- Player: Ricardo Maio
- Franchise: ACDC Express
- Established: 2007
- Contact: acdcexpress.com
Until the mid-2000s, those in desperate need of electrical supplies had little option but to go to large wholesalers, where the purchasing process could often be difficult and frustrating.
If you weren’t sure what exactly you were looking for, it was difficult to weigh up your options and consider different alternatives, since the buying process was largely blind – you would usually simply order from a pricelist or catalogue.
It became clear, therefore, that an opportunity existed to create a completely new sort of electrical store: One that would revolutionise the experience, and make buying complex electrical supplies much easier for the customer.
How would this be done? Quite simply, by creating retail stores that allowed customers to browse and compare products in exactly the same way that one would do at a supermarket. Items would be on display, free to be examined by shoppers.
These new shops would be called ACDC Express
“We realised that there was an opportunity to create a new kind of electrical store,” says ACDC Express MD Ricardo Maio.
“We wanted to create a retail space that was open and user-friendly, and offered a wide range of products. So, with this in mind, ACDC Express was started as a retail store that would stock products supplied by ACDC Dynamics — an importer, manufacturer and distributor of electrical supplies that was well-established and very respected.”
Entering the retail space
ACDC Express was formed in 2007, and currently boasts a portfolio of 20 stores. The company consists of independently — owned electrical retail stores whose products are primarily sourced from ACDC Dynamics. It boasts a product range of over 75 000 individual items.
That includes security, hygiene, automation, telemetry systems, pumps, switchgear and instrumentation, energy management and power factor control, solar, tools, wiring and cable management, as well as a comprehensive range of lighting products. This includes premium brands such as Gewiss, Terasaki, Datalogic, C & S Electric, Rhomberg, Weicon, Moël, Orbis and Oérre, to name a few.
“We realised that ACDC Dynamics didn’t feature in the retail market and it was a great opportunity to shore up our value chain and create another revenue stream. Franchised retail stores would increase the number of dedicated buyers that could help us grow the brand,” explains Maio.
When the first ACDC Express store opened, it offered a completely new experience. It was the first specialist electrical retail store aimed at the household, contractor, industrial, agricultural, mining and manufacturing sectors.
“We offered a massive product range — 60 000 items, which has now grown to more than 75 000. What really made us stand out, though, was the retail store concept that mirrors the convenient and versatile shopping experience customers have become accustomed to in supermarkets,” says Maio.
“Having stock on display is a strong selling point because many of our customers are technical and hands-on people who like to touch, feel and compare products.”
A unique proposition
What makes an ACDC Express franchise such a favourable investment? According to Maio, its unique concept makes it very attractive.
“We’re the only electrical franchise store in the world, not just in South Africa. Even though we’re electrical specialists, stores aren’t limited to a single kind of customer. We serve everyone from DIY enthusiasts, to contractors and large corporates.”
Because of the relationship with ACDC Dynamics, stores can expect excellent margins when focusing on a mixture of industrial and retail customers.
To realise the dominance that ACDC Dynamics has in the market, one need only study the company’s industry catalogue.
“Everyone — from contractors to architects — has this catalogue,” says Maio. “In fact, it’s come to be called ‘the electrical bible’. Because of this in-depth specialist knowledge, we’re able to train franchisees and their staff to become experts in their own right — they needn’t have industry experience. Support and regular training doesn’t just help franchisees run their businesses well; it creates great customer service and value.”
Help from above
Apart from intensive training, ACDC also manages marketing and systems and keeps up to date with electrical developments, so franchisees can focus on sales and staff.
ACDC Express has also developed a standardised and user-friendly IT infrastructure, which makes managing a store much easier.
“Before opening, we also get our franchisees to pack their stores after two weeks of training. It’s part of the process of getting to know their store and benefits them when helping customers,” says Maio.
The ideal franchisee
“We like owner/operators, as they’re 100% committed to the store, and are therefore better at driving growth,” says Maio. “A prospective franchisee needn’t have industry experience, but they must be willing to learn about products, procedures and systems for the store and staff.”
