Former franchisees rebuild family ties after independence
Monday, October 1, 2018
Kall Kwik and Prontaprint used to be two of the biggest names in the UK high-street print market. At their peak, the two businesses ran a combined total of around 550 outlets in towns up and down the UK.
But after a turbulent spell, venture capitalist owner On Demand Communications (ODC) fell into administration at the end of 2011, amid legal challenges from franchisees dismayed at a lack of support and investment. Many subsequently chose to break away from the parent following the settlement.
Kall Kwik now has 43 branches – a mix of franchisees and licensees – and has been under the steady control of Nigel Toplis, its former boss who returned to acquire the brand after the fall of ODC. His leadership has ushered in a period of stability, welcomed by members who had seen five years of uncertainty and neglect.
“I returned to find people disappointed and frustrated – losing that much of your franchise business must involve some sort of mismanagement,” he recalls. “The first thing I did was work to restore that feeling of enjoyment and family that appeals to franchisees – it was important to go back to basics for this new chapter.
“We have modernised by bringing in web-to-print, a new website and fresh marketing material. The brand is still supremely strong and highly recognised throughout the community. Our franchisees continue to communicate with each other and their clients.
“Now we are celebrating our 40th anniversary – after all this time we are still here, and the important thing is bringing new blood into the business. Our focus now is on resells rather than expansions to consolidate what we already have.”
One model resale Toplis highlights is the acquisition of Kall Kwik Farnham by former Apogee sales account manager Bill Clayton, who took on the business in August after working alongside former owner Colin March for 12 years. He is committed to building on Farnham’s foundations by boosting the branch’s sales presence.
“I will be canvassing with existing clients and my connections in the industry to make people more aware of what we do,” he says. “We are a one-stop shop, so I would like to increase the number of clients we have based on what we can do.
“The benefit of being part of Kall Kwik is the collective knowledge we share within the group. We are able to support other outlets and they can help us which is a major benefit ¬ plus we have the power of the name, which has been on the high street for a long time.”
Collaboration and communication come up repeatedly when asking franchisees – current and former – what draws them to the parent brands: to be part of a network, to share knowledge and to help your compatriots to grow.
When a number of franchisees chose to step away in the fallout of 2011, it was something they feared they might have to sacrifice as the cost for independence.
Piers Martin runs Origin, formerly Kall Kwik Swindon, and remembers feeling “trapped” by an inability to scale up within the franchise model.
“Few franchisees grow beyond the £1m mark generally,” he says. “Thinking back 30 years ago, there were sufficient margins to cope with the strain of turnover-based franchises, but as margins have narrowed the franchise model is a luxury many printers can no longer afford, and it has stifled growth.”
But Martin isn’t planning to build a huge empire. He takes pride in his work as a consultative high-street business valued by his customers in the local community.
He attributes Origin’s independent success to the emergence of the UK Design & Print Network (UKDPN), which sprang up as ex-franchisees sought to stay in touch as they struck out alone; it now provides a vital forum and biennial conferences to swap ideas and advice for 65 former Kall Kwik and Prontaprint outlets.
“We have effectively replaced the franchise network with the UKDPN, which made the transition to independence much easier,” Martin says.
“We now have a modern means of communication and the information is not filtered, it is straight from the horse’s mouth. It works because we are all small print shops geographically dispersed, so we are not competing and can help each other.”
The UKDPN has flourished alongside its members over the years, with a community of members happy to help each other out and support each other towards further success. Its forum is buzzing with activity seven days a week, with enquiries on how to source anything from tombola ticket printing to large-format suppliers.
Membership secretary Paul Stokes, who was made redundant from ODC in 2011 and previously ran his own Prontaprint outlet, says: “There is a wealth of knowledge among our members and the forums are a great well of chat and gossip from our industry. People help each other by suggesting the best deals you can get on kit and consumables.
“We have held six conferences since we started and are now talking to the IPIA about running an event in conjunction. Our previous events have had exhibitors such as Premier Paper, EFI, Xerox, Canon and Konica Minolta.
“The key thing I think the UKDPN has provided to our members, though, is strength. Since it was established, though some members have retired or sold on their businesses, not a single one has gone bust. In a business like ours that is quite a statement to make and I think it shows what a network of independent, small businesses can achieve.”
Franchises can provide a helping hand when needed
Pip Wilkins, chief executive, British Franchise Association (BFA)
More people are going into small business, with a record of 5.7 million businesses registered in the UK in 2017. However, with each new company, there tends to be a closure – the number of UK businesses failing increased from 283,000 to 328,000 between 2015 and 2016.
Franchising is an attractive idea for those who want to own their own business but are afraid of the risks – around 90% of franchisees are profitable, according to the 2015 BFA NatWest survey, while the failure rate is less than 5% over five years. This is extremely favourable compared to non-franchised small businesses, where failure is as high as 91% in the first year.
This is because franchises are tried and tested business models that have gone through trial and error to produce a successful, recognised system. Prospective franchisees can buy the rights to this model which entitle them to own and operate their franchise.
Entering this contract will not only buy you the rights to the name and system, but continuous support and training. This is essential for new business owners who need that vital experience from the franchisor. Having the option of asking for help is a very comforting notion and will reduce stress for new firms.
But like any business, your heart and head have to be 100% in it. Just because you are working under a recognised brand doesn’t guarantee success. Ambition, hard work and passion are what franchisors look for when choosing a franchisee, as they want to make sure their business name is in the hands of people who care about succeeding.
Also, make sure you take all due diligence of a franchise to make sure what they are telling you is accurate. See if they are a member of the BFA. If they are, they adhere to a standards-based, ethical programme, which provides extra peace of mind for franchisees.
How was the experience of becoming independent?
Nicky Peebles, director, Talk Design & Print
“When we joined Kall Kwik in 2004, we bought the Winchester and Newbury branches. We chose to leave the franchise in 2011. It had been taken over by venture capitalists who were not putting in any investment. Financially, independence has helped as we were paying 10% over to Kall Kwik. The key benefit we lost was the business development team that would give us helpful advice when we started out. However, the UKDPN forum provides that in a way now and our current ambition is to grow – we just acquired another company, Zest, to help with that.”
Henry Luce, managing director, Stormpress
“One big asset when you join a franchise is that you are joining an established brand. We got going with Kall Kwik in 1980, but by 2011 we wanted to develop our brand in ways outside of the brand’s remit – foiling, embossing and high-visibility print effects. It was very liberating to move away from the brand and to control our own destiny. We also built our own online pricing system, which is very doable as an individual company – but one Kall Kwik branch out of 140 cannot advertise its own pricing system in case it is competing with another branch.”
Adam Brenner, former managing director, Newcastle Print Solutions
“When we left Prontaprint in 2011, it was a very tumultuous time. We had just come to the end of a significant legal battle. Following that, we wanted to go out on our own and specialise rather than be a general print shop. We moved away from our high-street premises – then you have the space to move in all kinds of bigger kit and become whatever you want. We took the money we were paying to Prontaprint and used it to buy new equipment and move into a different marketplace as we could control our own brand and marketing.”