Patterson & Rigby - Q&A: Thinking outside the box
Over the last decade the Snack-in-the-Box network has recorded a number of successes. Gordon Patterson and Gary Rigby interview Director Bill Owen
Gordon Patterson: Congratulations on the 10th anniversary of Snack-in-the-Box (SITB ). Have you been with the company since the beginning?
Bill Owen: I have been fully involved with SITB since the original pilot business was established as a viable franchising opportunity. I have been responsible for evaluating and refining the original model and taking the opportunity to a fully developed national network.
GP: What kind of interest do you recall receiving 10 years ago from the franchisee marketplace?
BO: 10 years ago the SITB concept of delivering snacks to the workplace employing between two and 20 members of staff was unique. This was, and still is, an opportunity to capitalise on the massive potential that this niche market offered. It generated tremendous interest from prospective franchisees throughout the UK and continues to do so. The scale of the marketplace and the strong association with the powerful brand name of Cadbury allowed us to recruit over 20 franchisees in just 12 months.
Gary Rigby: Your relationship with Cadbury seems to be key?
BO: SITB has come to recognise the power of brand association. Clearly such a well-known and respected brand as Cadbury has allowed both franchisees and customers to feel confident with the SITB concept and this has been a major factor in the establishment of our national networks.
As an indication of our commitment to continuing brand association we have now launched a further franchise with our sister company, VendSetters in association with Ginsters. This opportunity allows franchisees to develop their businesses in association with Ginsters, one of the top 10 brands in the UK specialising in sandwiches and savoury pastry products. Again we are focusing on maximising delivering the Ginsters 'Real Honest Food' brand to the workplace market via vending machines and mobile catering facilities.
GP: Has the business system evolved or changed much over the years?
BO: Over the years the basic concept of delivering confectionery and savoury snacks in pre-packed self-service boxes has remained constant. However we have adapted our product range to cater for the changing eating habits in the workplace and have developed a much more efficient data capture and management information system that allows franchisees to benefit from computer-based systems.
GR: With the benefit of hindsight, would you change much if you were starting out again?
BO: Probably not a lot. Having identified a massive neglected marketplace, SITB's unique way of delivering snacks to the workplace via a method that suits the end user is profitable for all concerned. The Self-Service Box and later Compact Vending Solutions perfectly satisfy customer demands and as the concept was tried and tested at the point at which it was brought to the franchise market, we knew we had a winning formula. However, the management team has gained a great amount of experience and knowledge over the last 10 years. This will be fully exploited as we move, grow and develop Vendsetters.
GP: How many locations do you service in the UK?
BO: SITB franchisees service around 18,000-20,000 repeat customers every week either with the Self Service Box or Compact Vending Machines.
GR: How do the box and vending franchises complement each other?
BO: We realised very soon after launching our 'box' franchise that a secondary market existed. This was the medium sized workplace that was too big for our box service and too small for conventional vending operators to be interested in. These sites, due to their size, had previously never qualified for a conventional vending machine. We therefore developed the 'Slimline Compact' vending machine to satisfy the needs of companies with 25-100 employees and our vending network was launched six years ago. We can now offer the complete snack provision service to two distinct markets in a complementary manner.
GP: You seem to provide strong field support to franchisees - what does that consist of?
BO: Support is very much key to our success. In addition to our Sales Director Matthew O'Neil and myself, our Operations Director Mike Funston heads a team of five field based franchise and support managers. An additional seven members of our Head Office team are available to provide support and advice on every aspect of our individual franchisees' activities.
From the moment a new franchisee embarks on a one-week residential training course at our Head Office we are fully committed to ensuring that his business is comprehensively launched. This includes a sales campaign to establish a client base and a full vending machine or box installation programme to ensure that the franchise is generating a cash income within a matter of weeks. We are then totally committed to a personalised support package throughout the duration of the franchise term.
GR: How many franchisees do you now have for both the box and vending businesses, and is there any room for further development of the franchise network?
BO: With 65 franchisees operating our box service and a further 45 franchisees looking after 6,000 vending machines, it would be fair to say that 90 per cent of the UK and Ireland is benefiting from our service. There are still a limited number of opportunities available for the SITB service. Our challenge is to maintain thorough support to all existing franchisees as we move forward in developing another national franchised network with Vendsetters.
GP: What are the main milestones you would identify in your business development over the last 10 years?
BO: The initial satisfaction came in the achievement in the first year of over 20 franchisees successfully recruited. This was followed by full membership status of the British Franchise Association being awarded after just three years. The launch of our vending machine franchise six years ago was particularly important as it allowed us to provide the 'complete' service to businesses. Perhaps the most important recent development was in June 2005 when my colleagues Matthew O'Neil and Mike Funston and I successfully completed a management buyout of Snack-in-the-Box Ltd as a result of the retirement of the original owners. This has ensured that the business remains in the hands of the original three members of the management team who collectively have over 26 years of hands-on experience with SITB.
GR: Why did you launch the third franchise, Vendsetters?
BO: During the development of SITB we have demonstrated that we can build and manage a successful franchised network, we have become experts in the vending world and have demonstrated that we can maximise opportunities for a major brand. As a result we have worked closely with Ginsters, one of the most well known and trusted food brands in the UK, for over two years in preparation for the launch of our Vendsetters franchise. This is an opportunity for franchisees to capitalise on the £3,300 million sandwich market by a combination of specially designed vending machines and a bespoke fully featured mobile delivery vehicle.
GP: What is the market potential for the sandwich business in the UK?
BO: There are approximately 27 million people in the British workplace. The British sandwich market is worth around £3,300 million. About 19 per cent of sandwiches are purchased at work which means around £627 million is spent on workplace sandwiches. Only 48 per cent of workplaces have canteens and that number is diminishing. Therefore sandwiches are worth £345 million and growing.
GR: What are your further plans for growth and development?
BO: Our immediate objectives are to maintain the current level of support to our SITB franchisees and to maximise the Vendsetters growth opportunities. However, having demonstrated the benefits franchising can offer major brands we are currently in discussions with equally well known companies to evaluate how best to introduce their products and services to franchising.