2014 Trends: How Convenient?
The Franchise Magazine aims to bring readers unique insight into certain trends that are expected to be significant in the foreseeable future. And, according to Professor Roy Seaman, founder of Franchise Development Services, convenience stores register at the top of the list.
Convenience store franchises are set to grow throughout the UK,” utters Roy unequivocally. Having started FDS 32 years ago, and having seen hundreds of franchise operations fail and thrive, he is extremely well qualified to identify what business areas are likely to be big this year.
“7-Eleven is the world’s largest convenience store franchise with over 50,000 outlets worldwide, he continues. “It, together with a considerable number of other North American franchise brands are now researching the opportunity in markets such as the United Kingdom.”
Convenience stores have long been a popular franchise choice in the US – the veritable Mecca of franchising – yet the same cannot be said this side of the Atlantic. While Premier Stores invite existing shop owners to join their network, One-Stop, a convenience store franchise concept from Tesco has recently been extended. In addition, WHSmith announced its WHSmith Local initiative, which saw two trial franchised stores open in different locations around London. But according to Roy, the 7-Eleven model for expansion represents one of the best examples of successful franchising globally: “7-Eleven has grown in Japan to over 3,000 outlets over the last 20 years and some estimates suggest that the UK could easily have over 5,000 convenience store franchises by 2025.
“Existing supermarkets are already putting various “franchise models” together but none of these to date have adopted what we at FDS consider to be a Genuine Business Format Franchise. This would require them ensuring that all 21 elements of a Business Format Franchise are in place.”
The value of a recognised brand is something franchise owners benefit from in abundance, and this is one of the main pulling points of franchised convenience stores for consumers – familiarity.
Roy adds: “We all recognise the importance and value of a National Brand and when local people, who are already part of a community, own and operate a franchise which is trusted and brings all the buying power benefits then this is good news for customers, franchise owners and the franchisor alike. The franchise owners frequently bring years of local knowledge and invest their time, ability and money to ensure that their local convenience store is a success. The fact it is owned by a member of the village or local community is a perfect win-win solution.
The people that take on the franchise are on their own but never alone since they have all of the support of the franchisor behind them 24/7. You therefore have the franchisor providing the expertise in brand development, site location and continual support and the franchise owner gets down to the day to day business of serving their local community.”
Convenience stores is an area of development that canny entrepreneurs have been aware of for some time, particularly as governmental plans to build a range of new housing estates before 2020 are announced, giving plenty of opportunity for new investors to enter the market. It is likely Britain will see a wave of new local shop opportunities enter the market soon – making money through one of these such franchises may end up becoming simply a matter of convenience.