Driver Hire: The franchise opportunity
Startups talks market potential, sales technique and growth plans with the transport and logistics staff franchise...
Franchise: Driver Hire Nationwide
Description: Driver Hire is the UK’s largest specialist supplier of temporary and permanent staff to the transport and logistics sector.
Started in: 1983
Founders: Mark Lawn and John Bussey
No. of franchises: 102
Coverage: Across the UK including Northern Ireland
Average cost per franchise: From £32,000 for a start-up opportunity; resales from £40,000 to £500,000
The UK’s largest specialist supplier of transport and logistics staff, Driver Hire originally evolved from a partnership between founders Mark Lawn and John Bussey.
With Lawn providing knowledge of the driving and logistics sector and Bussey offering the business know how, their chance meeting led to an innovative business idea and together they opened the first Driver Hire office in Bradford in 1983; a recruitment service business offering mainly temporary drivers to logistics companies.
In 1987, after four years of trading, the business partners turned to franchising to enable business growth. This new business plan helped the company grow to more than 90 offices nationwide, and, in 2004, the success of the business led to investors, headed up by current CEO, Chris Chidley, buying the business from Lawn and Bussey.
In 2011, Driver Hire won the backing of Lloyds Development Capital (LDC) to support its continued growth. Now with over 100 franchises, the new financial backing has helped create further development opportunities for the Driver Hire Group.
Here, Driver Hire tell Startups.co.uk about the huge market potential for new franchisees, why a strong selling technique is important and what’s next for the business.
Moving into franchising
When did Driver Hire decide to start franchising?
The company started franchising in 1987 to help expand the business.
Where did the business open its first franchises?
The first Driver Hire franchises were opened in Newcastle and Sheffield.
How successful were those original franchisees?
Their success helped to develop the proven business model that we operate today.
The franchise opportunity
What makes the franchise different/unique?
Driver Hire has become the UK’s largest specialist supplier of transport and logistics staff. It is also one of the most successful and respected franchise brands in the UK.
We are dedicated to providing industry-leading support to our franchisees to help them achieve their goals.
With a dedicated 80 plus-strong head office team, we currently have around one staff member for every two offices and we’re equally dedicated to franchising as a business model.
Our customers benefit from the high level of personal attention and service that locally owned businesses deliver. At the same time, our highly-developed IT systems and business processes mean customers also benefit from consistent nationwide standards of service and legal compliance.
It’s an award-winning combination.
What services do you offer?
Franchisees running a Driver Hire franchise provide a 24/7 recruitment service. They help customers to keep their business moving, for example if a driver is off sick or on holiday. Our franchisees help customers save money by helping them to strategically plan their staffing levels – providing a flexible workforce to meet customer demands. This is especially valuable to customers in the current economic climate.
Additional revenue streams are available to franchisees as their business expands with most offices now offering permanent recruitment services and training – both classroom-based and online. In 2013 we launched dh Licence Check – an online licence checking serviced linked with the DVLA to help companies check their drivers’ licences. This became particularly relevant with the abolition of the licence paper counterpart on June 8 2015.
How big is the market opportunity?
We operate in a huge market – the UK recruitment industry is estimated to be worth around £32.2bn a year.
How many franchisees does Driver Hire have today?
We currently have 83 franchisees and over 100 offices operating in the UK. The network is still growing.
How is the brand marketed?
Given the need for consistency across the network, and a clear strategic direction for the brand which all franchisees have invested in, Driver Hire’s award-winning central marketing team is a vital part of the business.
Our team of marketing managers and in-house designers provide a wealth of marketing materials, campaigns and promotional merchandise for franchisees to call upon.
There is also an ongoing central sales and marketing effort, which includes;
- Direct mail campaigns
- National sales day incentives
- Online promotion of the brand through the website and social media.
The centrally organised activity is all designed to support the local marketing effort carried out by each franchisee and their staff. The importance of locally-driven marketing in the success of each office cannot be overstated.
Each office is also provided with a ‘microsite’ on the main Driver Hire website, which they control, and which is fully search engine optimised. This enables candidates to apply for vacancies advertised by each office.
Driver Hire’s marketing support has also been recognised externally on a national level.
In March 2016, Driver Hire won the ‘Best Franchisee Marketing Support’ award in the Franchise Marketing Awards.
How are regions divided?
Franchise territories are allocated on a postcode basis providing each franchisee with their own clearly defined trading area.
The perfect franchisee
What does Driver Hire look for in potential franchisees?
