Inside Business: Fortune smiles on the fun house
A former teacher started a business selling educational games, and the market swung in her favour
Sunday 21 March 1999
A former teacher, she got her brainwave looking for high- quality products combining fun with a serious teaching purpose. She resolved to find the sorts of toys she had in mind and sell them herself - and so Formative Fun was born, back in 1991.
Now Formative Fun has 11 franchised outlets and three company-owned stores in England and Scotland, as well as a master franchise licensing deal in the Republic of Ireland. The toys, for children up until the age of 16, is also sold by 50 home-based distributors. Turn-over is about pounds 2m.
When Ms Warren started, she was worried that would-be customers would not see the difference between what she was doing and the already well- established Early Learning Centres. She began working from home - and did not open her first two retail outlets until 1994. Even then, they were an 18-month pilot programme.
It seems that she need not have worried. The increasing emphasis put on education by politicians and business people has created a strong market for educational toys and games, says Ms Warren.
"The National Curriculum has created new priorities within schools, with particular emphasis on literacy and numeracy. We have selected games to support this," she says.
But Formative Fun does not just cater for conventional requirements. The company's range includes toys and games aimed at those with dyslexia or other learning difficulties.
Although there are some men in the operation, Ms Warren believes that running the outlets is suitable for women like her who are seeking to combine a career with raising young families. Many of those she has taken on have worked in the professions, but do not want to be confined to conventional nine-to-five hours.
"It fits in well with family life," she says. "But we do far more than provide a cash-and-wrap service. Product knowledge is crucial, especially as things are constantly changing in education," she adds.
Moreover, franchisees are expected to be able to demonstrate the products and games in the shops and also visit schools and playgroups to explain the idea. To help them with this, Ms Warren trains franchisees, employees and distributors so that they understand how each product relates to a particular stage of child development and are thus able to advise customers on the suitability and use of products.
Now that the idea is becoming better established, Ms Warren is looking for further franchisees to help take the number of outlets to about 20 in the UK by the end of this year. There are also plans to take the figure up to about 50 in Britain as well as to expand into other English-speaking countries apart from the United States.
Typical start-up costs are about pounds 30,000, including franchise fee, training, stock and shop-opening costs as well as working capital. Would-be franchisees are recommended to have at least pounds 10,000 of their own money saved; financing for the balance is available at preferential rates.
Annual turnover at outlets is reckoned to be between pounds 100,000 and pounds 200,000 de-pending on the town and such matters as rent costs.
However, it is also possible to become part of the company by signing up as a home-based distributor, which requires an initial investment of about pounds 300 in return for a starter kit of stock and two days' basic training.
With education attracting its current level of interest, there seems to be plenty of reason why Formative Fun should thrive and prosper, and achieve its targets.
Those seeking more information about the Dorset-based company should visit its stand at the Wembley Franchise Exhibition next month.
n Formative Fun can be contacted on 01297 489880.
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