When Ableworld opened its first franchise 10 years ago, some questioned whether the mobility equipment sector could really sustain a model better known for elevating fast food brands and convenience stores. But with its 33rd mobility superstore about to open, and an IPO in the pipeline, any doubts that might have existed have been well and truly extinguished. AMP catches up with founder and managing director, Mike Williams (main picture), and franchise director Paul Boniface, and discovered that when it comes to their ambitions for growing the market, they’ve barely scratched the surface.
This is Ableworld’s 16th year in business. You must have seen some monumental changes in that time…
MW: When we started, the product on offer for customers was very limited, very expensive and very boring. Take a mobility scooter. There was a very heavy mobility scooter, which wasn’t practical and it was selling for around £1,200, and that was the cheapest on the market. Now there is a huge range of mobility scooters, some selling from £495, in many different colours, and much lighter as well. That is just one example, but it’s applicable to many other areas, be it grab bars or packaging.
Did you always have plans to become a multi-site retailer when you founded the business?
MW: Yes. I had come from previous multi-site operations with B&Q and Focus DIY, and that was the idea. I saw an opening in this market place. Seven years later we launched the first franchise, in Birkenhead. It was our pilot franchise and it gave us the confidence that there was a market out there for franchises.
You’ve got 32 stores now. How many of those are franchises?
PB: It’s roughly half and half. The franchises have grown dramatically for us. We have learnt a lot along the way — not everything is plain sailing in any business so we have made mistakes but we have got through them. Our 33rd store will open in July, in Bournemouth, as a franchise. If you look at our five-year plan, we are predicting a two-thirds, one-third company in favour of franchises.
What are the merits of the two business models?
MW: The merits of our own stores are naturally that we have complete ownership of them and all the profits come to us. With the franchises, other people fund them so the set-up costs are cheaper for us and the management is cheaper for us. We have franchises from Inverness to Southampton. To manage those from here would be difficult if there was a problem or somebody was off sick, for example.
Do you have franchisees that operate more than one store?
PB: Yes, we have ones that have opened two — in the North West, Cardiff, the Lincoln and Newark area. And in fact, going forward, we would like to engage with people who have the ambition to open more than one franchise. That is quite a common theme in the world of franchise. It is all very well having one fast food outlet, but the way you really make money is by having two or three. The same will happen in our industry.
Do most of your franchisees have a background in mobility equipment?
PB: No. It is a reasonably young industry, so we look for transferable skills. One of our franchisees is an ex-teacher and another of our most successful franchisees used to be a milkman. Personality, skill set and an ability to relate to our core customers are important.
Do franchisees have autonomy in the equipment they stock and how they present it?
PB: No. We do the McDonald’s route. If you went into a McDonald’s you’d expect to get the same hamburger in every place. If you go into one of our stores you’d expect to see the same range as well, so that’s how it works.
There is nobody else in the mobility equipment retail channel that operates a franchise model on such a scale. How do you think the industry views you?
MW: I don’t think we are anybody’s favourite. We have come in, we have expanded, we are the largest and we are quite aggressive on prices. If you look at the DIY industry, which I suppose was my main background, the bigger stores came in and the small paint and wallpaper shops, and the small hardware shops, left the industry. The same happened in the pet industry. I suppose that’s one of the reasons I came into this industry. You will always have the specialist people, though. In our industry, especially, there are some that really detail on the specialist side of things and do an excellent job.
Do you have a preference for the type of location that suits your retail model?
MW: Secondary sites with ample parking. The big retail parks would be too expensive. A lot of this industry is on industrial estates and the back streets; we try and avoid those. If you can get on a road to the big Tesco or Asda, and get a 3,000 square foot site just out of town, you pay a lower rent. We have had a couple of high street locations in the past but they are not something we are going forward with.
What is the market like for property at the moment? Can you normally get hold of the locations you want?
MW: It is difficult in some areas. There is competition for sites, people want showrooms, you’ve got things like little gyms cropping up, but on the other hand there are people going out of business, like Blockbuster or whatever else. It is a revolving door.
Because of the ethics of our business, we won’t sell a scooter or a power chair online. We want to be able to assess all our customers to make sure they can cope with the product”
If you look at prominent retailers, it’s often their ability to streamline and consolidate that is as important to success as their desire to expand. Have you had to review any sites?
MW: We relocated one store. We had a store in Flint, but most of our customers were coming from either Rhyl or Llandudno, with very few from Flint. So we closed Flint down and moved to Llandudno. For Rhyl customers it was the same distance to go to Llandudno as it was to Flint. So we will always review things but luckily, and touch wood, the stores we opened have performed well. We will look to relocate. We used to have a small store in Crewe in a high street location, but the year before last we moved just out of town to a bigger store with more car parking. That has been very successful.
What’s your view on London?
PB: London has got the population and the needs. I think the challenge for London will always be the property and the cost — identifying the right-sized property in a very densely populated area. I think what will happen, and it almost happened last year, is we will open stores on the periphery and gradually, as the business gets better known, we will move closer towards the centre.
