Franchisor’s Perspective: Navigating Economic Challenges Successfully
Your franchise is booming, despite the current economic crisis. Why do
you think that is and can you share any insights into how your franchise
system selects and supports franchisees who are better equipped to
navigate economic challenges successfully?
In the face of a persistent difficult trading landcape, Geek Retreat, a UK-based game store
franchise has proven resilient. The CBI reported retail sales volumes in the year to July fell at
the fastest pace since April 2022 (weighted balance of -25% from -9% in the year to June).
Sales were expected to fall even more quickly in August (-32%). However, at Geek Retreat
their ‘Average Revenue per Store’ metric broke records in June, July and August – making
the summer the most successful trading period of the year so far.
In this article, we delve into the reasons behind this success and explore how the franchise
system selects and supports franchisees adept at navigating economic challenges.
- A Resilient Portfolio of Stores
Geek Retreat’s journey through economic turbulence has involved a period of
rationalisation, sadly resulting in the closure of certain stores. These closures were
attributed to various factors, including anti-social behaviour, unattainable lease agreements,
franchisee health and poor trading.
The remaining stores in the portfolio have proven robust and resilient, having faced and
overcome multiple obstacles. These stores have not only survived but are now trading
positively due to their unwavering commitment to the Geek Retreat model and their loyal
communities.
- Community-Centric Approach
At the heart of Geek Retreat’s franchise success lies a focus on the communities they serve.
These stores offer a safe haven where people with shared passions can convene, fostering
lasting friendships. This community-centric approach has not only solidified customer loyalty
but has also made Geek Retreat an essential part of people’s lives, even during the cost of
living crisis.
- Personal Commitment and Innovation
Geek Retreat’s unique owner-operating franchise model, with 32 franchisees managing 37
stores, underscores a personal commitment to innovate and invest in local communities.
This commitment sets the franchise apart and drives its ability to adapt to changing
conditions.
- Unwavering Support
Supporting franchisees is a top priority for Geek Retreat. The franchise has developed a
comprehensive support package comprising resources, advice, and training to help
franchisees navigate challenges, avoid store closures, and return to profitability. This
support was recently extended to include a central buying function that negotiates better
terms and stock allocations with key publishers, ensuring the franchise’s competitiveness in
a tight market.
Additionally, Geek Retreat has partnered with Two, a trade credit provider, to help
franchisees to manage cash flows during peak stock purchasing periods, providing
franchisees with financial stability.
- Customer Loyalty and Feedback
The unwavering loyalty of Geek Retreat’s customers is a testament to the franchise’s
resilience. With an impressive Net Promoter Score (NPS) of +84, higher than even tech giant
Apple, it’s evident that customers appreciate the unique experience Geek Retreat offers.
In conclusion, Geek Retreat’s ability to thrive in challenging economic conditions can be
attributed to a combination of factors: a robust portfolio of community-centric stores, a
personal commitment to innovation, and an unwavering focus on franchisee support. It’s a
testament to the strength of their franchise system and the resilience of their franchisees.
Franchisee’s Perspective: Adaptation during the Cost of Living Crisis
During the cost of living crisis, have you observed any shifts in customer behaviour or
preferences, and how have you adapted your franchise operation to meet these changes?
Stewart and Laura Brass, owners of a Geek Retreat store in Sunderland, offer insights into
how the franchise operation has adapted to changing customer behaviours and preferences
during the ongoing cost of living crisis.
- Embracing Experience-Centric Shopping
One notable shift in customer behaviour observed during the cost of living crisis is the desire
for a more experiential visit to the store. Customers are no longer solely looking to purchase
products and leave; instead, they seek a place where they can spend quality time. Geek
Retreat’s model, which includes opportunities for socialising, learning new games, and
enjoying café facilities, aligns perfectly with this trend.
- A Second Home for Hobbies
As people invest more in their hobbies to cope with economic challenges, Geek Retreat
stores have become a second home for customers. Friends regularly meet in-store,
embracing the core value of community that Geek Retreat promotes. This sense of
belonging and camaraderie has become increasingly vital during times of financial
uncertainty.
- Appeal of Alcohol-Free Social Spaces
Younger customers, in particular, have shown a shift in behaviour during the cost of living
crisis. An alcohol-free social space is now more appealing than ever, aligning with Geek
Retreat’s inclusive and family-friendly environment. This shift has expanded the franchise’s
customer base and solidified its role as a community hub.
- Expanding Product Offerings
To cater to evolving customer preferences, Geek Retreat has expanded its product range
offerings. Recognising that some product categories no longer sell as well as they once did,
the franchise now provides a wider selection of stock in-store, ensuring a continuous
conversion of shoppers to buyers. This adaptability ensures that customers find what they
need while supporting the franchise’s sustainability.
In conclusion, Stewart and Laura Brass’s experience as Geek Retreat franchisees in
Sunderland illustrates the franchise’s ability to adapt to changing customer behaviours
during challenging economic times. By embracing experiential shopping, fostering a sense of
community, appealing to younger demographics, and expanding their product offerings,
Geek Retreat remains a thriving and adaptable business in the face of economic uncertainty.
