Diamond Logistics: The franchise opportunity
The ambitious logistics firm reveals to Startups its franchise growth strategy
Franchise: Diamond Logistics Ltd
Description: An opportunity for determined and motivated individuals, providing smart businesses with ingenious service led logistics
Started in: 1992
Founder: Kate Lester
No. of franchises: 7 (2 presold for 2014 roll out)
Coverage: UK wide
Average cost per franchise: £15,000-£25,000
In 1992, founder Kate Lester was working at a courier company when she thought, “I can do this better”. Branching out on her own and working initially with big blue chip companies like Oracle, she provided a 24 hour, seven days a week service and soon earned a place in the National Courier Association (NCA). By 1998 Lester was a committee member in the NCA and chairman of the Despatch Association. And word about Diamond’s success spread.
In 1999, the growing company was asked to help other businesses when they were in trouble or needed help starting up. Turning her hand to consultancy, Lester gained an insight in to the trials and tribulations of different operating practices at a variety of logistics oriented businesses.
For a few years Diamond remained in its ‘boutique’ form, before Lester had her lightbulb moment. Why not use the insight she’d learnt to scale her own business. With an imperative desire to retain quality Diamond decided to franchise. With seven existing franchises and plans to grow to 25 in 2014, Startups catches up with the relatively new franchise to find out more about Lester’s ambitious plans to become the only quality led national courier network in the UK.
Moving into franchising
So how did Diamond Logistics move into franchising?
Founder Kate Lester was looking for ways to scale Diamond. After meeting Daniel Allin, who contributed his ideas on how courier companies could diversify to introduce more income streams, they began to form a plan. With her ethics and aims and their combined industry experience, plus a shared vision of how a service led logistics solution could be achieved, the Diamond Logistics franchise was born.
Where did the business open its first franchises?
Our first franchise opened in May 2012.
How successful were those original franchisees?
Our first franchisees are thriving with turnovers in their areas in excess of £40,000 and £30,000 per month already.
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The franchise opportunity
What makes the franchise different / unique?
Diamond has big plans to expand the brand. We have the very best in local service standards backed by national and international delivery infrastructures, which makes us small enough to care but big enough to cope. Clients and depots get the best of both worlds.
Diamond’s motto is ‘Shared Success’ – working in partnership with clients, suppliers, team members and its franchises. It’s a different way of collaborative working and it reaps great results, because everyone is pulling together to share the vision of mutual benefit and success.
In 2014 recruitment is limited to 20, with two franchises pre-sold already. Why? Because simply ‘flogging a franchise’ is not what we are about. Diamond are building stable, sustainable and profitable franchises to launch the UK’s best national courier network. So we choose carefully, selecting the best people and devoting A LOT of management time to make sure franchises have the very best support available to help their business to grow.
What services do you offer?
It’s a one stop logistics solution.
From post to pallets. Whether it’s urgent, same day or overnight.
Local, national or global. By motorcycle, van, carrier network or international agent.
So Diamond delivers. Anything, anywhere, anytime.
- Really good couriers – same day courier serves for your blue light consignments
- Multi carrier solutions – tailor-made overnight and international delivery services
- Actual warehouse – the equivalent of a warehouse, despatch manager and delivery driver all rolled into one.
How big is the market opportunity?
Logistics is absolutely booming in the UK. The UK logistics sector is worth over £93bn to the economy. One in 12 working people in the UK work in logistics – 2.3 million people spanning some 196,000 companies. (Source: Skills for Logistics)
How many franchisees does Diamond have today?
We currently have seven franchisees.
How is the brand marketed?
Locally by the individual depot owner and from next June nationally with the launch of Diamond Logistics UK.
How do you divide the regions?
By area and postcode.
The perfect franchisee
What does Diamond look for in potential franchisees?
A determined and motivated individual with experience in courier work, distributions or logistics with a proven sales record. We also want all franchisees to be team players who are willing to maintain our ethics and principles.
So do franchisees work from an office, or are they home-based? Is it part-time or full-time?
They will work from small industrial units, full time approximately 0800 to 1800 Monday to Friday.
How are franchisees vetted?
We start with an initial phone based chat to assess friendliness, then a thorough application needs to be completed and submitted by post.
After a panel assessment, applicants are invited to an interview at Guilford HQ. Subject to panel acceptance and submission of proof of due diligence docs an offer will be made.
How much do franchisees pay and what are the on-going franchise fees?
Franchise investment starts at £14,997 + VAT, with ongoing fees of 10% commission on turnover.
How do franchisees finance the purchase – what arrangements does Diamond Logistics have in place with banks?
Our franchises are required to show evidence of liquid capital of £40,000.
Success and growth
How successful are some of the franchisees today?
Two of our franchises have been established over a year and are flying. A further three have been trading for just over three months and have all signed up new accounts. Our latest two additions have just secured their franchise postcodes for 2014 rollout.
How is the brand looking to grow?
Through franchising to build the best and biggest UK network, with a view to launching the only quality led national courier network with an ability to provide a one stop logistics solution from same day courier, to overnight and international and storage, pick, pack and despatch.
What is the potential of the business?
By June 2014 we will have 25+ depots serving clients around the UK, and will launch UK sales. By December 2015 we aim to have between 40-60 depots UK wide with a turnover by December of £40m pro rata.
What will the challenges be in achieving that?
Dealing with the high demand for our nationwide products – we have to run fast to set up the network as demand is very high for our quality led services.
What awards has the business won?
National Entrepreneur of the Year 2013 – Entrepreneurs Convention September 2013
Entrepreneur of the Month (National) – Entrepreneurs Circle – December 2012
Entrepreneur of the Year (Guildford) – Entrepreneurs Circle – December 2012
Number 11 in So Surrey Power List Top 20 in 2011
Finalist Surrey Business Person of the Year 2009
NCA SE Courier Company of the Year
NCA Personality of the Year
To what extent are the founders involved today?
Kate Lester works in and on the business every day, as does Dan Allin who is the other director.
Finally, is the company a British Franchise Association (BFA) member?
No – although we are going through the accreditation process at present – and our agreement was written by BFA accredited lawyers, Clyde and Co.
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