In 2012 O2 announced that it was to convert 82 company-owned stores to franchise outlets, and within coming months the franchise estate will grow in number from 121 to 203 – representing 43% of all O2 shops in the UK.
The increase has come about as a result of the impressive numbers generated by the franchised shops, with increased business performance due to the determination of franchisees to make a success of their business.
This combines with the more cost-effective growth often associated with the franchise model, as Mark Garrad, franchise marketing manager, explains: “The benefits to O2 include lower capital investment, less commitment to leases and lower staffing costs; at the same time, key performance indicators such as customer satisfaction, footfall conversion and post pay connections are all relatively higher than in company shops.
“O2 always had strong business reasons for setting up in franchising. Franchising provided an excellent format to expand O2 Direct, as opposed to competitor channels, whilst distribution extended into secondary locations and opened up our customer experience to a wider range of customers.
“Led by a dedicated franchise business management team, we have created a strong franchise community with our own powerful identity within O2.”
O2 opened its first franchise shop in 2005, when there were already some 400 company-owned shops in operation. Although existing franchisees will be given priority when it comes to taking on new stores – the largest in the network has 20 outlets! – the new expansion also creates franchise opportunities for newcomers to the brand for the first time in four years; areas of particular focus include Scotland, the west of England and south Wales.
The brand has created several unique stores in recent years, with franchisees offering accepted suggestions to differentiate their branch – including the provision of small business office space (Tottenham Court Road, London) and the inclusion of a cafe (Glasgow).