Chipsaway Franchises

[aa2008]

Hi guys,

First post so be kind

I'm after some advice about Chipsaway franchises

I know there was a chipsaway guy on here ages ago but hes not posted recently.

Seeing as there are quite a few knowledgeable business people on here i was wondering what peoples opinions are on franchising in general and chipsaway franchises if possible.

Thanks

[Eric Mc]

Franchsisng - a quick route to running your own business but will generally never be as profitable as a genuine trade set up from sctratch.

They can work out quite well - but they vary hugely. Some are good and some are downright dogs.

I have no knowledge of Chipsaway so can't speak specifically about them.

(I presume they are car/paint related and not some kind of fast-food takeaway? )

[JustinP1]

If you have not run a business before then franchising is a nice option as they are putting the infrastructure in your hands from day one.

As Eric says though, compared to another business you start from scratch, you will of course be putting money to the franchise owner.

Out of interest what are the figures here? How much to set up, and what kind of business do they put your way, and what are the ongoing costs?

[soprano]

Eric Mc said:

Franchsisng - a quick route to running your own business but will generally never be as profitable as a genuine trade set up from sctratch.

They can work out quite well - but they vary hugely. Some are good and some are downright dogs.

I have no knowledge of Chipsaway so can't speak specifically about them.

(I presume they are car/paint related and not some kind of fast-food takeaway? )

I actually thought it was a fast food franchise until you said that...

[aa2008]

Eric Mc said:

Franchsisng - a quick route to running your own business but will generally never be as profitable as a genuine trade set up from sctratch.

They can work out quite well - but they vary hugely. Some are good and some are downright dogs.

I have no knowledge of Chipsaway so can't speak specifically about them.

(I presume they are car/paint related and not some kind of fast-food takeaway? )

Yeah they are SMART (Small Medium Area Repair Technology) - so yeah car repairs.

I've looked at a few franchises and they come back as one of the good ones.

The plus for them is that they only charge a weekly rate of #60 management costs and not your standard percentage of profits rubbish.

My plan is to get as much as I can out of the franchise for the next few years, whilst i'm still young'ish. Then either move onto another more profitable business or a bigger franchise with with bigger returns.

Typical example of what they project:

3 jobs a day around 120 per job for 5 days for 45 weeks out the year. Turnover around 81k. Now this does depend on how many jobs that can be done. The more confident you get the more jobs you can turn out a day. Plus you also have the option of employing more people and having their own fully equipped vans out. Obviously, there's more overheads but based on those figures it doesn't sound too bad.

Also, you have also factor in that its an industry where there will always be work. You will always have cars on the road and you can always rely on women scrapping their husbands pride and joy in the Tesco carpark.

[JustinP1]

aa2008 said:

Eric Mc said:

Franchsisng - a quick route to running your own business but will generally never be as profitable as a genuine trade set up from sctratch.

They can work out quite well - but they vary hugely. Some are good and some are downright dogs.

I have no knowledge of Chipsaway so can't speak specifically about them.

(I presume they are car/paint related and not some kind of fast-food takeaway? )

Yeah they are SMART (Small Medium Area Repair Technology) - so yeah car repairs.

I've looked at a few franchises and they come back as one of the good ones.

The plus for them is that they only charge a weekly rate of #60 management costs and not your standard percentage of profits rubbish.

My plan is to get as much as I can out of the franchise for the next few years, whilst i'm still young'ish. Then either move onto another more profitable business or a bigger franchise with with bigger returns.

Typical example of what they project:

3 jobs a day around 120 per job for 5 days for 45 weeks out the year. Turnover around 81k. Now this does depend on how many jobs that can be done. The more confident you get the more jobs you can turn out a day. Plus you also have the option of employing more people and having their own fully equipped vans out. Obviously, there's more overheads but based on those figures it doesn't sound too bad.

Also, you have also factor in that its an industry where there will always be work. You will always have cars on the road and you can always rely on women scrapping their husbands pride and joy in the Tesco carpark.

Those are pretty good figures. I just checked a site in the meantime out of interest! The only sticking point I can see is the minimum investment is £22,500. If your credit is good and there is not another franchisee in your area, it does look good though. My recommendation would be to rework your figures as if you only have one job per day, as this might end up being the case. Does this still make it viable?

[aa2008]

Credit ratings fine. Plus banks are willing to lend upto 70% of the costs anyway. From what i've read they have links with the major banks also as the banks see it as a much better option to a new start up. They are lending to a proven business model.

I've also looked at the little things i.e how long they've been established, members of the BFA (British Franchise Association) etc.

I can see the market for it though. You can do private jobs and also serve the trade (garages). Have a few trade contracts and it could keep you busy. They key is to expand and a good steady rate and the more people you have out on the roads the more you would be earning.

[B19GRR]

The minimum investment is strictly speaking more than the £22.5k+VAT as you are strongly urged to to buy the options, which do all make sense really, especially the marketing option if you have no experience of marketing a company. Start up will end up at about £35k+VAT.

As has also been said, look at worst case figures, 1 job a day type thing. During the first year whilst establishing you might not get up to 3 jobs/day. In fact depending on territory 3 jobs/day might be difficult if you're in a rural area due to the travelling. Whereabouts are you looking to set up?

