Franchisor of the Year 2015: the finalists - Part Two

Expense Reduction Analysts (ERA)

In repositioning itself as a specialist procurement consultancy, ERA has focused extensively on working with its franchisees and using their feedback to propel business growth. In a highly inter-dependent network, collaboration is par for the course; one of the company’s biggest projects had 17 different franchisees working on it! Purposefully limited recruitment ensures the network’s balance remains strong while growing.

There is strong flexibility in how franchisees work – some sell, some complete the projects, some do both. Following substantial investment, a high-tech business system enables smooth joint working, in-depth reporting and provides open and transparent information throughout the network. But there’s a fun element to reinforce the message too, with regular activities and events to assist networking and support between 20-30 franchisees.
Franchisees are closely involved in the franchisor’s direction.

Represented on the ERA marketing committee and with the establishment of a seven-strong franchise advisory board (FAB), they’ve had direct input into business strategy. Particularly successful has been the development of a new business working group following franchisee feedback, which includes external motivators and sales trainers. Quarterly sales training days are offered free and cover multiple topics, the aim being bite-sized regular chunks of training that make a real difference.

ERA has affirmed its commitment to franchisee input by making the chair of the FAB a non-executive director of the business, illustrating the trust involved in this network.

It’s no surprise that the two parties work so closely together after franchisees enjoy access to substantial support and infrastructure upon joining. New franchisees enter the ERA Academy until they’re confidently self-sufficient, where they access regular networking events, dedicated field-based time with an Academy manager and tailored personal training.

All that to say nothing of the Integrated Marketing System which, in combination with new hires in the head office marketing team, has had a major impact on turnover and conversion rate.

ERA has a 10-year franchise agreement with an unusual clause: franchisees can simply give six months’ notice if they wish to walk away from the network. That’s a demonstration of the confidence that head office has in the ERA model, recruitment process – and franchisees.

TaxAssist Accountants

Breaking new ground has become par for the course for the 2010 winner of this award. The bond between the head office of TaxAssist Accountants and its network is rare, and led to the UK's first franchisee-assisted management buyout for a business of this size. Franchisees now own 39% of the franchisor business. “Who better?” offers Group CEO Karl Sandall.

That means there is absolutely full visibility of the business strategy and financial performance, the right to shareholder reports and the right to attend AGMs. Franchisees are represented on the board by the first one to sell their business for £1m, Mark Fordham. This is a partnership based on the deepest trust and transparency between the parties, demonstrated by exceptional results in franchisee satisfaction surveys by Smith & Henderson.

Franchisee masterclasses foster shared best practice across the network, while senior staff are also engaged directly by the franchisor at special forums to maximise recruitment and retainment of staff by franchisees. Training is high on the agenda: there are 100 different courses for franchisees and staff, with over 1,300 staff trained last year. A two-year diploma in management training for staff has been oversubscribed by two-times its capacity. The focus on staff has delivered outstanding results: two-thirds of reslaes have been to employees, of which there are now some 700 in the network.

The value in the TaxAssists brand to franchisees is tangible too; a comparison of a Kent resale with a similar-sized local independent practice showed more than a £120,000 difference in sale price.
It's no surprise to anyone familiar with the business that the FAMBO was achieved with absolutely no loss of focus on the bigger picture, itself no less impressive. The last year saw a move into bigger head office premises with enhanced staff and training facilities, along with a raft of new personnel to support the network.

A 15th consecutive year of growth saw client numbers grow by 12%, sales by 9%, the fee bank by 12% and the number of shops rise 7%. And new international markets are in development, with regional master franchisees already signed in Canada and Australia.

They've had a franchisee sign up from the 'Big Four' talent pool, unthinkable a few years ago. Even the annual conference broke its attendance record. The numbers continue to add up impressively for TaxAssist Accountants.

Little Kickers

Founded in London in 2002 by Christine and Frank Stanschus, pre-school sports business Little Kickers is now a thriving global network that has reached into 17 countries already with more on the horizon. It's a truly an international success story for UK franchising.

