How we restructured to keep our franchisees in business


The rate of growth of FunkyDiva Music relies heavily on the ability to expand our regional network of partner franchisees. Customer bookings come from all over the UK and we therefore need a good geographic spread to make meeting booking requests financially viable.

We were launching to the market at the time the effects of the credit crunch were really starting to kick in. We needed to come up with a new financial proposition that attracted franchisees to the business rather than scared them off.

The challenge

Originally we had planned to use leasing finance to sell the individual juke boxes to our partners. We managed to get several leasing companies behind the concept, and even get a couple of our initial financing requests approved, but the finance conditions on the deals were tough and had a huge APR.

We knew that in order to have a fighting chance of the business taking off, we needed to change the strategy to be able to dramatically improve our sales.

The solution

We decided that if we were going to succeed during a recession then we would have to be creative and take some risks.

We were fortunate that our first couple of partners were strongly behind the concept and had some spare cash. We were therefore able to agree a payment plan that involved an initial large lump sum payment and then ongoing monthly payment. While this had an adverse effect on our own cashflow, it allowed us to grow and gave us a base from which we could build upon.

This led us to adapt the whole model for our partner offering and we made staggered payments a standard part of the deal. By making these changes we produced a business proposition that was more attractive to smaller investors, making us one of the most affordable franchise businesses in the UK.

This is clearly not a sustainable long term business solution though and as the recession starts to ease we are able to start looking at the leasing option again. We have several offers from leasing finance companies who want to provide us with finance for the partners.

Key lesson

The solution we came up with allowed us to survive the worst of the credit crunch whilst enabling us to grow. As a result we can now deliver the FunkyDiva to most of the UK, although we are still looking for dedicated partners in some very important parts of the UK. We learnt that we could grow our business in a recession, as long as we were willing to make tough decisions and see the bigger picture.

Top tip

Business conditions are going to remain tough and recessions will always come and go, but if you are able to change and experiment with what you can without endangering your key value proposition, then it is possible to grow a business in difficult market conditions.

Find out more about FunkyDiva Music UK Ltd

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