Big brands bring footfall. That’s the view of Neil Giles, creative director at design consultants Circle. "The obvious success story in the UK is the M&S tie-up with BP, which has revolutionised the idea of shopping at service stations, and in South Africa, Engen has a great tie-up with Woolworths Foodstop."
But he adds that big food brand tie-ups are now ubiquitous so it can be difficult to stand out. However, one company that’s really standing out for its success with brand alliances is Top 50 Indie, Euro Garages.
Managing director, Mohsin Issa, says: "We partner with global brands like Subway, Starbucks and Burger King to ensure our forecourts offer world-class facilities and give customers across our entire estate the same great experience.
"By carefully selecting our partners we can provide customers with local convenience while maximising both fuel, retail, food and drink sales across our site portfolio. Partnerships like these have been instrumental to our success they support our growth strategy, increase our presence in a number of UK regions and, more importantly, create jobs."
The Subway brand is going great guns in the UK and has just opened its first store here in partnership with Ireland’s, Applegreen at Uckfield, East Sussex.
Subway currently has more than 1,600 stores in the UK and Ireland, over 300 of which are open or in development in non-traditional locations, such as on forecourt sites or within convenience stores.
Adrian Grimes, head of food for Applegreen, says: "Applegreen is well known for providing good value, high quality food and coffee on-the-go. The Applegreen food team is constantly looking for innovative solutions to help our busy customers through their day. Therefore, with its convenient, fresh approach, a Subway store is a natural complement to our forecourt offer."
Meanwhile, a Starbucks spokesperson says the company’s customers expect the best possible coffee wherever they are, and the success of its drive-thru and motorway stores show that this is a big opportunity.
"We currently have over 80 Starbucks stores situated on forecourts or motorway services across the UK. We are proud of our long-standing licensed partnerships with companies such as EuroGarages and Welcome Break, bringing great coffee and exciting employment opportunities to communities that Starbucks has not yet had the opportunity to serve across the UK. Following our announcement in November 2011, we are on track to open 200 drive-thru stores by the end of 2016, as part of a commitment to open 300 new stores and create 5,000 jobs in the UK."
Costa makes its coffee convenient by operating over 2,500 self-serve Costa Express machines across the country. Of these, 1,703 operate out of forecourts, a 130% rise from the previous year’s Costa Express forecourt offering of 736.
Managing director of Costa Express, Scott Martin, says: "Coffee is an important factor for drivers who stop at petrol stations. Recent research conducted by us found that buying a coffee is the main reason for 29% of visitors to a service station, and a third of these people, importantly, ended up buying unplanned items.
"The same research found that Costa Express brings drivers onto the forecourt. Fifty-seven per cent of the people asked said that a Costa Express will increase the likelihood of them visiting the forecourt, with over a third saying they would go out of their way to visit a station with a Costa Express."
To ensure everything runs smoothly, Costa implements The Costa Check a monthly audit of every machine carried out by Costa’s brand excellence advisors. Twenty thousand audits will be completed in 2013. Says Martin: "Auditing the things that have been identified as important to the customer, the Costa Check score needs to be 89% to pass acceptable standards of functionality." Costa uses insight garnered from in-machine telematics to improve the customer experience. Using a ’live feedback’ system, customers can text or email Costa their thoughts which are then fed directly to the relevant store.
Both machines currently available in the Costa Express range use touch screen technology and have cutting-edge telemetry and data availability, which can give retailers the most accurate statistics on sales. Martin continues: "This data allows them to merchandise stock appropriately to optimise revenue while ensuring that they are giving the customer what they want. Our exceptional service has led to the UK’s forecourts seeing a 140% increase in invoiced sales over the past year, nearly hitting the £4m mark."
Moving away from coffee, and one of the latest names to be seen across the UK’s motorway network is pizza delivery franchise, Papa John’s which has teamed up with Welcome Break to open 11 pizza outlets. As a result, Papa John’s is now serving up pizza to motorway travellers in Welcome Break services in locations including Abington Scotland, Gretna Green, Keele, Gordano, Leicester Forest East, South Mimms, Cobham and Fleet.
"Welcome Break has a footfall of around 80 million people a year," explains Dave Galvin, UK franchise sales manager, Papa John’s. "We are delighted that such a trusted brand has recognised the quality of Papa John’s pizza and selected the franchise to be rolled out within multiple outlets. We are keen to grow the number of Papa John’s stores throughout the UK and our deal with Welcome Break is part of this strategy."
Papa John’s is now the world’s third largest pizza chain. The company has around 4,000 stores across 33 countries. The firm has 208 stores in the UK and more than 100 new stores are expected to be opened over the next few years.
