A Highly Profitable Business Model that's Recession-Proof
A seven figure turnover is the year one target for new franchisee John Hollins, who has revised his ambitions upwards after experiencing the CeX business model first hand
When John Hollins opened his first CeX store in May this year his business plan was based on his expectation of achieving a year one turnover of £850,000. However, since trading he has realised that he has the potential to increase it to £1.2 million!
John reveals: 'One of the great aspects of a CeX franchise is that it has a highly profitable business model that is recession-proof as well as working well when the economy is strong. In my first year I'm aiming to make an annual turnover of £1.2 million and once I've been trading for a bit longer I feel I will be able to move up to a turnover of £1.5 million.'
John had not worked in retail before becoming a CeX franchisee. 'I was a hotelier in the small to medium market. I realised that I needed a change and, despite the fact that I could have re-invested in the hotel industry, I wanted something that would provide better return on my capital so I decided to look into franchising. I read about CeX in The Franchise Magazine and was impressed because it has been operating for 18 years and so it was clear that the company knows what it is doing. I also spoke to CeX franchisees before launching - such as Steve Bolt who now owns three stores - and all of them have been delighted.
'CeX also appealed to me as I've always liked gadgets and I get to sell something that we all use. The business model is very simple and it is easy to understand - in my first week of trading I was confident that my expectations were going to be met. As you buy products from customers as well as selling them you don't have to worry about buying stock. It's great to know that all the money you've taken after a day of trading is your money.'
Founded in 1992 CeX has been expanding steadily across the UK. CeX stores buy, sell and exchange a range of technological goods including video games, DVDs, mobile phones, computers, digital electronics and music. As part of its franchise package CeX offers franchisees training and ongoing support. John says: 'Before launching my business I had access to as much training as I wanted. I spent a week in a store in Wolverhampton and I spent time in stores in Leeds and Wakefield. I feel entirely comfortable within the organisation, which is very professional and easy going. Hugh Man, the Franchise Director, has been especially supportive.'
With ambitions to expand his business and own and operate as many stores as possible, John is confident that CeX will provide the support he needs to achieve his aims: 'In the future I'm looking to have at least three shops. As a franchise owner a franchise it is important to be able to trust the franchisor, which I feel I can do with CeX.'
Interviewed by Derin Ibrahim