When investing in a business there are always costs, set up costs and ongoing costs and also your time and energy. In this article Sarah Cressall, founder of The Creation Station, board member of the British Franchise Association, Best Selling Author, Multi-Award-Winning Entrepreneur and Speaker, shares considerations to help understand the costs involved when investing in a franchise in the UK.
Running a business isn’t for everyone and franchisors are very selective about who they empower with their brand. They will have years of experience of the key qualities that make a successful franchise owner. I know we are talking about how much does it a franchise cost, but the cost doesn’t just include financial. If you are approved to take on a franchise, there is considerable time and effort required to run a successful franchise. Some franchises offer a flexible approach to working hours others require fixed hours.
- The Creation Station franchise model is flexible. This enables you to choose the type of creative activities you want to run and also the days and times you run them. You are supported to take on staff if you want to, but you don’t have to. This means that your business can be tailored to your own commitments and aspirations with the support of the UK's leading creative activity company.
Why is it called investing and not buying?
A franchise is not something that anyone can just buy. As mentioned it needs to be the right fit for you and the franchisor. A franchise is not a regular purchase, it is an actual investment.
How this works in practice is that the money you invest in your business at the beginning, in theory, should grow as you develop and grow your business. With any ethical franchise, you will receive initial training plus ongoing training and support. Typically, you also receive an exclusive territory to operate. In five, ten or more years time, If you decide to exit the business you can sell your business on at a higher price than you paid it for. This way you get back your initial investment, with profit, having taken an income whilst running your business.
It’s a bit like planting an acorn. We all know acorns have the potential to grow into big Oak trees. But this only occurs if they are planted and receive the right care and attention that they need. Because a franchise is part of a bigger business, it's like it's in a forest of Oak trees. Your franchise, therefore is a proven model, with all the ingredients available to succeed. This also means that as well as your work on your franchise, you have the Franchisor and the company developing and growing as well.
- When I started Creation Station in 2002, we provided just one type of income stream this was LIttle Explorers and there was no internet like there is today. Due to demand and investment from Creative Hub (Head Office) we developed over TEN further revenue streams including retail. Plus we now have a state of the art website with online bookings and a management system. This has streamlined all our processes and provided extra value to every franchise partner.
Dedicated Wholesale Craft Supplies
Ensuring customer safety and the quality of the customer experience are critical to the success of any business.
That's why at Creation Station we take the safety, quality and availability of the materials and tools we need very seriously.
We have two warehouses so that you have access to over 10,000 quality art and craft supplies to use in your activities. (We LOVE our warehouse and can get a bit carried away sometimes!).
You receive a special wholesale login to our extensive online shop. You have special access to this and extra Creation Station products. This means you can purchase your craft and business supplies from here at a discounted rate. You pay a small monthly amount which is credited to your account and this can be used at any time. You also receive loyalty points on all your purchases too.
As mentioned investing in a franchise is not just financial, it requires, time, effort and energy and application of the proven business model to achieve success.
Franchises do vary in cost from a few thousand to millions depending on the type of business and territory.
- At Creation Station, we provide a bespoke franchise model to suit the individual needs of our prospective franchise partner. This is quite unusual but we know that everyone is different and have different needs and aspirations and so we have tailored our model to work for our franchise partners.
- We provide a choice of one, two or three licences to choose from. We also create individual exclusive territories based on the areas that you want to operate in. This means you can run the activities in the location that YOU want to. Some of our franchise partners have large areas running one or two licences. Others operate in smaller areas, but maximise all the income streams and the cross-selling that comes with this. One franchisee has planned for 10 after schools per week with a turnover of £60,00 per year just during 30 weeks. Another focuses on regular adult craft workshops @£25/ head with an average of 20 participants, these work both face to face and online. So each franchise partner has the support and flexibility to operate their business around their own needs and aspirations.
- You can get a full understanding of the potential return on investment and income when you attend a Discovery Event
When you invest in your own Creation Station you are investing in an established, award-winning and supportive business. Here are a few of our awards:
You can choose, one, two or three of The Creation Station licences. These are as follows:
- License to inspire families
- Licence to inspire within education
- Licence to inspire adults
For more information on the licences please read The Creation Station franchise information pack
If you have already read this and would like to find out about options and territories, let's chat!
For other franchises, you will need to contact the Franchisor for specific costs. Do ask for all costs associated and check if there are any additional costs.
Here are the costs for a Creation Station franchise:
As well as the initial investment, we've also included the monthly management fee, and typical costs of supplies so you are fully aware of all the costs. All prices are plus vat.
- Investment for one licence starts at £5,000. This includes £1666.67 worth of start-up materials. You have a monthly management service fee of £100. For your craft supplies you pay £50 into your shop account each month.
- Investment for two licences starts at £8,000. This includes £1666.67 worth of start-up materials. You have a monthly management service fee of £150. For your craft supplies you pay £66.66 into your shop account each month.
- Investment for three licences starts at £11,000. This includes £1666.67 worth of start-up materials. You have a monthly management service fee of £200. You pay £83.33 into your shop account to use for crafts supplies.
You will have other costs such as insurance and marketing. We can advise you on these costs. (For many of our franchisee partners this also includes buying sparkly shoes!)
