The BFA explores why franchises that cater for young people are doing so well and new research that might help explain why.
Despite the very real pressures of the current cost-of-living crisis, franchises that revolve around young people are booming, which is not only good for the kids, but great for franchise brands too.
We recently spoke to two franchises, who are seeing tremendous success, to find out what’s making them grow, plus we’ve got some insight from a franchise software provider who thinks he may have the partial answer as to why they are bucking the economic trend.
The Geek Retreat – building community and success
Peter Dobson is CEO of Geek Retreat where kids and young people gather to play a variety of board, card and online games and hang out in an inclusive, alcohol-free environment. They also sell the latest card games and serve food.
Launched in 2013 in Glasgow, Geek Retreat currently has 31 franchisees overseeing 34 stores.
Peter gives an outline of the franchise’s recent success: “Despite declining UK retail sales, we shattered records throughout June, July, and August 2023, making last summer a resounding success for us. In August 2023 our ‘Average Daily Revenue’ jumped 20% compared to July, thanks to the hugely successful launch of the film Lorcana.”
He puts the secret of the franchise’s success down to the community feel the shops create with their young customers, which in turn foster loyalty in tough times: “With a Net Promoter Score (NPS) of +70, our loyal customers are a testament to our dedication and personal commitment” says Peter.
Franchisee perspectives – meeting demand
Franchisees Stewart and Laura Brass own a Geek Retreat store in Sunderland.
Laura explains: “The demand for new hobbies and finding places to play with friends is on the increase, and our store has become the perfect destination – or as our customers say, a second home. We’ve noticed a surge in the appeal of our inclusive, alcohol-free spaces, especially among younger customers. We’ve also expanded our product range, ensuring a seamless transition from browsing to buying.”
Razzamataz Theatre Schools – nurturing creativity and confidence
Denise Gosney is the founder of Razzamataz Theatre Schools. She started the business in 2000 before being backed in 2007 by BBC’s Dragons’ Den. She currently has 52 franchise partners covering 62 locations.
Denise explains: “Our turnover at the end of December 2022 was approximately £3.5 million and I fully expect it to reach £3.75 million by the end of December 2023. We’ve also recruited five new franchisees and many of our existing franchisees took on additional revenue streams, added extra classes or bought additional territories.”
Parents still investing in children’s education
But why are parents still spending money on activities that could be seen as ‘luxuries’, when inflation is sky high and household budgets are being squeezed ever tighter?
Denise explains: “By providing high-quality performing arts education for children and young people, we tap into a niche that is highly valued by parents. Razzamataz allows children to develop their creativity, confidence, and performing abilities, while also promoting important life skills such as teamwork and discipline.”
Franchisee success story – Amber Gibney
Amber Gibney is the owner of Razzamataz, Stockton On Tees. She worked for another Razzamataz franchisee before buying her own territory: “Because I saw firsthand what an incredible job head office did supporting people during Covid, it gave me enormous confidence when deciding to invest in my own franchise. My business is going really well now; one year in and I have 140 students, I’m running weekly classes, creating jobs, and of course, giving our students a great time.”
Is generational wealth supporting children’s activities?
Apart from franchisees offering great products and services to their customers, could there be another reason why children focussed franchises are doing so well?
Theo Millward, CEO of digital franchise management platform Franscape thinks yes: “Our research shows us that the gap between rich and poor has never been wider with the affluent young parent effectively gone. Much of the country’s wealth now lies with people over 50 whose children have left home, their mortgage is paid off and they are now helping to pay for their grandchildren’s activities.” Whatever the reason, franchises that revolve around children continue to thrive, despite the economic crisis and are proving wise investments for their franchisee owners.