Case Study: CeX
Back in the 1990s, when entertainment products were entering a new era of technology, a group of friends – who were tired of paying hefty prices for entertainment goods and gadgets – decided to start their own business that would offer second-hand oldies-but-still-goodies at knockdown prices. That was the start of the entertainment company, Complete entertainment eXchange (CeX).
One of those ambitious individuals who dreamt up CeX was Hugh Man, who still works closely with the company as Franchise Director. Since establishing the first CeX store on Tottenham Court Road, London, in 1992, Hugh and his fellow founders have watched their business grow into an international success.
Decision to Franchise
In 2005, the company’s Directors decided to franchise their proven and increasingly popular business model with Ashtons Franchise Consulting (AFC). When CeX launched its franchise opportunity, its aim was to open 100 stores within five years – a target that was successfully achieved and exceeded. CeX’s intention was to expand with corporate stores and franchised stores operating in tandem. This strategy in the UK has allowed CeX to accelerate its overall expansion from 25 stores in 2006 to 169 in 2012.
Management & Financial Issues
All CeX locations are carefully evaluated so that franchisees can obtain maximum turnover and a good level of profitability. Franchisees, therefore, have an opportunity to draw a good salary, as well as build up excellent equity in their portfolio. To ensure new CeX franchisees get their business off to the best start, they receive dedicated support from a CeX Franchise Manager; they help with every aspect of the business set-up, from assisting with funding and finding suitable premises to the official store launch.
Attracting New Franchisees
Over the years, the buy, sell or exchange concept of the CeX business model has attracted franchisees (through AFC), from a variety of backgrounds, all of who share the CeX passion of providing quality entertainment goods at affordable prices. The CeX business tends to attract passionate, hardworking men and women from diverse backgrounds.
With the CeX business model continuing to thrive in both good and bad economic times and proving to be increasingly popular with the conscientious shopper, the future looks bright for CeX franchisees.
Hugh Man, Franchise Director, comments: “I was very excited about franchising CeX, as we had been preparing for the moment when the business was mature enough to replicate. It has been a steep learning curve but a fascinating and exciting journey.
“We’ll continue to grow the brand across the UK, Spain, Ireland and beyond. CeX corporate stores have expanded to the USA and India, and franchising in these territories is the next step. We also intend to look for new Master Franchisees in new territories.
“Franchising a successful business model must not be taken light-heartedly or as a sideline occupation, as it requires full-time dedication along with professional advice, hard work, lots of support and a significant budget for marketing and other costs.”
Tags: Business, CeX, Corporate, Franchise, Franchisee, Franchising
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