Franchisor Case Studies

Client name: French Connection (Fashion retailer)

Context:

French Connection is a UK-based global retailer and wholesaler of fashion clothing, accessories and homeware. Founded in the early 1970s by Stephen Marks, who remains chief executive, it is based in London and its parent French Connection Group PLC is listed on the London Stock Exchange.

French Connection set out to create well-designed fashionable clothing that appealed to a broad market.

French Connection now offers a fashion-forward clothing range with a quirky spin on design, priding itself on quality and affordable prices.

Driven by innovation and change, the brands strength lies in quality and affordability, established when the company was founded. Throughout this expansion and diversification the principles have remained the same; design-led products presented in a unique and innovative way.

Actions:

We were engaged at FCUK’s franchise modelling stage to prepare a UK franchise agreement which was used to roll out FCUK’s domestic franchise expansion.We then adapted the agreement for granting single units for FCUK’s overseas expansion and advised on the details of issuing, negotiation and liaising with local lawyers where necessary in the target countries.

Outcomes:

  • FCUK now supplies retailers in over 50 countries
  • FCUK brand portfolio now includes three new and highly targeted brands
  • FCUK has developed and launched eCommerce platforms in its major trading areas
  • FCUK has three manufacturing centres – China, India and Turkey.

Client name: CeX (Technology retailer)

Context: 

Founded in 1992, Complete entertainment eXchange (CeX) has rapidly expanded to become one of the UK’s largest second-hand retail franchises, this year smashing its goal of opening 100 stores since the launch of its first franchised store in 2004.
The CeX business model allows customers to buy, sell and exchange a focused yet complementary range of products including mobile phones, video games, DVDs, Blu-ray, computers, digital electronics and CDs. Uniquely all goods are second-hand, tested in store and sold with a 12-month warranty.

New franchise owners receive hands-on experience in a CeX store and extensive training. Support is ongoing with a dedicated Franchise Manager just a phone call away and specialists from the CeX support centre available to provide advice on areas including product testing, loss prevention, IT and marketing.

Actions:

In 2003, CeX selected franchising as a model to maximise store openings and to complement its company owned stores.We advised on the very first franchise including the structure, pre-contractual documentation and franchisee controls, and have been involved continuously in all aspects of CeX’s franchising programme ever since.This includes dispute resolution and formulating the original store resale programme; and we have supervised all of the CeX resales ever since. We have also advised on overseas development structures and engaged with local lawyers throughout.

Outcomes:

  • In 1998, CeX opened stores in Watford, Hounslow, Bromley, Kingston and Leeds
  • The first franchised CeX store was opened in 2004, in Croydon
  • Today CeX has 352 stores in the UK and is growing internationally at a very fast pace.

Client name: Tax Assist (Taxation Advisers to SMEs)

TaxAssist Accountants

Context:

TaxAssist Accountants was founded in 1995 by accountant John Westgarth and based on a concept that was, and still is, fundamentally simple: to bring first class professional accounting services to the small business owner.

Since recruiting their first franchisee in 1996, the business philosophy has naturally evolved with a large percentage of their network now operating from shopfront premises. The strategy is to continue to recruit new franchisees who share in the vision, and to facilitate the move of remaining franchisees into similar shop-style premises.

The intention, through the growth of the brand across the country, is to further establish Tax Assist as the “natural choice” for small businesses.

Actions:

We were engaged by the original owner of TaxAssist to advise on all aspects of their franchise programme and have remained their advisers ever since.Work has included guiding them through the legal aspects of changing their model, dispute resolution, a resale programme, and granting of overseas franchises in Canada, Ireland and Australia.We also advised on their Franchisee Assisted Management Buyout in 2014 which we believe was the first such MBO in the franchise sector in the UK.

Outcomes:

 

2016:

  • Smith & Henderson awards TaxAssist with ‘5 star franchisee satisfaction’ for the fourth year in a row
  • TaxAssist moves up three places to 21st in the Accountancy Age Top 50 survey
  • Launch of first Australian TaxAssist Accountants shop
  • UK network reaches 60,000 clients and a combined fee bank of £40 million.

2015:

  • TaxAssist Accountants wins the 2015 Bronze Award for bfa Franchisor of the Year
  • TaxAssist moves up one place to 24th in the Accountancy Age Top 50 survey
  • Smith & Henderson awards TaxAssist with ‘Best Franchise’ in our category
  • Awarded with ‘5 star franchisee satisfaction’ for the third year in a row
  • The milestone figure of 200 franchises in the network is reached.

2014:

  • In the Accountancy Age Top 50 listings, TaxAssist Accountants beats the “Big 4” international groups achieving the fifth highest growth across the whole Top 50
  • The Network has a record start to 2014 when for the first time, a Franchisee exceeds £100,000 sales in one month
  • TaxAssist Accountants are up to 25th in the Annual Accountancy Age Top 50 survey
  • Franchisee Assisted Management Buyout. John Westgarth retires as Chairman and Director after TaxAssist Accountants completes an MBO. This sees the business 32% owned by franchisees, 53% by the senior management team and 15% by long-standing external business partners. This is the UK’s first ever franchisee-assisted management buyout
  • UK network client total reaches 50,000.

2013:

  • TaxAssist Accountants voted winner of “The Accountancy Firm of The Year” award by the members of the Association of International Accountants (AIA) beating global groups and industry giants.

2012:

  • A franchisee’s business becomes the first franchisee in the history of the network to exceed the £1,000,000 fee bank milestone
  • TaxAssist Accountants wins “Best Large Franchisor
  • A TaxAssist Accountants franchise is sold for £1m.