According to Paul Stafford, PR executive at the British Franchise Association, franchising offers a statistically much better route to success in business ownership and has consistently outperformed other economic models and sectors. Less than 5% of franchise businesses close each year for commercial reasons and around 90% report profitable trading each year.
"The combination of a locally owned and run business in conjunction with the back-up of a recognised brand, ongoing support and the wider franchise network gives consumers the best of both worlds and the franchisee a much greater chance of success than an independent start-up." Stafford says a lot of the world’s most well-known brands use franchising as their expansion model.
The advantages are obvious you get to own your own business, trading under a national or internationally renowned name, with the support, training and systems that have been established over many years.
He continues: "You’re trading from day one with a name that people recognise, trust and look out for, usually making it a lower-risk investment. It’s worth noting though that the general rule is: the bigger the brand, the harder it is to be accepted as a franchisee and the higher the initial franchise fee. There are a lot of great opportunities with smaller brands to ’get in on the ground floor’ of the model, rather than the more prescribed methodology of the established brands, and for a lower initial investment. It all depends on what you’re comfortable with.
"With around 1,000 brands now using a franchise model in the UK there’s an enormous range of fees that suit any budget. Some start from just a couple of thousand pounds, right the way up to the global franchise brands (think McDonald’s, Subway and so on), which can stretch up to several hundred thousand pounds or more.
"Each franchise charges a different initial fee, and then monthly management service fees royalties, in effect usually according to how established the brand is and how difficult (and therefore costly) it is to train someone in the systems."
Stafford says that banks usually look favourably on franchises because they offer a proven business model. "Before a business can be properly franchised, it should have a trading history and have piloted at least one franchise operation for at least 12 months to prove the concept, the marketplace, and that it can be transferred to other areas.
"Because of this, there are trading figures and a demonstrable history that banks like when considering lending. As a general rule, banks will lend up to 70% of the start-up cost to an established franchise, and look more favourably on British Franchise Association member brands because we have independently accredited the franchise model. The sector has been less susceptible to the financial downturn than others when it comes to funding."
Stafford advises any retailer thinking about signing up as a franchisee to do their homework: "Think carefully and take your time before signing a legally-binding contract, which you should have checked over by a franchise lawyer, and make sure the opportunity is what it says it is. Some of the ways to do this include checking with existing franchisees, checking BFA membership, checking accounts and online information.
"Don’t just take things at face value. And if all the franchise wants from you is a pulse and a cheque to join, walk away fast! That’s not a business that is going to succeed, joining is a two-way process and you’ll need to show you’re serious."
He says there’s a wealth of objective advice on the BFA website, and adds that it’s a not-for-profit body so you know you’re getting the right resources without any sales patter.
Ilyas Munshi, commercial director at Euro Garages, answers questions about this company’s tie up with Subway:
What hours are your Subways open?
Usual opening hours for Subway are MondaySaturday 8am-10pm and Sunday 8am-9pm. We have some stores that also operate 24 hours.
Which are your busiest days/times?
Weekdays 11am-2pm (lunchtime); and weekends: 11am-2pm (lunchtime), 5-7pm (teatime).
Which are your most popular lines?
The £3 lunch deal is a popular product line. Our biggest seller is the BMT sub followed by tuna, chicken tikka and spicy Italian.
Do people come to your site just for Subway rather than for fuel as well?
Sixty per cent of our Subway customers visit stores to simply purchase fresh sandwiches.
What is the average spend in your Subway outlets?
How easy is it to run a Subway franchise?
The business model is simple to roll out and we get on-going support to market the store, obtain technical advice, and partake in national and regional promotions.
And how easy is it to train staff?
Training and development is ongoing for our staff members. However, when we open a new store, staff members are put on a 10-day induction/training programme. They can also access online learning as and when required.
Subway provides training for all new franchisees; this includes a two-week training programme before the store opens and then ongoing training for all levels of employees from sandwich artists to franchisees.
How do you ensure you maintain expected standards and how often are they checked by Subway?
We have a brand manager who covers nationally and has management responsibility of our Subway store estate.
He is further supported by three area managers who undertake regular store visits, provide on-going operational reviews, hands-on training and development, financial promotion of stores and develop localised marketing strategies.
Subway also monitors the stores with monthly evaluations from its field consultants, who also offer advice on best practice and how to run the store more efficiently and to the required standard.
Do you have any advice for anyone thinking about approaching Subway for a franchise?
Fully access the training and brand support available, plan your store operation (have a business plan) and recruit the right people with a particular focus on securing those who have a passion for service.