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Thursday 11th August, 2022

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Making Kids Franchise Expansions Add Up

Insight

Making Kids Franchise Expansions Add Up

The Franchising Centre founder Brian Duckett talks to US brand Mathnasium, as they prepare to take a children’s franchise to the UK market

The Franchising Centre founder Brian Duckett talks to US brand Mathnasium, as they prepare to take a children’s franchise to the UK market

Over the years, The Franchising Centre has enabled dozens of franchisors to expand internationally, either into or out of the UK and beyond. Whilst the challenges faced by franchisors often have common elements, the fast-growing ‘children’s sector’ is often seen as a simpler audience to serve as there are fewer cultural issues regarding tastes and styles. Kids are kids the world over, aren’t they?

Well, apparently things are not always as they seem. This month I had the opportunity to sit down with Steve Felmingham, UK Operations Director for Mathnasium – the children’s maths learning centre franchise. Mathnasium started in the USA and are now in 15 countries and growing, so I thought Steve might be able to shed some light on the challenges they faced as they entered each new market.

BD: I can see that Mathnasium have been franchising for 16 years but are relatively new to the UK – why the long period before entering the UK market? Surely the UK would have been the first logical step outside the US, given that we have a common language already and so translation would have been so much less of an issue?

SF: I think someone once said that the UK and the US are two nations separated by a common language! There are certain market sectors where differences in spelling, grammar and terminology wouldn’t be an issue, but children’s education isn’t one of them. Our customer base is parents who are worried that their children might be falling behind in school, and they need to know that we are going to be able to identify and plug any gaps in their knowledge and understanding. Our system of teaching is identical the world over. It never changes but the ‘packaging’ of our offering differs in every country.

Clearly we need to understand the educational landscape but also if we are to engage with parents and their children we need to resonate with them in every interaction, be that marketing materials, programme materials, online adverts or any other customer-facing content. One thing we learned very quickly is that the British consumer is far more aware of this than virtually any other market we’ve entered, hence the delay in getting ourselves ready to enter this market.

BD: Sounds like somebody had a big job getting Mathnasium ready for the UK then! Why do you feel that the UK is so much more aware of these little differences?

SF: I believe that nearly every country has a product or service which they feel they ‘own’; something which they feel nobody can do better than them. For example in Italy that might be coffee, in Germany that might be engineering and in the UK, that is almost certainly education. If you imagine going up to a British parent and saying we have an American education system for them, good as it is, they might naturally feel some reluctance because it is not home-grown.

BD: So how did you mitigate that risk?

SF: This is where the localisation of our entire programme came in. It took us two years at a cost of over $1.7m, but we ended up with a programme which is a perfect match to the UK educational landscape, and resonates with parents – and indeed franchisees – in this country as well as it does in every other.

BD: You mentioned franchisees – did the franchise offering need to be adapted as well?

SF: Yes, almost as much as the educational programme. We are a bricks and mortar business, operating from prominent High Street retail premises. In the US that’s usually a case of picking a location in a strip mall, agreeing terms with the landlord and setting up shop. Here in the UK we have things like planning consents to deal with, and the financial model needs to include things like business rates and VAT.

BD: What would you say is the biggest challenge from a franchisee’s point-of-view?

SF: Undoubtedly the acquisition of property. Because our usage is not conventional retail, our franchisees invariably need to obtain ‘Change of Use’ on the premises they lease, and that causes delays and difficulties on all sides. Frustratingly, many landlords – and a surprising number of town planning officers – haven’t realised that the retail landscape is changing and insist on hanging on to the outdated notion that premises kept as retail will be easier to let. Our model – which is a subscription-based membership model – is actually far more robust than the conventional retail model of buying stock and displaying it in the hope that someone will come along and buy it. Our business model cannot be replicated online, will never go out of fashion, and actually draws new people into an area on a very regular and repeatable basis.

BD: So you wouldn’t say that the children’s sector is a particularly easy one to export then?

SF: No, but I would say that it is a hugely dynamic and growing sector, so it is well worth the effort!

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