Auditel: The franchise opportunity
Startups catches up with the independent cost management chain to find out how it "lays the foundation for franchisees to succeed"...
Description: Cost management franchise
Started in: 1994
Founder: Chris Allison
No. of franchises: 200+
Coverage: Throughout UK & Ireland
Average cost per franchise: £37,950 plus VAT as of 1st January 2015 (training for two people). Initial capital required: circa £20,000
Established by Chris Allison in 1994, Auditel was originally a licencing operation which trained people in utility bill auditing, but in 1997, it was launched as a true business format franchise. Allison developed the offering to include the management of all utility services including communications, and over the past 20 years it has expanded to over 100 cost areas and over 200 franchisees.
Moving into franchising
So how did Auditel move into franchising?
The original thinking in 1994 was to license the Auditel format and provide it as a consultancy service by licenced operators. Three years later, Chris Allison saw an opportunity. Allison says:
“We decided it could be franchised as the business model was simple to implement. In addition, it would be more trouble-free to maintain consistency and uniformity in a franchised network, rather than the looser form of a licensed operation.
“We'd seen a niche open up, thanks to the deregulation in the energy markets, which was offering businesses more choice but also meant decision making for them.”
Where did the business open its first franchises?
West Sussex, Newport and Norwich.
How successful were those original franchisees?
Very successful. Those franchisees, and many others, have renewed their franchise agreements.
The franchise opportunity
What makes the franchise different / unique?
Over the years, Auditel has achieved a recognisable and respected brand in the field of cost management which has enabled franchisees to develop their individual businesses. This success has been attained through constant efforts to leverage the brand in the public and private sectors through sponsorships, memberships, awards and exceptional savings for our clients.
Auditel is a pioneer of ethical and sustainable cost management. Its unique ‘Total Cost of Purchase ®’ approach reveals an unprecedented and detailed level of management data to make accurate, informed decisions for the long term. This sets us apart from those firms which only produce short term savings and which may have repercussions later.
The value of the brand is enhanced by the unrivalled levels of training and support provided to our franchisees by our team of 20 members. We believe we possess the most extensive knowledge bank and state-of-the-art marketing activities in our industry. As a result of ongoing investment, innovation, implementation and improvement, we have created an environment which fosters trust and lays the foundations for each of our franchisees to succeed.
“Any business not using the Auditel service may be placing itself at a disadvantage”- Pizza Express, (where more than £4m has been saved by Auditel).
What services do you offer?
Our consultants provide ongoing cost management. Many organisations acknowledge that this is a vital function and they understand the benefits of outsourcing this mission-critical task.
How big is the market opportunity?
There are 400,000 potential clients, of which Auditel has currently 3,700.
How many franchisees do you have today?
How is the brand marketed?
- Through our own corporate website.
- Direct marketing by over 200 consultants with web-based and printed marketing deliverables.
- Lead generation via specialist agencies.
- Intensive social media.
- Surveys by business magazines, regular press releases and franchisees’ microsites.
How do you divide the regions?
There are no discrete areas. A consultant is able to market UK or Ireland wide. The intranet records a note of prospects and clients which is regularly updated. It indicates that contact should not be made until the information is withdrawn after a set timescale.
The perfect franchisee
What do you look for in potential franchisees?
Auditel’s franchisees are senior management professionals looking for a fresh challenge with high earning potential and great training and support. They have come from careers in many sectors including manufacturing, public sector, finance and banking, IT, insurance, HM forces and marketing. Candidates need strong communication skills, the ability to deal with senior business owners and managers, an inquisitive mind and the drive and determination to succeed.
So do franchisees work from an office, or are they home-based? Is it part-time or full-time?
Most work from home, but many grow their business, take on staff and move to an office. It is a full-time occupation.
How are franchisees vetted?
After the initial enquiry, candidates are invited to an informal free ‘Discovery Seminar’. If they wish to pursue the opportunity, they are invited to a personal interview with the managing director and to meet the senior managers. They can discuss what they are seeking and what the franchise has to offer. If both sides feel comfortable and wish to continue the discussion, further visits can be arranged, a business plan agreed and the franchise agreement provided to study.
What do you offer franchisees who sign-up?
A five-year award-winning mentoring programme which includes:
- Sales and marketing training.
- Lead generation.
- Technical training courses and bespoke tendering tools.
- Business reviews and career development.
- Ongoing seminars and workshops.
- Regional and local meetings.
- Annual national conference.
- Annual supplier exhibition.
- Our unique Auditel business management system.
- Unlimited access to Auditel coaches, trainers and mentors.
- Plus, everything needed to run a profitable and satisfying business.
How much do franchisees pay and what are the ongoing franchise fees?
The franchise fee is £37,950. The ongoing management service fee is 12.5% of gross income.
Success and growth
How successful are some of the franchisees today?
The majority of franchisees renew their franchises after five, 10 and now 15 years due to consistently achieving their financial goals and the quality of life they want for themselves and their families.
The average earnings of full-time Auditel consultants with established business practices are over £100,000, while some make over £200,000.
How is the brand looking to grow?
To realise the full potential of the Auditel network in the UK and Ireland, we want to grow to 250 franchisees in the near future. We shall increase our client base and continue to develop the capability of managing both the smaller and larger accounts. We aim to retain our position as the premier consultancy in our core discipline of cost management.
What is the potential of the business?
There are over 400,000 potential clients in the UK and Ireland who could use our service. Currently we have just over 3,700 clients so there is a wealth of business available for our consultants.
What will the challenges be in achieving that?
We are not really threatened by price comparison sites or brokers. The biggest competition can be the clients themselves! They may think that they have already achieved a cost reduction exercise and so they question the need to use us. We sit down with them and, by asking the right questions, demonstrate how we could be augmenting what they are already doing. Our franchisees are marketing our services energetically and turnover increases year on year.
What awards has the business won?
Auditel has been recognised over a number of years for providing significant support to their franchisees.
- Winner of the bfa HSBC Franchisor of the Year Award for Franchisee Support 2012.
- Finalist in the bfa HSBC Franchisor of the Year in 2010 and 2011.
- Finalist in the Franchise Marketing Awards for 5 years covering Best Franchisee Marketing Support and Best Website.
To what extent are the founders involved today?
Ongoing involvement. Chris Allison is the managing director and is especially involved in selecting excellent and enthusiastic candidates.
Finally, is the company a British Franchise Association (BFA) member?
Yes, full membership since 1998.