A tipoff that led one franchisee to build a multi-million pound firm

A tipoff that led one franchisee to build a multi-million pound firm

No matter how solid a brand you buy into, franchise ownership is no guarantee of success. But, with the right acumen and application, it can lead to rich rewards in business, as technology retail champion Zakir Patel tells Andrew Mernin
When the itch to fly solo becomes too great to ignore for people in a steady job, starting something from scratch can seem a daunting prospect.

Whether they want to be their own boss or transform their income, even knowing where to tread first is a challenge in itself.

Investing in a franchise is a popular solution. Snapping up an instant business can reap rewards, although horror stories of overcrowded territories, undercooked markets and extortionate fees exist in abundance.

Last year it was estimated by NatWest that franchises contributed £13.4bn to the national economy and ‘franchise units’ number 40,100 and counting.

Here in Yorkshire, few can boast as much success from the franchise game as Zakir Patel, whose £20m-turnover mobile phone store network is currently turning industry heads nationally.

The o2 franchisee – the UKs first – won the 2013 Mobile Industry Awards title for Best Franchisee and heads up a business which is gearing up for rapid growth.

Dewsbury-born Patel, 41, clearly comes from entrepreneurial stock. Alongside his brother and sister, he launched what became a network of a dozen convenience stores and newsagents at just 23, initially in Lancashire and then across Yorkshire.

Over time the retail business gradually evolved into a computer exchange franchise and today employs around 120 people under the guidance of his siblings.

He got into mobile phones in around 2000 >> when the convenience business started selling top-up cards and – through a promotion – its first handset.

“It sold straight away and we realised the amount of Mars bars you’d have to sell for that level of profit,” he says.

A stable of independent phone shops quickly followed and spread to a handful of locations including Bradford, Pontefract and Dewsbury.

Then in 2006 Patel received a tipoff from a friend in Germany that o2 was considering rolling out the franchise model it had there, into the UK.

Patel contacted o2 and, although his eagerness impressed the telecoms group since it hadn’t announced its franchising intentions, he faced a stringent whittling down among 40 other hopefuls. But ultimately was named o2’s first franchisee. Stores one and two of o2’s newly franchised UK model were in Rotherham and Leeds respectively and headed up by Patel.

Rather than accepting his lot of one store, however, Patel saw a scaleable business model that could mirror previous success in the newsagents business.

“For whatever business I’ve ran I’ve always looked at expansion,” he says. “I’ve always got plans going ahead and if I’ve done something really well I want to replicate that over and
over again.

“The key to success is to do something, perfect it and make sure that every single part of the business is running as smooth as possible, and then replicate it. Life’s so easy once you’ve perfected something and replicated it.”

Today Patel oversees 14 o2 stores and even has a call centre to service his database of customers which currently has eight staff but is expected to grow its workforce to 20 in the coming months.

Further growth beckons and he admits it is the ever-changing nature of the sector that keeps him hungry for more – cue another Mars bar analogy: “The industry is forever changing. I always compare it to the convenience sector. A Mars bar will always be a Mars bar but a mobile phone is always changing. There’s a new product out in technology every month or so and customers also have an expectation to always be moving up and up.

“The greatest thing about the telecoms industry is that everyone needs a mobile phone and we’re not working on a specific market that we need to target, it’s for everyone. That’s the advantage we have.

“It’s also a very cutthroat business, which makes it even more exciting. We have our competitors with deals on that we can’t compete against and vice versa. Everybody’s fighting for the customer which is brilliant for them.”

One of Patel’s tactics in winning this fierce battle for trade, has been the addition of a free business centre at his Merrion Centre store in Leeds, with a big corporate like Barclays to students union groups taking advantage of its facilities.

Patel was this year officially named the UK’s most successful mobile industry franchisee – his 14 stores are in the o2’s top 30 in terms of sales conversions.

And he puts a large part of his success down to his strategy of working on the shop floor instead of the back office.

“You have to work extremely hard and you lead by example. Your team is going to look up to you and that is the foundation of a successful business.”

To others looking to enter the franchising game, Patel believes a strong brand is essential.

“Franchising has given me real success,” he says. “In this current economic climate you need a brand just so that you’ve got those extra steps ahead rather than starting off something new. It’s tough out there for borrowing but if you’re associated with a brand I think it’s a lot easier.”

Beyond locating a suitable brand, he advises: “You obviously need to do your homework in terms of the profitability and you need to be asking a lot of questions to the franchisor.
How big is the brand and does it have enough clout?”

Having overcome the initial hurdles of life as a fledgling franchise player, Patel is now gearing up for bigger goals.

“If o2 would give us the opportunity I would absolutely love to go national. It would be a really, really good challenge to us to operate stores that are not within the Yorkshire perimeter and I think it will happen.”

And where might the industry have raced onto by the time his national rollout is taking shape?

“The pace of growth in the industry is frightening. What are we going to be doing next with these mobile phones? Very soon I think they’ll be controlling the whole of our lives. We’ll be paying our bills with it, switching on the electricity, starting the car up with...everything...and that’s the way the industry is going.

“Texting is pretty much nonexistent now. I can remember three or four years ago several billion text messages were being sent per year. But now nobody uses text messages. They use Twitter and all that stuff. I’m sure the operators are prepared for what’s going on. Meanwhile 4G is taking the industry to the next level. It’s going to revolutionize the market because it’s just so fast at what it does – and what’s going to be next? Where does
it stop?”