Joel Libava is the Franchise King, an internationally-renowned expert in the world of franchising. We’re grateful to have worked with Joel before on our guide ‘What is a Franchise?‘.
We caught up with him to ask him some big questions like ‘Are vending machines a good investment?’ and to see what he’s up to at the moment. Here’s how our conversation went. (more…)
Scottish businessman Jim Tarvet was in need of a new career at the age of 60, after the closure of his electronics business. Five years on he operates over 230 Tubz vending machines.
Tubz: Before you decided to invest in a Tubz bundle, what was it that you were looking for? What kind of opportunity?
Jim Tarvet: Well, I’d had an electronics business for nearly 30 years and the end was a bit of a disaster, really. At the height of the business I was employing about 20 people and then the electronics industry decided to leave the UK. So I was losing customers every month and I went from 20 people down to 4 at the end.
I managed to wrap it up without going bust, but it wasn’t a very pleasant experience. Making people redundant is horrible. So at the ripe old age of 59 or 60, I managed to salvage a few quid out of it but not enough to sail off into the sunset. So I looked around at franchises thinking ‘I’ll just buy a little business out of a box’.
T: Why did Tubz appeal to you?
JT: What attracted me to Tubz was several things:
1) It’s a cash business so no chance of companies going bust on me.
2) No employees. You know, just working on your own and no premises, no rent and rates. Just working from home appealed to me.
T: Why was Tubz a better option than other franchises for you?
JT: When I looked at all the franchises, a lot of them are what I would call a van-type franchise, where you pay 50 grand or something and you get a van and a bunch of leaflets. What I liked about Tubz was I could start off for less than 3 grand, so it didn’t seem like a big risk.
T: Was it easy to make the decision to go with Tubz?
JT: I still thought it sounded too good to be true so, having spoken to John Bailey a couple of times I jumped on a plane and went down to have a look at the place.
I’ve visited a lot of offices and factories in my time and I’d like to think I can tell quite a lot when I visit. You know, the usual thing is you go into a place and there’s loads of big Mercs in the car park and they don’t let you past reception, and you wonder what’s going on in there. With Tubz, there was none of that at all.
I got a complete tour of the whole place and what impressed me was where the money is. The money’s in the stores, stacked with product; floor to ceiling. The people are enthusiastic and keen and have nothing to hide. And I thought ‘This is good. Good atmosphere.’ I like John and Simon, just real ordinary people.
I went ahead on the day and I bought the bundle of 10. I put them all out there and everything they said was true so I bought another 10, and then another 10, and then another, building it up.
Jim with his campervan which also functions as his mobile office
T: How many machines do you have now?
JT: At the moment I’ve got about 230-odd. I’m not out to take on the world; I’ve done that. Been there, done it. So I’m quite happy with it. I might take on a few extra machines or I might not.
T: Is that just yourself looking after those machines?
JT: Yes, I’m not employing anybody, I just do it myself. And I can do it usually working 4 days a week.
T: Who was involved in the decision-making process when you decided to go with tubz?
JT: I discussed it all with my wife and she had a few questions. But it was basically me.
T: And you said you liked Tubz because of the company’s transparency and the people working for it?
JT: Yeah, the quality of the people. They were keen, enthusiastic. John’s great, he’ll go the extra mile for you. He’s very helpful, very reliable.
And the thing I was saying about the stores being stacked full of product; I order a pallet of product every month. Last month I think it was about 70 boxes. I’m up in the middle of Scotland and and they’re in Kent. I’ll order it on a Monday and on Tuesday, bang, the pallet appears.
All the product’s there. There’s no shortages. There’s no ‘oh, we’re out of stock of that or this’.
Jim working in his mobile office
T: How long did it take to get up and running in the first place, when you got your first bundle of 10?
JT: Within a week I had about 3 sites and within the month, or about 3 weeks, I had 10 sites and ordered another 10, so it was quite quick.
Actually, the mistake I made, I was probably a bit too cautious in the beginning. I had the money left over from the business. I coulda just bought a couple of hundred machines and gone out if I’d had the confidence, but I was just being a canny Scot.
But I started to see cash after about 2 weeks.
T: Did the set-up meet your expectations? Did it go smoothly?
JT: Oh, yeah. There’s no major problems at all. The key to this whole business is getting good quality sites.
What I’ve found is you have to be quite ruthless. If you’ve got a site and you’re only getting an average £2 or £3 a week that’s no use. Take the machine out and get it re-sited. That’s the key to this.