No two franchisees are the same but to be truly successful it goes without saying that you’ll be ambitious, hard-working, committed and self-motivated.
You’ll also be a good relationship builder as we are a sales-focused organisation and you will have lots of direct customer contact.
Good organisation skills are vital, together with the discipline to work within a structured environment where legislative compliance is of paramount importance.
You’ll also need basic IT skills and a reasonable understanding of finance. However, you won’t need any previous experience in recruitment or in the transport sector – our training takes care of that.
So do franchisees work from an office, or are they home-based? Is it part-time or full-time?
Driver Hire is a professional recruitment service provider and needs to be operated from commercial office premises. It is not a home-based franchise, and we require your full-time commitment to running your business.
How are franchisees vetted?
We know that choosing the right business needs thorough research.
You want to make sure that your final choice fits in with your family, friends and future aspirations. As franchising is a long-term business partnership we want to help by giving you all the facts necessary to help you make the right choice.
Throughout the franchise process we will encourage you to meet as many people as possible working within Driver Hire. We’ll also give you honest feedback if, during this process, we feel our franchise opportunities might not be suitable for you.
What do you offer franchisees that sign-up?
The Driver Hire support package includes a four to six-week foundation training programme which covers:
- administrative functions such as invoicing and payroll
- a bespoke IT system that takes care of bookings, candidate and customer records and helps to ensure legislative compliance
- a national accounts team that delivers centrally-won business opportunities
- a marketing team providing a steady stream of professional marketing resources
- a dedicated area development manager.
Franchisees will also be joining a fast-moving business that is constantly evolving and innovating to reach out to new potential customers.
How much do franchisees pay and what are the ongoing fees?
The licence fee for a new-start franchise is from £32,000. In addition, we recommend that you allow a further £7,000 to £10,000 for other start-up costs e.g. furnishing and equipping your office, professional fees.
Our ongoing franchise fees are 8% of your gross turnover.
Success and growth
How successful are some of the franchisees today?
The average full year franchise turnover of Driver Hire offices in 2017/18 was £1,180,450 (over three times the UK franchise sector average, according to the 2015 bfa NatWest survey).
50% of our franchised offices had a turnover of over £1m and 15% exceeded the £2m turnover mark.
How is the brand looking to grow?
Driver Hire is continually looking at ways to grow and develop the business.
Our aim is always to stay ahead of the competition and provide products that our customers want, along with tools that our franchisees and their staff can benefit from.
With a new level of investment and entrepreneurial spirit Driver Hire opened its first office in Australia in February 2012 and now has five offices operating successfully over there.
In the past seven years, we also launched a new training division. This service is an additional revenue stream for franchisees to make more money and brings the brand to an even wider audience.
2013 saw the introduction of a new e-Services brand and range of online products and services which include online learning and our web-based licence checking service called ‘dh Licence Check’.
What is the potential of the business?
Low fixed costs mean franchisees that follow the system and operate their business effectively can take home 11-14% of turnover and build a significant capital value as their business grows.
The average net profit for a single Driver Hire franchise territory in 2017/18 was over £120,000.
What will the challenges be in achieving that?
Driver Hire is a B2B sales franchise and the business will need to be continually proactive to generate sufficient sales to grow and succeed.
Whilst our franchisees don’t need a background in logistics or recruitment, a head for business and the ability to build relationships with your customers and candidates is a pre-requisite.
We pride ourselves on the support we give our franchisees in all areas of the business and each franchisee is allocated an area development manager.
What awards has the business won?
Driver Hire is an award-winning business and has been a bfa HSBC ‘Franchisor of the Year’ award winner five times. It’s the most prestigious award in the UK’s franchising calendar and Driver Hire has been shortlisted as a finalist twelve times out of the last thirteen years.
A number of our franchisees have also won bfa HSBC ‘Franchisee of the Year’ awards and nominations – well deserved national recognition for the hard work and effort our franchisees and their team make.
We were also a finalist in the 2013 and 2015 Franchise Marketing Awards and an award winner in 2016. Judged by an independent panel of experts, the awards recognise franchise businesses that have raised public awareness and achieved sustainable growth.
To what extent are the founders involved today?
The founders, Mark and John, are no longer involved in the running of the business.
Finally, is the company a British Franchise Association (BFA) member?
Driver Hire is a full bfa member.
We are also members of the REC – Recruitment & Employment Confederation, RHA – Road Haulage Association and are Investors in People.