North Yorkshire’s Hot Box Stoves is on the hunt for talented franchisees to help it spread its range of luxury stoves across the UK
Wage growth may have slowed but well-heeled individuals will always have a taste for luxury items. This is especially true in the UK, which is set to become the largest luxury goods market in Europe by 2018, by which time the continent’s market will have grown to £96bn. It would seem there is no better time to get a piece of the action, which is exactly what Hot Box Stoves is doing. The North Yorkshire firm specialises in the supply and installation of high quality wood burning and multi-fuel stoves. It installs around 160 stoves each year for a pretty penny, both for domestic and commercial customers across the Yorkshire region. It is now in search of new franchisees to help it expand its business throughout the UK.
Demand for wood burning and multi-fuel stoves is increasing, largely because of the cost and environmental benefits they offer. Stove Industry Alliance manufacturers have experienced a surge in interest, reporting that an estimated 200,000 stoves were fitted in the last year alone, reflecting the fact that consumers are seeking more efficient and cheaper methods of heating.
After leaving university with a degree in economics and management, Hot Box Stoves’ co-founder Oliver Neal worked in the construction industry for six years. This experience gave him a lot of technical insight, and in 2009 he wanted to install a wood burning stove in a house he had bought and was renovating. “I’d purchased the stove online and had gotten quite a good deal but when I approached one of the local stove shops to install it they wouldn’t as I’d bought it myself.” And so he set about doing it himself.
Neal enlisted the help of his old school friend Tristan Andjel, who at the time was running his own small plumbing outfit and had plenty of hands-on knowledge. “Somewhere in the installation process we both looked at each other, realising there was a gap in the market, and decided that we’d have a go,” says Neal. “I sat that evening scribbling on a pad with some ideas for names and came up with ‘Hot Box’.” He knew that corporate identity would be key and so enlisted professional help with the logo. “The Hot Box brand was born and it is now instantly recognisable.”
Hot Box currently has four directors. Neal is MD and focuses on business development; Andjel takes care of a lot of the day-to-day stuff like surveys, quotes and overseeing installations; leading biomass technician Adam Tyler takes charge of much larger projects; and Neal’s dad Geoff, who is a silent partner with a wealth of experience, provides much-valued advice when it’s required. Neal and his father collectively own three businesses: Hot Box, a family roofing company specialising in listed buildings and churches and another business that buys and sells reclaimed building materials.
The first ad Neal put in a local newspaper cost £150. This was on February 11, 2009 and by Valentine’s Day Hot Box had its first installation – and it has been growing ever since. Given his connections in construction Neal was also able to spread the word quite easily.
The early stages of any business can be financially tricky but with the economy in such a state, 2009 was an especially difficult year. Neal was working 17 hour days across his various roles to drive Hot Box forward. “The hours I put in were due to my pure belief in the brand and the products that we were looking to supply and install.”
He was fortunate enough to have money from his other businesses. “From here we very quickly found ourselves able to self-finance our initial growth,” Neal says. “We reinvested everything and continue to do so today.”
Over the past seven years the team has built a very strong business with a turnover of £500,000 and anticipated growth of around 15% per year. This success comes down to Hot Box’s relentless focus on high-quality products and excellent customer service. One need only look to the testimonials on its website to see it has a lot of very happy customers. The firm has also embraced technology by developing a web-based, instant ordering and quotation system, and its continued investment in the training and development of its employees makes for a skilled and committed workforce.
The next stage is franchising. Neal and his team are keen to develop a successful, well-managed franchise network throughout the country and are confident Hot Box represents a great opportunity for people with the right skills and customer focus. The company recently took a stand at the Franchise Show at London’s ExCeL. “The event gave us a great insight into the sector,” says Neal. “It was a good opportunity to talk to a number of people interested in taking a franchise.”
Controlling any business that has a construction element, and in particular one that is in people’s living rooms, can at times be challenging. Health and safety is of upmost importance and a continued relationship with customers is essential. Furthermore, the stove industry presents a number of barriers to entry in terms of dealerships and territories which can hinder a company’s ability to get certain products in certain areas.
“Franchising seemed sensible to us as we could, by distributing products through ourselves, remove any such barriers for our franchisees,” says Neal. “This meant that they immediately had access to a rage of great products at very preferential prices,” says Neal. “We’ve done all the hard work, from getting the products to creating a really effective online ordering system that’s very easy to use; we’ve learnt on behalf of franchisees.”
Hot Box has spent a great deal of time honing its business in York and obtaining the right products. “Our success can be replicated elsewhere so long as our franchisees follow our lead and don’t deviate from the products and services that we suggest that they provide,” says Neal. “There is a high mortality rate amongst fledgling stove businesses because of barriers to entry and poor product choices leading to issues with installations.”
The basic franchise package includes everything a franchisee needs to start an installation business; Hot Box will even supply the firewood. It can also tailor a package to a franchisee’s individual requirements. “You can either run it from a van, a small warehouse where you can take deliveries and keep some stock or you could go for a retail outlet and run your business from there; it’s really down to the individual and what they want to do.”
In terms of training, there are a few very specific courses that franchisees need to attend in order to gain an initial insight into the solid fuel industry. “We are more than happy to offer as much support as necessary until our franchisees feel confident and are always on hand to talk through any issues even if we are not able to physically be there,” says Neal. “A franchisee is part of what we have worked very hard to build and supporting them is part of our role as franchisor.”
It is imperative that Hot Box has a good working relationship with its franchisees. “If you cannot immediately find common ground with a person you are unlikely to be able to build a sound working relationship,” says Neal. “The old adage that ‘first impressions last’ is very appropriate.” Ultimately it is Neal’s aim to have 30 franchises throughout the UK.
Fundamentally, one of the biggest challenges in the solid fuel industry is avoiding cowboys doing installations badly, which presents a huge risk to the homeowner. “As the industry develops, more regulation will be imposed. I would like to see Hot Box at the forefront of this as a trusted household name that offers its customers not only the installation but annual service and maintenance packages to ensure safe and proper use.”
Whatever way you look at it, Hot Box is firing on all cylinders.