Specsavers Franchise - Is it a Franchise Business?
Specsavers are one of the UK’s most recognisable brands and a popular high street retailer. Though it has only existed for a relatively short period of time, the business has grown at a remarkable rate. A simple explanation would be that this rapid growth can be attributed to the franchise model. However, things might not be that simple. Here, we take a look at whether Specsavers is a franchise.
Who are Specsavers?
Specsavers is a UK-based retailer that specialises in the provision of optical services and the sale of glasses, sunglasses, and contact lenses. It also stocks other goods, including hearing aids. Founded by husband and wife Doug and Mary Perkins in 1984, the company now boasts more than 1,400 stores and employees more than 30,000 members of staff.
Renowned for their popular TV advertisements and their widespread presence on the British high street, Specsavers has become something of a national institution. Co-founder Mary Perkins was made a Dame Commander of the order of the British Empire in 2007 and, according to the Sunday Times Rich List, recently became the UK’s first self-made, female billionaire.
A little industry context
The optician industry generates approximately £4.2 billion in revenue every year and consists of roughly 4,480 business. Beyond big brands, such as Specsavers, supermarkets are also having a substantial impact on the market, driving down prices with their ability to market special offers. This “two-for-one” culture has become ubiquitous on the high street and has resulted in smaller, independent businesses struggling to sustain themselves.
Specsavers commands a 42% market share, making it the largest optician in the country. It generates an annual turnover of around £1.5 billion and maintains branches in international markets, including Ireland, Norway, Sweden, the Netherlands, and Spain.
Is Specsavers a franchise?
While it shares many of the characteristics of a franchised business, Specsavers is not technically a franchise. Instead, it has adopted an organisational structure that is typically referred to as “joint venture partnership” or a “shared venture partnership.” In many ways, this resembles a franchise agreement, though there are some important distinctions to be made between the two types of organisation.
What is a joint venture partnership?
A joint venture partnership (JVP) is an agreement between two parties to work together and share the costs, profits, risks, and rewards associated with a particular business venture. A joint venture is primarily used to facilitate rapid growth, which is why it's particularly suited to Specsavers' business model. Typically, it functions by taking two partners with different skillsets and uniting them in a mutually beneficial relationship.
In reality, this means that individuals make an initial investment to become a partner and are rewarded with training, resources, and guidance from the Specsavers’ JVP team. The partners retain a share of their own business, as do Specsavers. The partnership model involves two individuals coming together to run a business. In most cases, this will be a trained optometrist and a retail manager.
How does this differ from a franchise?
Though there are many similarities between a franchise and a joint venture partnership, the JVP differs by allowing the business owners much greater freedom. While franchisees are expected to follow the franchisor's business plan to the word, Specsavers' partners have more say over how they manage each branch. This allows them to respond to customer demand in that area with greater ease and to adapt their business plans to the market forces particular to their surroundings.
A Specsavers JVP also differs due to the way in which they don't charge an ongoing royalty fee. Instead, Specsavers own shares in each of the businesses licensed to operate under their name and brand image. The only exceptions to this arrangement are Specsavers businesses in Sweden, Norway, and Spain, where a traditional franchise agreement has been utilised to structure the company.
What are the advantages and disadvantages of a joint venture partnership?
Much like franchises, JVPs are advantageous because they connect individuals with local expertise and business experience to companies who have the financial resources to make their business dreams a reality. They also benefit individuals by offering access to valuable learning resources.
On the other hand, joint ventures can suffer from imbalances in working relationships or a clash of personalities. While the chance of this occurring can be minimised using an intelligent recruitment process, it can’t be eradicated. Finally, some JVPs fail due to a lack of communication or an unreliable partner.
How do I join Specsavers?
If you’re considering joining Specsavers as a partner, you’ll need to register your interest with Specsavers and their Partner Recruitment team will get in touch and begin the recruitment process. If you’ve worked at Specsavers before or are optically trained, you may be eligible for their Pathway programme – a forward-thinking development programme that is touted as one of the best training and preparation programmes in the industry.
The application process will likely begin with a telephone interview and individuals will be assessed on their suitability and qualifications. With Specsavers, you can work towards one of four speciality partnership roles. These are;
• Optical partner
• Retail partner
• Domiciliary partner
• Hearcare partner
Each position poses different challenges and involves mastering a diverse array of skills. However, all partners will have to work together if the system is to operate in the way it was designed to.
What is in store for the future?
The Specsavers franchise shows no sign of slowing down and are still recruiting for their JVP programme. Currently, the industry is experiencing an annual growth rate of around 1.8%. This puts Specsavers in a comfortable position, as they can expect to benefit from much of this growth. The business’ recent move into the hearing aid business is also likely to be highly profitable.
The UK’s shifting demographics favour businesses that target their products at older consumers. With an ageing population that will see the number of over-65s exceed the number of under-15s by 2024, Specsavers can expect demand for their goods and services to grow considerably.
The Editorial Team, Point Franchise ©
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