I’ve brought over a couple of people up here who started off either with Tubz or with their competitors and they maybe buy 10 or a dozen machines. They get frustrated with it. They lose 2 or 3 sites, or they’re poor quality sites and they give up.
And often you go see these people and they say ‘I’ve got 12 machines for sale. You want to buy them?’. ‘Yes, okay. What’s the sites like?’. ‘I’ve only got 3 or 4 sites, the rest of them are in my garage.’ You’ll never make money if the machine’s stuck in your garage.
T: How do you find the sites? Did you do it yourself or did you get some help from Tubz?
JT: Tubz found most of my sites. I’ve used other site finders but, to be honest, I keep coming back to Tubz. They’re good at it, they’ll get you good sites. And that’s the key to it all.
T: So now you have 230 machines, what kind of income do you bring in from that many machines?
The actual turnover is about £71,000 this year.
T: How challenging is the general day-to-day running of the business for you?
JT: I wouldn’t say it’s challenging. You come across problems. You walk into a site and somebody says ‘I don’t want that machine anymore, take it away’. That’s the biggest problem you get.
Compared to when I was running the electronics business and the hassle I had there. It’s pretty hassle-free, I would say.
T: Is it just what you were looking for after that stress?
JT: Yes, it’s proved to be exactly what they said it was on the tin.
You can also find Jim’s testimonial here.
Lorraine Church is a mother of two from Gravesend. She has been operating with Tubz for two years and is now fully self-employed, giving her the freedom to work her own hours and spend time with her family.
Before you decided to invest in a Tubz bundle what was it you were looking for and why?
I worked in sales for various retail companies but wanted the chance to work for myself and earn money for myself, and also to have the flexibility that brings.
What other options did you look at and why did you choose Tubz over them?
I looked at other franchise opportunities with larger vending machines but they cost from £10k-15k and I didn’t have that much money to invest.
With Tubz I could invest in the 10 unit bundle and that allowed me to dip my toe in the water without risking a large amount of money.
And the team at Tubz were really supportive and didn’t put any pressure on me to invest in more. They suggested I try the 10 units and see whether it worked for me.
Who was involved in the decision-making process?
My sister came with me to meet the team at Tubz to give a second opinion but I’d pretty much made up my mind already, having looked at a number of opportunities.
What was the most important thing when evaluating your options?
The most important thing was the cost and the flexibility, as I have kids and wanted to be able to work my own hours and work from home most of the time. Especially in school holidays with the cost of childcare.
How long did it take to get up and running?
Literally a week. My sites were set up in that time and the next week I was collecting cash from my 10 machines.
Did that process meet your expectations?
The setting up process was really easy and the guys at Tubz were great. They were really supportive and helpful and there was no stress at all. And then further down the line if I had any doubts or questions they were always there to help and were always really nice too. I really can’t speak highly enough of them. Honestly they’re not paying me to say this!
How easy was it to find suitable sites for your machines?
I found some sites myself and I paid for Tubz to find the others for me, which made things really easy. I also bought two existing rounds from people which meant they were already successful and making money.
Have you subsequently invested in more machines? What kind of income do they bring in?
Within a year I’d bought a total of 40 and now I have over 60, after being with Tubz for just over two years. Income does vary across different sites and seasonality affects things too, but on average I bring in around £400 to £600 per week gross. This meant I was recently able to become fully self-employed after weaning myself off employment.
How has your Tubz franchise affected your life?
It’s made my life a lot easier! In my sales jobs I was on the road all the time and much of the work was London-based, and I had much less time for my family and myself. Now I earn money for myself and spend more time with my kids. I’ve got a much better lifestyle now and I’m now one of those people who can say I really love my job.
How challenging is the day-to-day running of your Tubz business?
Not challenging at all! It’s been a bit of a learning curve but now I have my route sorted between my sites and I know my audience and what they like, it’s really not hard. And I had no experience before two years ago.
What are your business plans and goals?
My goal is to have 100 machines. I think that would give me a nice income but I wouldn’t have to deal with the complications of employing anyone else. But when I get to 100 maybe I’ll think I could handle 110, or 120…
Welcome to November’s Tubz Vending roundup. Every month the Tubz Vending franchising experts keep tabs on the best, brightest and most useful blogs, articles and online resources in the industry on the web. When it’s time for our monthly roundup, we hand-pick the very best bits from our bookmarks bar to help you learn a little more about franchising, help inspire you to explore our world and to give you a few tips and tricks of the trade.