How Strong Is Your Franchise’s Quality Control?
Your key objective as a franchisor is ensuring every one of your locations maintain the same quality standards. Why?
If you’re concerned about brand consistency as your footprint grows and you acquire more franchisees, listen up. While growth is good, keeping tabs on the quality franchisees are providing versus your company-owned locations’ efforts is difficult, but not impossible.
“McDonald’s is among the world’s most quality-oriented brands, but the value proposition and price point aren’t appropriate for steak and lobster,” says Mark Siebert CEO and Senior Franchise Consultant at iFranchise Group, an author of Franchise Your Business, The Guide to Employing the Greatest Growth Strategy Ever.
“There are, however, high-end franchise brands known for detailed attention to quality. Quality is not about what’s on the menu; it’s about consistency of the operation.”
Inconsistency ruins things
Many franchise brands risk failure by not establishing and maintaining quality for each outlet under the network’s guidelines. Regardless of whether a store is run by your company or a franchisee, if there’s glaring inconsistency in service and product quality between different locations, it’s likely to harm your brand’s reputation.
To establish the strength of your quality control standard, ask yourself the following questions:
1. Is your operational training procedure customisable?
Acquiring new franchisees is a chance to cement your training and quality processes and establish if these can be standardised, or if customisation is necessary.
“Training is equally as important as franchisee selection when it comes to maintaining the brand. The best franchisors routinely provide the most – and the most comprehensive – training to their franchisees,” says Siebert. “If standards aren’t rigorously enforced from day one, chances are these standards will continue to slip, and in the process, they’ll become more and more difficult to maintain.”
Because different locations present varying climates and market preferences, remember to customise your training materials based on respective franchisees’ markets, keeping in mind to remain consistent with your brand’s core identity.
2. Have you provided the right tools in the franchisee manual?
Duplicating your franchise’s success relies heavily on mapping out the roadmap for your franchisees and their employees to follow. The right tools will most likely yield the same results you have achieved.
“Documenting systems of operation lend a big hand in a quality control,” says Siebert. “A robust manual has multi-fold benefits and not only serves as a blueprint for operation, but as an ongoing piece of reference for even the most established franchisee, becoming the default go-to in most every scenario.”
3. Do you understand the role of supporting each franchisee?
Whether you choose to conduct on-site field visits, offer master classes like Nando’s, or check in via email or phone monthly, the ultimate goal should be aiming for higher-quality and more profitable franchisees through ongoing support and reinforcement of brand standards.
Quality control is all about commitment. For a good franchisee, that commitment comes naturally. For the franchisor, it comes at a price. But franchisors who are willing to pay that price will find their ability to build a quality brand greatly enhanced,” says Siebert.
Could Semi-Absentee Franchise Ownership Be For You?
Ready to become your own boss…for only 15 hours a week? Yes, you can become a franchisee while still clocking into work. Here’s how.
If you want to keep your current job while owning your own franchise, you may want to look into semi-absentee franchising.
“A semi-absentee model allows you to work on the franchise for ten to 15 hours per week while continuing full-time employment. Then when the time is right, you can exit your day job to focus entirely on your business,” explains Jim Judy, a consultant at Franchoice.
When you have a capable manager to oversee the daily operations of the business, you have the flexibility to work your full-time job and ownership of a fully-fledged business. But first, the following considerations need to be made:
How will the decision affect your finances?
While being a semi-absentee franchise owner may require less from you in terms of time, the financial commitment is the same as investing in a franchise as an owner-operator. The decision to become a semi-absentee franchisee should not be made before examining your needs, goals and expectations of the business. Asking yourself the following:
- Do I want to become a franchise empire builder?
- Would I like to build numerous concepts?
- How much capital do I have to invest?
Keep in mind that semi-absentee models may take longer to turn a stable profit if you’re not giving it your full attention due to spending less time working on the business.
