Is buying a franchise or symbol store a sensible idea?

For retailers who are unaffiliated and independent, buying a symbol or franchised store could mean huge advantages. You are acquiring a business already proven to work on every level, from branding to pricing and marketing, but how do you know whether it is a sensible idea?

What is a ‘symbol’ or ‘franchise’ store?

In convenience retail, the term ‘symbol’ refers to groups of retailers that are trading under symbol branding and benefit from membership of these organisations. Recognisable symbol groups include names such as Nisa, Spar and Booker.

Purchasing a franchise store typically offers you less autonomy around operational or business decisions. Franchise stores are expected to operate against a specific set of standards and hit a certain level of compliance against these targets. Usually there is an amount of investment given to the store e.g. for new equipment or technology.

According to the Association of Convenience Stores (ACS), it is a growing market too. In 2019 the symbol convenience market share, including franchise stores, accounted for 37.6% of total sale value vs. unaffiliated independents at 16.6%. For more on these figures, please read the ACS Local Shop Report.

Talk to other symbol or franchise group retailers

ACS reports that 31% of convenience store ownership is by symbol group independents, including franchises. Finding local retailers that can advise you on the practicalities of running a franchised or symbol store will provide you with valuable insight when making your decision.

Asking questions around their experiences, such as why they decided to run a symbol or franchise and how membership has influenced or changed the way that they run their business, will also greatly help you to make an evaluation.

Do a cost/benefit analysis

Going back to basics and writing a list of the pros and cons is a simple way of reviewing your options. Compile the benefits of being part of a symbol or franchise first such as established brand, buying power, investment, merchandise, access to trade advertising and staff training programmes.

Then list the potential cons such as the costs and liabilities of being part of a symbol or franchise i.e. membership fees, products you’re required to buy, compulsory promotions or mark-ups on merchandise. 

Look at services offered

Both symbol and franchise convenience stores offer a positive impact on the local area, so being able to offer the right range of services for your customers is also important when buying a store.

HIM provides a voice for shoppers and conducts research across the convenience sector, which has shown that top product categories for franchise shoppers are newspapers and magazines, chilled foods and soft drinks. These shoppers also over index on confectionery, alcohol and lottery compared to the average convenience shopper.

Does the franchise or symbol group you are buying into provide a good range of options on products, promotions and merchandise? Do you get additional support when making product range decisions? How much freedom do you get when choosing suppliers? These are all things to consider when deciding if buying a symbol or franchise store is a sensible idea for you and your business.

Whatever type of store you choose to open, we can help you to drive footfall, save time and gain valuable sales insights. Browse our services.

Source: HIM and MCA Ltd 2019. CTP 2019.

Source: The ACS Local Shop Report 2019.