This November: Find out how franchising can put you on a fast-track into business, get a lesson on the ten steps that go into buying a food franchise and find out why entrepreneurs may not make the best franchisees…
Franchising: A Clever Route Into Business?
It can take years or even decades to build a successful business from the ground up. But going into business doesn’t just take time it also requires contacts, resources, stamina, acceptance of failure, grit…you name it. In short, starting your own business is tough. Which is why franchising presents a very interesting option to individuals keen to run their own business and enjoy the freedom and autonomy this provides without the steep on-ramp that comes with starting an independent business.
In this article published on the GSM London blog, Andrew Falconer explores the usefulness of franchising as an alternative route into business – and makes some very interesting points. Read the piece online and share your thoughts below.
Do Entrepreneurs Make Bad Franchisees?
Here’s an interesting post from Platinum Wave. In this article, the author shares some information about franchising and a franchisee’s personal success story, but also makes an unusual point: entrepreneurs don’t necessarily make great franchisees.
Instead, the article argues, individuals from very different, non-entrepreneurial backgrounds are often highly successful as members of a franchise. In this case an ex-police officer’s natural skills and approaches are shown to reap dividends in a franchising context. The reason? According to this post, entrepreneurial spirits like to challenge and change.
How to Buy a Food Franchise
Thinking about taking the plunge and buying a food franchise? Hold your horses. Don’t do anything until you’ve read this quick guide to franchise buying from Sherrards Solicitors.
In this helpful guide , experienced franchise lawyers Manzoor Ishani and Leigh Head guide you through the ten essential steps to work through when buying a food franchise, from choosing between service and retail franchising, to acquiring a premises.
Do you have any advice to give those considering buying a food franchise? Do you think entrepreneurs make bad franchisees? Share your thoughts with other readers below or get in touch today with our franchising team via info@tubzbrands.co.uk
Welcome to October’s Tubz Vending roundup, our dedicated spot for sharing news, ideas, how tos, handy resources and interesting information from the world of franchising. Every month our team of franchising experts collect their favourite recent posts from across the worldwide web, and each month we choose our favourite pieces to share with you. Stand by for handy tips and franchising insights…
This month: discover how and why to avoid the “absolute discretion” trap, get to grips with performing due diligence before signing up to a franchising opportunity and learn why the number of female franchisees is now on the rise.
Beware the Absolute Discretion Trap
Any franchise agreement requires serious attention, from franchisers, franchisees and both parties’ legal advisors. Yet, if your franchise agreement includes phrases like “absolute discretion” or “sole discretion”, the agreement requires even closer study – and potentially review. Why? Because these expressions could spell serious trouble with little or no recourse to rulings from arbitrators, mediators or the courts.
Giving sole discretion to a franchiser is a very dangerous abdication of power for franchisees, handing over complete control and the final say to the franchise in question in every single instance. Instead, phrases like “reasonable discretion” and “consent will not be unreasonably withheld” point to a healthy future relationship between both parties. Before you sign anything, get to know the issue. This blog published on the AAFD website will help you to familiarise yourself.
A Helpful Guide to Franchise Due Diligence
If you listen to proverbs and old wives’ tales, you’ll know all too well that “fools rush in”. In very few instances in life is this more true than when you’re considering investing in a franchise. This excellent blog post from McColm Matsinger Lawyers may cover franchising in Australia, but a great many of the lessons about performing proper due diligence before jumping in feet first with a franchise are applicable both worldwide and in the UK.
From researching the opportunity, to reading all paperwork thoroughly and talking to other franchisees in the system, this blog put together by Christine Matsinger is full of helpful pointers, good advice and some very valuable “dos” and “don’ts”.
US Female Franchisees On the Rise
Surprised businesswoman looking at laptop pc, astonished woman with shocked face and open mouth.
In a trend we’re confident is also reflected on British shores, The UPS Store franchising blog has shared the news that the number of female franchisees in the States are on the rise. Data accessed via the 2015 State of Women-Owned Businesses Report shows that almost 30% of all US business are now female owed, with 9.4 million women-owned businesses now operating in the country. Get the full story here.
Do you think that female franchising is on the rise? Are you a woman with a franchise? We’d love to hear your thoughts. Share them with other readers below or get in touch today with our franchising team via info@tubzbrands.co.uk
