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Posted:13-January-2021

Exclusive interview: The benefits of buying an established business

Name: Ron & Shirley Maynard
Location: Oxford
Franchise you bought: Card Connection

Tell us a bit about yourself and what you were doing prior to buying a franchise business?

We have been Card Connection franchisees for 20 years! Before becoming franchisees we were employed at and managed both retail and wholesale newsagents and at the time we were looking to use this experience in running our own business.

Why did you initially decide to go down the franchise route? And what made you choose a franchise resale over starting a new franchise business?

We were attracted to the greeting card market generally and had started to look into buying a high street retail store. However, premises in the right location were difficult to come by and we thought the idea of taking greeting cards to customers was a brilliant solution.

How does the decision making process for buying a resale differ from buying a new franchise?

Decision making processes are made easier the more information you have.

Buying a re-sale business means it has a financial history. Therefore, it is easier to predict how well the franchise will perform based on past figures. When we bought our Card Connection franchise little development had taken place as two decades ago the company was in its infancy. Today, however, someone taking on our Oxford franchise has 20 years of trading history to look at, which means they can make well informed decisions about the potential of their investment.

Our Oxford franchise is for sale. We currently supply almost 170 retail outlets with Card Connection’s quality range of cards and accessories and are now looking forward passing on our established business legacy to another enthusiastic franchisee or couple. The territory has a turnover of in excess of £144k pa and this offers a unique opportunity for a new franchisee to take on an established, award winning business and earn income from day one.

On the other hand, buying a ‘virgin’ territory means, there is no established client base. It is very difficult to accurately assess the potential income and the length of the ‘start-up phase’ to generate a positive cash flow.

Because there is much more uncertainty and therefore risk with a start-up this can influence the potential for gaining funding for the purchase. The franchise departments at the major banks are more likely to lend funding to buy an established business with a good trading history and I know Card Connection is well known and respected at these institutions.

What made you decide on the franchise you bought?

It was actually a trip to a franchise exhibition that first introduced us to Card Connection’s award winning concept. Card Connection franchisees place greeting cards and accessories in retail outlets on a ‘consignment’ basis. The display equipment is supplied free on loan, minimising the retailers’ costs and maximising their profits. The award winning concept is one step beyond ‘sale or return’ as retail customers don’t have to buy the stock initially; they only pay for what they sell. This is a great business model and it has proved really successful over the years!

Product was also an important consideration. Card Connection’s greetings card ranges have always been unparalleled in terms of quality and design and these days feature some of the best-selling licenced product available including Disney and the ever popular, super-cute character Boofle.

What have been the main benefits to you buying a resale business?

Because Card Connection’s network is full, franchises that come up for sale are all re-sale territories. These are often where a franchisee is retiring as the average stay at Card Connection for a franchisee is around ten years with more than a few others like us who have been at the company many more years!

Buying a re-sale territory means you are purchasing an established business with a full trading history. It will have an existing client base and significant marketing effort will have gone into building the business over the years. Processes will already be in place and with the right training you can just step straight into a new role as a franchisee, making money from day one.

For example: As an organisation Card Connection has 14 staff dedicated to helping franchisees optimise the profitability of their respective franchises. Newer franchisors – usually those selling virgin territories – will simply not have this established infrastructure.

In addition, Card Connection is unique in the industry as, as well as many independent retailers and convenience stores, the company also works with nearly 100 Regional and National retail accounts such as Costcutter, WH Smiths Motorway Services, NISA, BP and Spar. These relationships with key customer groups take many years to develop and newer franchises simply don’t have these important connections to share with their franchisees.

Were there any challenges you had to overcome?

We run our franchise business from home, distributing the greeting cards from a specially designed, built and double glazed cabin we have dubbed: ‘Shirley’s bungalow’. Shirley who is partially sighted ‘picks and packs’ the greeting cards ready for me to deliver and merchandise in the retail outlets we supply.

We started out supplying Card Connection’s greeting cards to just 80 retail stores. These days we work with 160 outlets! In 2013 Card Connection suggested we enter the BFA Micro-business franchise award and we won! It was amazing to be recognised for our effort and successes over the years.

What training and support did you receive initially and ongoing from your franchisor?

We received in-house training and then support ‘on the road’. Although we’ve been in the business for many years we still attend training to refresh the memory! For example, Card Connection organised a re-fresher training course at head office in Farnham, Surrey. The two day course covered key aspects of the business such as customer services, profit and loss, financial planning, route planning, targeting, stock management and an innovative presentation on five steps to a new business call which was really helpful.

Training will be one point that differs between buying a re-sale territory and a start-up. With a re-sale business, you will be learning how to take over an existing success story. There will be both class room and hands-on training and a full hand-over. You will spend time meeting the customers you will work with over the next few years and learn about their requirements.

On the other hand, with a new business, the focus will be more theoretical and need to centre on marketing and promotion to attract new sales.

What is a typical day for you as a franchisee?

A typical day starts out on the road at 7.30am and I visit around 8-12 stores on a call route. I’m back by mid-afternoon to re-load my van and complete any paperwork. Shirley helps at home by ‘picking and packing’ the greeting cards ready for the next day’s deliveries, which is an essential part of the job.

Has becoming a franchisee changed your life, if so how?

Being franchisees offers us the flexibility of self-employment with all the support of a leading franchisor right behind us. Franchising has enabled us to develop and run a successful business over a sustained period of time.

What is the most invaluable piece of advice you could give someone looking to buy their first franchise? And would you recommend a franchise resale?

Choosing a franchisor that has the success and growth of its franchisees’ business at the centre of its strategy is key. Look for an industry sector that you like and a business that has stood the test of time. Also, choose a franchisor that is a member of the British Franchise Association (BFA). Card Connection is a full member of the BFA so I know the company is bound to adhere to the best practices laid down in the BFA “Ethics to Franchising” guide which is really important. It means they have your best interests at heart.

What are your plans for the future?

Although the Card Connection franchise gives us the flexibility to spend time with our five grandchildren, we are looking forward to spending more time with them! After two decades we are retiring and aiming to pass on our established business legacy to another enthusiastic franchisee or couple!

Would you do it again?

Yes, absolutely!

 

Interested and want to know more about Card Connection?

The Card Connection basic profile outlines aspects of their franchise opportunity

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