Starlog boldly blazes a trail

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The Independent Online
THERE seems to be no limit to the ingenuity of the franchise sector. Just when you thought that the potential list of business formats to be exploited had been exhausted, along comes another.

Boldly going where no one has apparently gone before is Starlog, which claims to be the first franchised retail operation in the UK to sell licensed character merchandise from science-fiction and fantasy films, television programmes, comics and videos, such as Star Trek, The X-Files and Batman.

Starlog, which has its roots in the publication of a magazine of that title in the United States in 1976, entered retailing with the opening of a shop in New Jersey in 1992. Previously, merchandise had been offered through mail order in the magazine.

Since then nine more branches have opened in the US and the concept crossed the Atlantic in December 1994 with the opening of a company store in the Bentalls shopping centre in Kingston upon Thames. A second outlet, in Cardiff's Queen's Arcade, opened a year later.

The first franchised operation in Britain also appeared at the end of last year, in The Glades shopping centre in Bromley, Kent, and Starlog is looking to build on that.

It claims that in return for an investment of pounds 50,000 it offers a potential annual return of up to 45 per cent, free training for franchisees and their staff in the first year of trading, and advertising, PR and marketing support.

Developments such as this explain why the franchising sector continues to expand. The latest annual NatWest/British Franchise Association survey says the overall turnover of the industry is about pounds 5.9bn, a 7 per cent increase on 1994, while the number of business format franchising systems grew to 474, up by 14 per cent.

Peter Stern, head of NatWest UK's franchise section, said that the proportion of franchisees reporting profitable results in 1995 had increased again, from 87 to 90 per cent.

"A further notable aspect is the growing maturity of the businesses, with franchisors operating their system an average of nearly eight years and franchisees operating within the system for six years on average," he said.

The industry sees evidence of increasing numbers of companies choosing to use franchising to expand.

The 25,700 individual franchised units are also expanding, to the point where they employ more than 220,000 people - more than the whole of the energy sector and almost as many as the armed forces, points out Brian Smart, who is director of the British Franchise Association.