Cheers,
Rob

[aa2008]

B19GRR said:

The minimum investment is strictly speaking more than the £22.5k+VAT as you are strongly urged to to buy the options, which do all make sense really, especially the marketing option if you have no experience of marketing a company. Start up will end up at about £35k+VAT.

As has also been said, look at worst case figures, 1 job a day type thing. During the first year whilst establishing you might not get up to 3 jobs/day. In fact depending on territory 3 jobs/day might be difficult if you're in a rural area due to the travelling. Whereabouts are you looking to set up?

Cheers,
Rob

It would probably be in and around Birmingham or the West Midlands. I wouldn't do it around a scarce population. The bigger the city and more potential there is.

I can see your point about the extra add on options and I agree that paying those extra now would be a benefit in the long run.

[B19GRR]

aa2008 said:

It would probably be in and around Birmingham or the West Midlands. I wouldn't do it around a scarce population. The bigger the city and more potential there is.

I can see your point about the extra add on options and I agree that paying those extra now would be a benefit in the long run.

Convenient for Kidderminster too! Have you spoken to any of the existing franchisees in your area to get a real idea for typical work load?

Cheers,
Rob

[caterhamboy]

My mum had her car done at home after the peugeot garage scratched it, the guy who did it used to be a chips away franchisee or similar and does it by himself now as he said he couldn't make it pay before as they take to much off you. By the way he was billing the garage direct for £80 and did a few other bits out of goodwill so take £120 per job with a pinch of salt.

[aa2008]

Not at the moment. But I think I'm gonna attend one of their open days soon.

I have exchanged emails with one the ladies at their office and she advises that they have both existing and new franchisees present to chat to on the day. They go through all the options and also get to chat to the existing franchisees for advice etc.

She also said that they do have franchises around that area. I think they do it on a postcode basis and not sell the whole of area i.e Birmingham, Coventry etc to one franchisee. I would make no commercial sense as it is a large area.

They have around 350 franchisees around the country but I think they still have good territories available and not just the scrap thats left.

[aa2008]

caterhamboy said:

My mum had her car done at home after the peugeot garage scratched it, the guy who did it used to be a chips away franchisee or similar and does it by himself now as he said he couldn't make it pay before as they take to much off you. By the way he was billing the garage direct for £80 and did a few other bits out of goodwill so take £120 per job with a pinch of salt.

That's something that I would need to ask them. They've stated on their website that they only charge a weekly management fee.

I'll need to ask them about the failure rate

[caterhamboy]

can you buy the equipment and get training without them?

[B19GRR]

You're going to be needing to earn roughly £700/month before you start making money, that's basically your £70/wk franchise fee, £300/month van lease and £100/month insurance, then you'll have consumables on top of course, surprisingly the more you work, the more you use So in theory if you work 1 job/day for 6 days a month you'll cover costs, but obviously won't eat, have anywhere to live or be able to pay the bank back - all minor stuff

The £120/job is a guide price you can be flexible with it if need be. Ideally you'll be able to bump the invoice up as there will be other things that'll need attention on the car, curbed alloys, chips in windscreen etc. ChipsAway repair costs are generally higher than the other chip repair franchises, but less than a bodyshop. The client will be paying for the brand name and reputation as well as (hopefully) quality of job, so that old marketing chestnut comes in to play again. The last time I had some work done it cost me £200, that was for a fairly large area, maybe 10x7" that had a number of paint stick repairs done, plus two or three other reasonable size areas on the car and a hefty bumper scratch job.

Drop Anatol an email, he's based in Cambridge with a pretty large operation, get him to add some thoughts to this thread.

Cheers,
Rob

[aa2008]

Cheers Rob,

That's the kinda stuff I was looking for. I just waana be able to go the open day and question them about this kinda stuff.

Its all good saying that 81k can be an average but I need to know how much the costs of this kinda operation actually are before committing anything.

Is 'Anatol' a chips away guy?

[B19GRR]

aa2008 said:

Is 'Anatol' a chips away guy?

Yup, most definitely:
http://www.pistonheads.com/gassing/profile.asp?mem...

often found in the bodywork & detailing forum.

Cheers,
Rob

[aa2008]

Thanks Rob,

I'll send him a message.

[blot]

Went on one of their info days a few years back when looking to start up in something new.

Decided not to persue any further after it.



You have to sign an agreement not to discuss any aspects of the business outside the room, so I won't.


A general observation on look at opportunities should include the allocation of operating area and its demographics. These will probably influence some peoples decisions on wether to take up a franchise business opportunity.

Edited by blot on Wednesday 27th February 19:34

[aa2008]

blot said:

Went on one of their info days a few years back when looking to start up in something new.

Decided not to persue any further after it.



You have to sign an agreement not to discuss any aspects of the business outside the room, so I won't.


A general observation on look at opportunities should include the allocation of operating area and its demographics. These will probably influence some peoples decisions on wether to take up a franchise business opportunity.

Edited by blot on Wednesday 27th February 19:34

I'm guessing you made the right choice judging by your ride

Did you get the impression that it is a profitable business model (not going into too much details of course)

I'm just weighing up the options at the moment. Any and all advice welcome