MW: I would agree. Because of the cost we might even do some sort of joint venture down there as an experiment before doing it ourselves.
I’ve heard that prices have increased since the EU referendum, with suppliers passing on costs to the retail channel. Has that been difficult for the market to swallow?
MW: It has been challenging for the market to swallow. Luckily we have got great foundations so we have taken it on board and moved forward. I think some of the smaller operators have had immense problems on it and are having immense problems on it.
Presumably with more than 30 stores you benefit from some significant economies of scale when it comes to supplier agreements?
MW: Yes, very much so. We can buy bigger. It’s the old B&Q statement: we buy bigger so you buy better.
PB: We have also got the resources to have a head office, so that means we have in-house experts in marketing, buying, finance, engineering — in all of the aspects that we need which our franchisees can leverage off and which our own stores can also take advantage of. But if you’re a one or two store operator, you would have to buy product in at a greater expense.
How much does online account for your business now?
MW: It’s very small. It is more of a shop window for us. We do a fair bit of click and collect from people that see our website and go into our stores. Because of the ethics of our business, we won’t sell a scooter or a power chair online. We want to be able to assess all our customers to make sure they can cope with the product, for their own safety and for everybody else’s safety.
PB: It is also true to say that we won’t sell beyond 30 miles of our store radius because we feel we ought to be able to support customers in terms of servicing. If we were to sell something 300 miles away on the internet, it would be very difficult for the customer to bring it back to us for servicing. The smaller stuff, such as everyday support aids, we do sell on the internet.
Are mobility suppliers looking for retailers to do more online?
MW: I don’t think the route matters. Naturally they want business and they will come to retailers like us, bricks and mortar, or they will go to the internet people. I think the internet gives them problems on pricing policies.
In the last year we have seriously put things in place operationally so that hopefully we’ll float within two years”
How many different products do you retail?
MW: About 1,200 products. It grows, we change product all the time and we look at the market place. That 1,200 is what we stock in our bigger stores. On top of that we have got access to thousands more products through our supplier base if a customer wants a particular product.
Are there any areas that you are looking to expand into that you don’t cover already?
MW: Maybe more of the electronic side, things like telecare, bed sensors and accessories that allow you to remotely check up on an elderly relative. There is more of that kind of product coming into the market and it is becoming more retail-focused. I think it has always been there, but more with care homes and that sort of thing.
You’ve previously spoken about your ambitions to float the company on the stock exchange. Is that still the plan?
PB: Very much so. We are a member of something called the Elite Programme, which is an initiative by the London Stock Exchange to get together fast growing companies with a view to giving them information about floating, probably on the secondary market, the AIM market, or accessing funds in other directions. So it is partly an educational programme and partly an introduction programme, with the aim being to get us ready to float.
What sort of timeframe are you putting on it?
MW: Life is always about timing, but in the last year we have seriously put things in place operationally so that hopefully we’ll float within two years.
Would a flotation signal your exit from the company, Mike?
MW: No, it certainly wouldn’t signal my exit. I will exit when I am incapable of coming into work or I drop dead! I love the business. I am not looking to exit. I don’t play golf, I don’t want to cruise round the world. My hobby is the business. And from my point of view the funding will go into the business.
With future capital investment in mind then, how many stores do you think you could get to in future? Is there an upper limit?
PB: I am looking in the medium term at 60 to 70 because I think together with our internet presence that gives us more of a nationwide presence. In terms of the franchise opportunities, we have had that professionally looked at and there are about 185 ‘territories’ within the mainland UK. We have got 30 already so there are 150 opportunities left. Those opportunities are generous in that you could open more than one store within that territory so there is plenty of scope for growth. If you want to paint a picture of what it might look like, we would imagine one of these stores — we call them ‘mobility superstores’ — outside of every major town and sometimes the ‘smaller major’ towns if you can put it like that.
What experience does a potential franchisee need?
Ideal franchise owners are people who have the desire, energy and determination to build their own ethically-based business in the mobility sector, according to Ableworld. They’ll have an enthusiastic customer service mentality and want to make a difference to people’s lives through providing quality products.
What will a franchisee’s job entail?
An Ableworld franchise consists of a retail outlet and a stairlift business. For the retail side you can think of the job as similar to a specialist retail manager, which involves building trusted relationships and giving high levels of customer service. On the stairlift side of the business franchisees will need to be able to quote, install and repair the equipment.
How much does a franchise package cost?
A full Ableworld franchise fee is £29,950 for which partners get the two businesses, exclusive use of the Ableworld brand within a protected area, full support, including training, property, marketing and finance advice, and access to Ableworld products, systems and head office.
What is the minimum investment required?
A franchise can be started with as little as £70,000 for a medium-sized retail outlet and stairlift franchise. Its franchise proposition has been approved by all the main high street banks who specialise in franchise lending and finance (subject to status) can be arranged for up to 60% of the total investment. That means franchisees can start a full Ableworld franchise with as little as £30,000 funds of their own.