Christine and rank met at university, both going on to work in international business set-up and development; it's a background that has served them well. When they combined their professional expertise with an absolute passion for giving pre-school children easy access to fun, positive sports experiences, the result was a company with its founders' ethos embedded in its culture and the commercial nous to translate it into exponential growth.

The couple credit three core components at the heart of the business as critical to the success achieved so far. The first is the relationship between franchisor and franchisees; a very personal approach to the network ensures that Christine and Frank's ethos and drive flows throughout the business. Complete transparency in communications is a natural result of such a set-up – it's no surprise that every franchisee has the phone number of every member of the management team, including the CEO.

There's also an intranet, monthly webinars, and a special programme to encourage franchisee growth; those that completed six-months in it increased turnover by 35% on average. “We're a much stronger force if we're a strong network,” Christine says.
The second is an inclusive approach to strategy. Franchisees at the annual conference provide face-to-face input to the senior team, which is used as the basis of the annual strategic plan.

Social media has been embraced, with a marketing levy introduced for the first time to assist in social media campaigns; after a 6-month pilot revenues were up 20% year-on-year and cost-per-click through to the website had reduced sevenfold. Naturally, the levy was only introduced after franchisees voted on it.

The third component is innovation, enhanced considerably by the level of input from franchisees into the business. Master franchisees abroad suggested developing an English language programme to teach pre-schoolers the language through Little Kickers; it's now flourishing in four South American countries. Another example is provided by the brand's free app, Imogo (imagination on the go), encouraged by franchisees and delivered using motion-sensor technology to transport children into an imaginative world. Employees – most of them aged 18-25 – are offered opportunities abroad and reduced franchise fees if they start their own Little Kickers.

Proof further, if it were needed, that this is a business built on its culture comes with the fact that Little Kickers doesn’t advertise for franchisees – consistent enquiries from customers, coaches and friends of existing franchisees (all of them already familiar with that brand ethos) ensure they don't have to.

Water Babies

It's been a momentous year for Water Babies, described by co-founder Paul Thompson as “the greatest change in our 12-year story so far”. A complete refresh of business model, brand and customer offering has been undertaken in genuine strategic collaboration with franchisees.

A new group structure now has four separate arms: the UK network, which teaches 42,000 clients per week; Water Babies International, with the brand already launched in Canada, the Netherlands and New Zealand, Germany on track by the end of the year and further discussions ongoing; WaterBumps, a new pilot business and potential future franchise exclusively for expectant and new mothers; and a Water Babies 'university', the Doodle Training Academy.

The latter is described as an ambitious project to create a purpose-built centre with pools, training facilities, offices and accommodation providing aquatic-related professional qualifications as well as training for prospective franchisees. It's already well on the way, having achieved Approved Training Centre status in 2014.

A brand enhancement with extra marketing support for franchisees helped the business reach new customers, as did fundamental changes to the services on offer to them. A membership club and an updated swim programme were launched alongside a new adventure story given to customers, with commissioned illustrated stickers marking key milestones and encouraging repeat business.

The transformations were undertaken with the close involvement of a network of 64 franchise businesses across five countries. The senior management team undertook a series of roadshows around the network, meeting every franchisee and their support staff face to face to explain and discuss the changes. Feedback led to tweaks and adjustments before roll-out, with extra training and support then available.

Results have borne out the fruit of such a collaborative approach: customer numbers are up, average spend is up, customer retention is up – which means franchisee profitability is also up. Resale ROI is averaging 6:1 on initial investment and double-digit network turnover growth is forecast next year. There's also been an HSBC award for the global scalability potential of the business, ahead of 1,400 other entries.

Franchisees – not the franchisor – led on a network-wide collaborative project to document for the first time Water Babies' six core values. Typically, Thompson says that the strength of this 'in it together' culture is the biggest achievement of the year.
Further far-reaching plans are underway for the next stages of Water Babies development. This business will be looking to win awards for years to come as well as right now.