Being part of a franchise brings obvious benefits to those new to running a business, but the two owners of Kütchenhaus’s 60th store in Sheffield were already experienced in the KBB market. So what attracted them to go down this route? Chris Frankland visits James Teehan at the new store to find out more
As I enter the Kütchenhaus Sheffield store in Greenhill, fitters are still putting the finishing touches to the last couple of displays. Everything looks shiny, pristine and immaculate.
I am visiting Kütchenhaus’s 60th store to find out what attracts a retailer to go the franchise route and, in particular, why co-owners James Teehan (pictured)and Ryan Fagan, who already had plenty of KBB experience, saw it is as a viable strategy.
That KBB experience, for James Teehan, was working for Kütchenhaus, which is owned by Nobilia, in its technical support department looking after Homebase stores. But from 2016, Teehan’s focus shifted to looking after Kütchenhaus’s independent retailers, which included his current business partner, Ryan Fagan, who owns Square Kitchens.
Square Kitchens has two stores in Sheffield – one in Halfway and a concession in the Ponsford furniture store, and a third in Barnsley.
“At the end of last year, Kütchenhaus was interested in speaking to successful independents and I approached Ryan to ask him if he was interested in opening a Kütchenhaus franchise,” recalls Teehan.
“He said he was and shortly afterwards he asked me to partner him on the project.” And so the 60th showroom for Kütchenhaus was born.
What made Teehan decide to open his own showroom? “I wanted to have my own KBB business and when an opportunity came along that was as low-risk as this was, I took it. I really like working with Ryan.
“We have different strengths and complement each other. It was an opportunity that it would have been daft to turn down.”
And they had a stroke of luck in terms of location: “We were really lucky,” Teehan tells me, “because once we knew we would go down the route of opening a Kütchenhaus franchise together, Ryan started looking for a property. This property came up, in a relatively affluent part of Sheffield, so we took it. “There is lots of passing traffic, parking outside and it has a total of 3,600sq ft.”
Although it is too soon to say how their chosen location is paying off, early signs are good, as Teehan explains: “The feedback has been very positive and a lot of people have stuck their head round the door to have a nosey. There is a lot of footfall outside the store.” And he tells me that apart from Square, they have no other local rivals selling German kitchens.
As Kütchenhaus also does bathroom, bedroom and living room furniture, I ask if it is part of the deal that they have to have displays of these products too.
“All Kütchenhaus stores are encouraged to integrate designs for different rooms, but it comes down to space,” says Teehan. “For a proper living room set you need things like soft furnishings, which take up a lot of space. And it’s got to look right.”
Which may be where the as yet unused first floor comes in.
“We had one idea,” confides Teehan, “to turn upstairs into a proper studio flat with a bedroom, bathroom, kitchen and study. The other idea was to have a games room and play area so that people can bring their kids to the showroom.”
I ask Teehan if, as a Kütchenhaus franchise, they had a free hand in deciding exactly what to display.
“To be honest, we didn’t have completely free rein because the market dictates what we put on display,” he says. “We were probably given a little bit more freedom than a typical new franchise might be given, as we had a lot of our own experience. While I was still at Nobilia, I was responsible for managing displays and having them designed. Kütchenhaus takes care of doing the designs for a franchisee. They do everything for you.”
And, as Teehan adds, there is no substantial upfront joining fee to become a franchise. “They take a 5% franchise fee. Whatever you spend with Nobilia, you pay 5% back to Kütchenhaus.”
So, being experienced in the KBB world and retailing, why did Teehan and Fagan decide to go with the franchise model?
“A Kütchenhaus franchise is a great fit for anyone who is perhaps working in the KBB industry as a salesperson at the moment and perhaps needs a bit of business support,” explains Teehan. “On the other hand, it is also a great fit for someone who is a business person at the moment and doesn’t need administrative support, but does need the KBB support. They’ve got the support from both angles, even down to things like recruitment.
“The Kütchenhaus brand really has good value. If you’re going to spend £25,000 on a kitchen, would you rather go to a big, national chain, or would you rather go to a family business that really cares about your design, takes a lot more time over it and thinks about how you are going to use the kitchen? You could argue that Kütchenhaus gives the best of both worlds.”
Kütchenhaus of course helps its potential franchisees with all aspects of setting up and running a business, but there are other benefits, says Teehan: “The most important is the economies of scale you get with marketing when you get above a certain size. It’s not a one-man-band trying to feel their way around social media marketing. You have a team of experts who know how to do it correctly.”
Another advantage our duo found in having Kütchenhaus behind them was when they looked at offering consumer finance. They helped make the process a lot easier.
So what did it mean for Teehan to share the milestone of becoming the 60th Kütchenhaus store?
“I take pride in having started out my career in the KBB business at Kütchenhaus. It is nice to be able to say that now we have opened their 60th store. Their first five were very big and looked very different – now they are lovely boutique stores that are easy for customers to get to and provide a comfortable, quiet space to sit and think about their kitchens. I think it is a great business.”
For the future, will the guys look at opening further showrooms?
“Yes, without a doubt. I am probably more comfortable looking after more stores than just one. The plan always was to have multiple stores.”
And would he recommend going the Kütchenhaus route to other budding KBB retailers? “Yes, absolutely,” enthuses Teehan. “It’s a business in a box.”
‘We recognise the importance of independence’
Head of marketing Paul Lee spells out the benefits of a Kütchenhaus franchise
Q: What are the main reasons people go down the Kütchenhaus franchise route?
A: Our premium German kitchens are increasingly attracting new and experienced business owners alike. People are recognising the opportunity of buying into an aspirational product, delivered by Europe’s number-one kitchen manufacturer, Nobilia.
Franchisees have the ability to actualise strong annual turnovers, as well as having a clear route for expansion. We’re very proud too that around 20% of partners open
We also recognise the importance of franchisee independence and freedom to plan their own events and local engagement.
Q: Do franchisees have to pay a joining fee or any other fees once they are open?
A: There’s no initial franchise fee, so the start-up costs are relatively low. Typical year-one running costs for franchisees are between £80,000 to £120,000.
Q: Kitchen designers are not necessarily businessmen. What support do you offer franchisees to run their business?
A: We welcome franchisees with support to find new locations and free showroom installation. A dedicated regional manager will look at all aspects of running their business from coaching sales colleagues in showrooms to advice on accounts and cash flow.
Additionally, partners benefit from marketing support including national advertising and sales leads from our website, plus consumer finance.
Q: What qualities and experience are you looking for in a new franchise partner?
A: Although kitchen design and background experience is key, an entrepreneurial spirit is also important. We’re looking for partners who are going to open a fantastic showroom, deliver great service and enjoy strong cooperation with our head office team. We’re looking for people with ambition to make their own business successful.
Q: Why do you think the Kütchenhaus franchise has been so successful?
A: The support we offer gives showrooms the best start possible with quick access to product and buying at very competitive prices, which are passed on to customers.
Alongside this, our lead-marketing agency continues to push our brand awareness with effective marketing campaigns.