“Semi-absentee business models are also expensive,” says Heather Rosen, president of FranNet of Virginia, a franchise advisory firm. “Because the owner must not only rent the space but hire a competent manager.”
Do you have the necessary skillset?
The key to managing a franchise while at you have a full-time corporate job is having impeccable people management skills. This is because having a manager run your business while you oversee them requires you to be comfortable with delegating and trusting that they will handle the day-to-day operations of your business.
In addition to people skills, you may think certain talents are required before calling yourself a business owner, but each franchise is different.
“Some franchisees find that the available training and the business concept allows them to use their particular talents and skills to enter semi-absentee franchising without management or business ownership experience,” say experts at Franchise Direct.
Can you balance your schedule adequately?
Even if your plan is to one day leave your job and become an owner-operator of your franchise, while you’re still on your employer’s payroll, you will need to work out ways to handle your nine-to-five tasks with your business’ success. This is an important aspect of choosing the kind of franchise to purchase. While most semi-franchisee suitable options are in retail or the service industry, ensure you’re able to keep track of the business remotely and can periodically check in on how things are going.
Insights On Recruitment That Could Affect Franchise Performance
A critical aspect of operating any successful franchise chain is getting the right franchisees on board.
You’re facing a lot of competition as the franchising industry continues to grow. International brands, local giants, and new innovative entrants to the market require you to step up your game. Not only are you geared for growth, but you need your new locations to compete with the best.
“One of the success factors for franchise systems is market penetration which is often achieved through expansion, by opening new stores with quality standards that match the brand – through franchisees,” says Ethel Nyembe, Head: Sales Optimisation and Planning at Standard Bank Group. “The wrong fit, however, can seriously set a franchise’s growth back many years or cause irreparable damage to its reputation.”
Besides the challenge of trying to make your brand more appealing to franchisees in a competitive market, acquiring the right candidates to join your franchise requires the following:
1. Draw up (and adhere to) a checklist
Not all franchisees are created equal, and even a candidate with previous franchising experience may not be the right fit for your particular brand. Alternatively, you can decide to train a potential franchisee if you see potential.
When narrowing down your list of franchisee candidates, consider the importance of this:
- How important is prior experience in terms of the franchisee’s ability to become profitable in their first year?
- Does he or she have the necessary resources to train and support the franchise?
“You need to be clear about what you want; don’t compromise on your required skills, priority traits and qualifying requirements,” advises Nyembe. “There’s too much at stake financially and reputation-wise to settle for second best.”
2. Network in the right circles
Sometimes, if the talent doesn’t come to you, it’s beneficial to seek it out physically. Industry events are a great place to come into contact with people aiming to own and run their own franchise. If not, your presence at these functions will expose your brand to more potential people to do business with.
“During key annual industry conferences and trade shows (such as The International Franchise Expo), make a point to send attendees, to sponsor or to exhibit in order to increase brand visibility,” advises Nyembe. “Also consider participating in panel discussions.”
3. Get to know your new brand representatives
While personality tests and numerous meetings can give you an idea of whether you’re choosing the right candidate, it’s important to consider taking a more advanced approach to franchisee recruitment.
“Selecting the right candidates to represent your brand is critical to your operation’s ongoing success,” says Sue McConnachie, Vice President, Quality Credit Services Limited. “These franchisees will be the face of your company and you need to trust that they will maintain your brand image.”
The selection of franchisees is crucial because, as it carries both long- and short-term implications, including:
- Reducing franchisee failure and turnover, while increasing success and profitability
- Protecting and developing your brand’s reputation
- Focusing your resources on business planning and management instead of problem-solving
- Decreasing exposure to legal implications when a franchisee’s conduct is negative or their franchise is unsuccessful
- Minimising legal and collection claims against delinquent franchisees.
Selecting your next set of franchisees requires establishing a checklist before viewing any CVs, dedicating time to seek out potential franchisees, and ensure you’re choosing people who will take as much pride in your brand as you do.
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