EE Franchise - Is It Really a Franchise?
Originally posted on 26/10/2018. Updated on 07/06/2019.
If you’ve spent any time on UK high streets, you’ll have noticed the rapid growth of a relatively new player in the mobile telecoms industry. With its distinctive branding, well-advertised offers on the latest mobile phones and national TV campaigns, EE has worked to establish itself as the country’s top mobile provider.
In part, this rapid growth has been facilitated by the franchising model. However, the vast majority of EE stores are still owned by the business itself. Here, we take an in-depth look at the company and attempt to establish whether it should be considered a franchise or not.
What is EE?
EE – formerly known as Everything Everywhere – is a UK-based mobile network operator and internet service provider. The business was founded in 2010 and acquired by BT in 2016, and is now one of the country's most popular mobile networks. It also boasts extensive network coverage, with its 4G and 2G networks reaching approximately 99 percent of the UK population. EE has a historical association with Orange and T-Mobile and has continued to stock their products in EE stores.
EE operates roughly 700 retail stores around the UK and intends to develop an extensive network of brick and mortar locations so that 95 percent of the UK population is within a 20-minute drive of a store. The business has also pursued a "white-spot" expansion policy, focussing on areas that previously had little or no access to its products.
EE? Orange? T-Mobile?
The EE brand emerged from a joint venture between Deutsche Telekom and France Télécom. These companies merged the UK arms of their Orange and T-Mobile operations. This meant that it held a strong position in the UK market and became the biggest 4G provider in Europe. In the UK domestic market, it boasts approximately 30 million customers and has established a widespread presence on the high street.
The business' origins mean that EE can stock a wide selection of goods under different brand names, so in-store, EE retails EE, Orange and T-Mobile products.
Is EE a franchise?
Although the vast majority of EE stores are managed by those within the company's internal hierarchy, it has opened several franchise stores. Currently, there are more than 100 of these in the UK. The business has favoured a multi-unit approach, encouraging its franchisees to open, own and manage several units. Therefore, the entire network of franchised stores is owned by just 25 franchisees.
The company's large marketing budget and great brand reach make it an enticing prospect for many would-be franchisees. Although the vast majority of EE stores are managed ‘in-house’, the company offers an extensive and comprehensive franchise package that helps franchisees build their business(es) as quickly and healthily as possible.
EE Franchise For Sale
At this moment in time, EE isn't taking on any new franchisees – primarily due to the remarkable success of their franchise recruitment programme. Despite this, the business has assured interested individuals that franchising plays a significant role in its future plans for expansion.
The company's merger with BT in 2016 resulted in considerable delays to franchise rollout, as the business paused intake to assess whether franchising was still a suitable way to achieve growth. Although there were doubts as to whether the franchise programme would ever re-open, EE has been unequivocal in their support of future franchising. In 2017, they were quoted as saying: “Franchise remains a key part of our strategy... We have temporarily paused the expansion of new franchise stores while we’re planning for the next year and beyond, but we are planning to reopen our programme.”
EE Franchise Stores
EE typically has a great deal of input when it comes to franchise store locations. This means that they often scout locations and offer them to franchisees, rather than allowing franchisees to dictate the locations themselves. In the past, EE has also prioritised multi-unit ownership over finding new franchisees. Consequently, prospective franchisees will have to make a good impression if they're to be granted the licence.
When EE re-open their franchise programme, prospective franchisees will need to be well prepared and capable of completing a high-quality application. Due to demand, it’s likely that you’ll only get one shot at EE franchise ownership, so it’s imperative that you meet the necessary standards and paint a positive picture of yourself.
EE Franchise Cost
As the franchise programme is currently closed, there are no accurate investment figures for an EE franchise. However, due to the size of the parent company, prospective franchisees should expect considerable financial support when establishing their business. Most major banks will be willing to lend to a franchisee based on the fact that EE is a reputable business with a great deal of industry experience and financial stability.
The brand reach that EE have managed to develop over the years means that franchisees pay a premium for the right to own a store. However, the high price tag should be justified by the excellent support on offer for franchisees and the possibility of growing the franchise beyond a single store.
Existing EE Franchises
Though many of EE's current franchisees are individuals who have worked hard to establish their franchise business, the company's franchisees also include management groups. For example, Chrome PSG operates nine stores in the north-east of England. Founded in 2014, the retail management group aims to provide a specialised sales and management platform for businesses in the retail sector. This has allowed them to become one of EE's key franchising partners and are a great example of just how effective the franchising model can be.
Alternative Franchising Opportunities
BT Local Business
If you are determined to start a business in the telecommunications sector, you could form an alliance with BT Local Business. As a division of BT, this company provides mobile, landline, broadband and IT services to customers across the world. It has been in operation since 2002 and, today, there are 37 UK offices, each staffed by over 20 employees, serving the business’ pool of customers and maintaining the brand’s positive reputation. As a result, BT Local Business is an industry leader and household name among most consumers.
With a licence to franchise from BT Local World, you can sell the company’s products and services in your local territory. Because of the business’ standing, you will need to be prepared to invest a hefty sum in order to represent the BT brand. Therefore, expect to make a minimum investment of £150,000 and a total investment of £300,000. Although this may seem like a lot of money, it will guarantee you access to the business’ proven business model and brand awareness, as well as the potential to generate a rapid return on investment. In fact, BT suggests that after just two years, franchisees could be seeing a turnover of over £1 million. What’s more, franchisees benefit from uncapped commissions and earnings up to £250,000 from annual incentive programmes.
This, of course, relies on the franchisee following the business’ operational strategies and adhering to its values, as set out in the franchise agreement. Although the franchisee is expected to have previous experience in the communications sector, of owning and managing a business, and of B2B sales, BT Local Business does not leave franchisees to struggle during their first steps with the business. New recruits to the business will undertake a comprehensive training programme and receive ongoing support from the franchisor, not only for themselves but for their business team too.
If you have a slightly smaller budget or less experience, Pink Connect could be for you. You don’t need any specific industry knowledge or experience to become a Pink Connect franchisee; all you will need for this opportunity is the motivation and commitment to cultivate a large customer base. Pink Connect is a business communications, IT and digital security company that provides technological solutions for more than 2,000 small and medium-size businesses and organisations across the UK. It has 17 years of industry experience and 10 years of franchising experience.
Because of the specific knowledge needed to manage a Pink Connect franchise and provide industry-leading advice to customers, franchisees must complete a training programme before they can open for business. This programme includes a three-day services and products course that covers mobile data, internet connectivity, cybersecurity, commercial Wi-Fi, business networks and General Data Protection Regulation (GDPR). Following this, franchisees are also enrolled onto a one-day business strategy and planning course, a one-day telephone masterclass and additional supplier training days at individual supplier locations. On top of this, franchisees must also attend monthly, in-house sales workshops to maintain familiarity with new products and sales initiatives.
Also included in the Pink Connect franchise package is the business’ blueprint to success, Pink Connect accreditation, an exclusive territory, a laptop, business cards, two exhibition stands, social media management and monthly one-day growth workshops. To find out more, click here.
Alice Tuffery, Point Franchise ©
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