Founders of Franchising: An Interview with Simon Woodroffe

YO! Sushi Founder and Dragon's Den star Simon Woodroffe discusses his experiences of franchising his business and offers his tips for people considering becoming their own boss.

Milestone birthdays often provide cause for reflection on past achievements and future ambitions, indeed many franchisees have been spurred to leave employment upon 'coming of age'. It was upon reaching 40 that Simon Woodroffe scratched his entrepreneurial itch and went into business for himself. 'I felt unemployable,' he remarks. 'I was running out of money, had got divorced and didn't feel successful inside. I knew I was running out of time.'

In fact, Simon had achieved a lot of success designing stages and sets for concerts for the likes of Rod Stewart and Stevie Wonder, as well as the original Live Aid. He had then moved into television, packaging and selling broadcast rights for concerts around the world. However, after his 40th birthday Simon decided to take a 90 degree turn into the restaurant industry.

'The restaurant industry is high risk, a lot of concepts fail,' he reflects. 'I had no previous experience to draw upon, but my view is that unless you need very specific skills (such as in brain surgery) changing from one thing to another is not difficult. I view the lack of previous experience as a positive thing - you come to the business with no skeletons in the closet, can take a fresh look at the industry, and you find it exciting... it turns you on! In the restaurant industry everything's in the detail, and I developed an emotional belief that my idea would work which carried me through.'

Simon's idea was YO! Sushi - a sushi restaurant concept that embraces the Japanese love of high-tech gadgets and karaoke. The first restaurant was established in 1997 in London's Soho, and its success has spawned a network of 18 more company-owned restaurants across the UK, with a further eight established via franchise licences in Greece, France and Dubai.

The decision to offer franchise licences outside the UK has been motivated by a desire to tap into the local knowledge and entrepreneurialism of Master Franchisees. 'We have local knowledge of the UK and didn't feel the need to franchise,' Simon reasons. 'However, when we came to look at international expansion we needed all our capital to expand in the UK. YO! Sushi CEO Robin Roland has some experience of franchising and we felt that we could move quicker by going that route.'

Describing the development of the franchise network as a 'learning process', Simon reflects that as a franchisor it is important to focus on franchisee support. 'The trick to franchising, we have learned, is to take a reasonable cut of the revenue and in return give a substantial amount of support,' he explains. 'We provide comprehensive manuals, conduct onsite visits and are constantly on the phone with our franchisees. There is an ongoing relationship between us that must be maintained. Our philosophy is that the more successful our franchisees are, the more other people will want to step in with us and help us grow.'

Another aspect of franchising that appeals to Simon is that it decentralises decision-making for the network. 'I don't want to be at the top of a pyramid,' he points out. 'I'm not good at running things, I prefer to work with people who are good at running things and let them get on with it. I use the brand, get involved creatively, and everything I do involves other people.'

In September 2003 Simon sold the controlling stake in YO! Sushi for £10 million, retaining a 22 per cent share. He is maximising the use of his creativity to build new brands under the YO! Group umbrella, with a clothing range developed under YO! Japan and hotel concept YOTEL. Franchising is not on the agenda for these brands at the moment, and Simon is still very much committed to growing the YO! Sushi network in the UK via company-owned expansion. 'We know the market potential,' he reports. 'There's not the demand for a Pizza Express-level of network expansion - rather we are looking at a total network of up to 50 restaurants.'

So making the step into business ownership later in life has worked out well for Simon, proving you don't have to be a 'tuck shop entrepreneur' like Richard Branson to make it in business.

'Older people are in a very good position to start their own business,' Simon comments. 'They have a lot of life experience, have desire and are extremely 'investable'.'

Interview by Stuart Anderson