Franchise Brands Worldwide is on the acquisition trail

The group behind the success of ChipsAway and Ovenclean has caught the undivided attention of the franchise industry this week as new plans to extend Franchise Brands Worldwide (FBW) through the acquisition of several new businesses are announced. Group Chairman, Stephen Hemsley, tells readers of TFM Online exactly what the group is looking for in a potential investment opportunity.

Stephen Hemsley’s cemented his reputation as a world-class businessman during his 15-year tenure with Domino’s Pizza, where he took the company from around 100 stores originally to today’s total of 870 stores across the UK, Ireland and Europe. Now, together with former Co-Director at Domino’s, Nigel Wray, Mr Hemsley is in charge of one of the most dynamic franchising groups in the UK. FBW was formed in 2008 when Mr Hemsley and Mr Wray acquired ChipsAway, Ovenclean and two other brands from administration after the collapse of the My Home group in 2008. The FBW group has since enjoyed tremendous success in the five years since its inception. Mr Hemsley explained: “We know franchising. We recognised those brands had a good foothold in their marketplace, a critical mass and the potential for growth. The franchises are now stable and growing well, so now we’re back on the acquisition trail.” The group is looking to build on its successes by acquiring more franchise brands with a compelling franchise proposition from which franchise owners can make money. The FBW group operates on the principle that the success of the franchise owners individually is of paramount importance to success of the franchisor. Mr Hemsley adds: “We’ve looked at a number of possibilities to date, but the risk/reward balance has to be right. We’re very protective of our reputation and won’t get involved in anything that we don’t believe will work as well for the franchisees as for the franchisor. The first thing we look at is how the franchisees make their money, then we look at the corporate structure. Successful franchises are built on successful franchisees, otherwise you can’t recruit and you can’t grow.” Unfortunately for new start-ups, the FBW group is only looking to acquire established businesses. Mr Hemsley continued: “Our ideal franchise would be an established business with around 50 franchisees with the potential to grow to a network of around 200. Above all, a franchise joining the group must buy into the FBW philosophy. It needs to invest energy and enthusiasm, we’ll provide the ‘corporate’ element; if they love their business and are fully engaged with our vision, then we’ll work well together.”

For franchisors, the benefits are wide-ranging. Along with the glittering careers of Wray and Hemsley, the FBW group includes ‘first class marketeer’ Robin Auld as Sales & Marketing Director. Mr Auld made his name transforming the Domino’s brand name into the household term it is today. Mr Hemsley added: “We believe that keeping your brand name in front of customers is essential to long-term success. Franchisees rely on their franchisor to train them, guide and support them and to market the brand for them – that’s what we do well. We are fanatical about measuring quality of leads and rates of conversion. Robin has refined our marketing activity based on continual monitoring of results and our brands now benefit from well planned, cost-effective marketing, including national TV advertising, Google Adwords campaigns and website optimisation, as well as direct marketing. “Our purchasing power means that we can do better deals for our franchises and deliver measurable results at a lower cost.” In terms of desired franchises, Mr Hemsley is quick to point out that while no sector is particularly preferable over another, business-to-business franchises are of special interest: In our experience, royalty based franchises allow the franchisor to see what sells, deliver higher quality marketing support and ultimately enable the franchisor to identify with the success of the franchise owner, which after all, is at the heart of a franchise partnership that works.”