are still many success stories to be told.

Therefore, if you are considering buying a retail sector franchise consider the type of franchise carefully. Look for one which is established, popular and is performing well despite the ongoing economic challenges faced across the globe.

Don’t be afraid to ask to see sales figures!

FranchiseSales: How many staff do retail franchisees tend to need?

MJ: It depends on the franchise. Look at similar sized franchises within the same business to determine how many staff you are likely to need.

Your franchisor will also be able to give you advice on this. At Card Connection some of our franchisees start out on their own and take on staff as the business grows.

Some who purchase larger territories need to employ staff from the outset.

FranchiseSales: What sort of hours do franchisees tend to work? 

MJ: Working hours will depend on the franchise. Most retail franchises are full-time roles, although some offer more flexibility than others.

Discuss working hours with your prospective franchisor and don’t be afraid to ask to talk to existing franchisees. Even between franchises, however, the answer may vary according to personal circumstances and the particular business.

However, be realistic about how many hours you would like to work. Often running your own franchise will involve long hours but you will enjoy all the fruits of your labour.

FranchiseSales: To what extent does the high mark-up on greeting cards make this an easier sector than most margin-wise?

MJ: Greeting cards have been a popular sector in the retail market for many years and all figures suggest this is set to continue. Prices are carefully calculated based on the cost to design the greeting card, to produce and print it, to ship it plus the hidden costs like marketing support and brand development.

At Card Connection we balance these different aspects of product production in order to offer an extensive range of cards at different price points to suit all customers’ needs. As a result, we offer high-quality products which are good value and still offer an excellent return to our franchisees and retail customers alike.

FranchiseSales: How have you adapted to the challenge of online competitors like Moonpig?

MJ: Online greeting card companies like Moonpig have seen high profile publicity in recent years. However, this only represents a very small proportion of the overall greeting card marketplace.

The vast majority of greeting card sales remain in store. ‘Distress purchases’ continue to be a key market for Card Connection and this is why consumer outlets like forecourts and independent retailers are important retail customers to organisations like Card Connection.

High street sales of greeting cards also remain buoyant and this is likely to continue. Card Connection continues to produce the most extensive range of greeting cards available and the sales speak for themselves.

About The Author

Adam Bannister Ex-Managing editor
Adam previously managed all editorial content on FranchiseSales.com, as well as on all other titles in the Dynamis stable, chief among them BusinessesForSale.com.
 
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