It’s important that you also have funds available for working capital. We recommend a minimum of £1000.00. You also need to have a way of supporting yourself financially whilst your business develops.
Help to run your own Creation Station franchise
Find The Right Option For You
You can choose what activities you’d like to run and also the perfect areas to run your business. We will help you explore the options and develop the perfect business model for you.
Help With Financing Your Franchise
Most people don’t have £1,000’s spare cash to invest in a business. That’s why start-up loans were invented! We help you, subject to status, secure 100% if the fund required, with no personal guarantee.
Support To Develop & Grow
Most new franchise partners have never ran a business before. You can rest assured that you will receive the training and on-going support you need to grow and develop your business at a rate an pace that work for you and your commitments.
Banks are generally very supportive of investing in a franchise as it is a proven and tried and tested business model.
"Approximately half to two-thirds of new businesses fail within the first three years of trading but, because franchisees have the benefit of a tried-and-tested business model and access to a support network, failure rates remain extremely low, with only 1% per year closing due to commercial failure". British Franchise Association / NatWest Franchising Landscape Report 2018.
We work with a number of banks and businesses that can help you with business start-up loans including Natwest, HSBC, Virgin, Biz Britain.
As Creation Station is a proven franchise model, some of the assessment with our financial partners has been pre-authorized.
Banks often require at 30% deposit but some start-up loan companies don’t require a deposit which can help you to start up your business with Biz Britain
Subject to status Biz Britain can provide business loans as follows
- 6% APR
- No deposit required
- No personal guarantee.
You are required to provide a business plan and cash flow. We can support you with developing these specific to your local region.
Return On Investment
Now you know the costs of your business investment, I'm sure you are asking "What are the likely returns on my investment - how much can I make"
We don't claim to be a get rich quick scheme. This is a business, like any, that you get out what you put in. Typically franchise partners get a return on their investment within eighteen months. Many have paid off their loan much quicker and some within six months or less.
However, it's important that you know we can't guarantee what income you can make. We can, however, support you to run a proven and successful Creation Station franchise.
Some of our Franchise partners turnover (i.e. money that comes into their business) over £50,000+. Some franchise partners turnover is in the region of £8,000. Some work full time and take on staff, others enjoy running three classes a week.
We go into more details on how much time you have to commit to your business and how much you could potentially make in our Discovery Event and in a follow up one to one. This is very important and will help you make the decision on whether its right for you or not.
Check out the next dates and time for your online Discovery Event.
If you have been to Discovery event or are booked in for one, and you would like to look at area options and discuss licences you can book in a 30-minute one-to-one chat.
What’s been the Impact of COVID?
All businesses have had to review services and processes during the pandemic. When researching the right franchise for you, do ask the Franchisor how their franchise model has adapted.
At Creation Station, we’ve been fortunate that:
- Our franchise model is flexible. As a creative company, we have been able to innovate and adapt quickly.
- As well as entertainment we provide much needed educational classes, clubs and workshops.
- Demand for activities for children has increased as parents looked for things their kids would enjoy.
- Demand for wellbeing and social activities online has also increased.
We’ve adapted our activities to be delivered online with craft packs supplied. Where it is safe and appropriate to do so, we run safe face to face activities with COVID secure measures in place.
On top of our usual support, we’ve increased our support to our franchise partners so they can continue to operate safely.
Here are some of the ways we are helping our franchise partners:
- Financially – fee-free periods and reduced fees
- New session plans and training to deliver activities online
- New development of selling health and safety compliant craft packs
- New documented processes, session plans, products and training to deliver safely face to face.
- Website developments to create waiting lists for oversubscribed classes.
Sarah Cressall BSc (Hons) Dip Art
Amazon number one Best Selling Author, Multi-Award-Winning Entrepreneur, Speaker, Founder and Managing Director Of The Creation Station.
Some of the recognition and awards we've been privileged to receive:
- Board member of The British Franchise Association
- Member of The British Franchise Association
- Ranked: Top Ten Most Powerful Women In Franchising 2019
- Ranked; #15 Top Franchises in the UK – Elite Franchise – Global Franchise 2019
- Winner Most Supportive Franchise and Top Franchise Award – Working Mums 2018
- Winner Sylvia Anderson Award for Creativity 2018
- Winner Best Franchise Children’s Services – Best Franchise Awards 2017
- Winner Best Website – Franchise Marketing Awards 2017
- Winner Excellence and Innovation – Children’s Education Services 2017
- Finalist Richard Branson’s Impact Award 2016
- Winner Best Creative Play Award 2015
- Finalist Festival Supplier Awards 2015
- Winner Entrepreneur of the Year 2013
- Finalist Business Woman Of The Year 2012
- Winner Best Woman Franchisor UK 2011 - EWIF Awards
- Winner Best Franchisee Marketing Support 2012
- Winner ‘Crème de la Crème’ Business Award 2011
- Winner 'Best Interactive Business' Award - Mumpreneur 2011
- Finalist ‘Extraordinary Woman of the Year’ 2011
- Business Woman of the Year 2009 - Women of Achievement Awards Leicestershire
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