RSS feedsJohn Dunsmure
Managing director, British Chambers of Commerce
It is worth reconsidering how online might help to streamline their business processes and improve customer contact and service. It may prove very valuable in the re-order business, for example, where customers can get remakes of suits and pay online. It may even sit quite nicely with the franchise idea. The franchisee is responsible for measuring and final adjustments but the customer can make an appointment, place an order, pay and select key elements online.
This would give them continued ownership of the customer and central control over the purchasing process. In addition, it would be a great way to sell other products like ties, shirts, cufflinks and shoes, which would serve to increase the margin on each sale.
They should also consider corporate customers. Not just those businesses with uniforms, but work with their existing customer base to go into their workplaces to offer the service to their colleagues on their doorstep. Also consider the introduction of a referral scheme for your existing loyal customer base Ð drive your word of mouth harder as a result.
I would also urge them to consider international markets. Their model is very simple and should be easy to replicate.
Cathryn Hayes
Head of franchising, HSBC Bank
Key areas for King & Allen to consider when looking to franchise their business are:
• Is the business replicable? Can the personal service be offered by franchisees to the same standard?
• Is the economic climate right to franchise? The retail sector is under pressure at the moment and consumer confidence has fallen.
• Is there sufficient margin to ensure that they and their franchisees are able to make money?
The company should take advice from a franchise consultant to help put the operation together. They'll provide invaluable guidance.
The next step is to set up a pilot to demonstrate that the business is viable on a standalone basis, replicating the actual running of a franchise as closely as possible. It will provide a better idea of setting up costs, break-even sales and level of profits franchisees may expect. Developing a franchise network can be expensive, so additional finance is likely to be required. Many banks have franchise units that ensure companies receive a finance package 'tailored' to their individual needs.
However, franchising is not right for every business. King & Allen may decide to open company-owned outlets. It may be more expensive and will slow down the rate of growth, but they will retain control over their business.
Charles Simpson
Head of corporate finance, Saffery Champness
King & Allen have a successful business model, but rolling it out on a wider scale via the franchise model presents a number of potential challenges.
Strategy and guidelines for the long-term development of the network need to be prepared. As the business expands, it will be of paramount importance that the standards of quality and customer service are maintained.
A failure to recruit the right franchisees will damage the integrity of their brand at a time when it is most vulnerable. Guidelines governing the recruitment and selection of their new partners will need to be formulated.
They have identified logistics as an area of concern, and while the new stores will be run without their direct supervision, they will need to maintain some control over the management of their brand and the quality of the service and end product. Rules will be required setting out what is expected, as well as an enforceable means of ensuring standards are met.
Monitoring the standards of a growing network can be very resource-intensive and will mean a greater administrative burden, so additional recruitment will be required to the management team. Finally, existing customers should not suffer as a result of the expansion, so they need to make sure they don't over stretch.
