The cost-of-living crisis has prompted some franchisees to save energy and cut waste
Many franchises have worked out ways to save money and energy use at the same time – a win-win for franchisors, franchisees and their staff. Choosing the right franchise means saving money on energy bills now and in the future and helping save the planet. If finding a franchise that is reducing carbon use – even aiming to reach net zero - is not on your list of franchise requirements, add it now.
Here we look at some inspiring stories of franchisees who have adopted clever energy-saving initiatives.
Look at the sector
Businesses that involve driving to customers’ locations are likely to incur more fuel costs than businesses run from your own home. Typically, mobile franchises supply franchisees with customer booking and route planning software, so they use the most fuel and time-efficient routes.
Franchises that can be run from home are also likely to involve lower energy costs than those that mean operating from premises, such as a shop, restaurant, showroom, or workshop. If you are running a business from home, you can claim some or all of the energy costs, such as lighting and heating, for rooms you use solely for business as expenses in your annual accounts.
Tech saves money and the environment
Many franchises have adopted new energy-saving initiatives only recently, which means that statistics about the resulting cost savings are not available, and franchisees are not yet ready to talk about any savings that they are making.
However, the Cafe2U mobile coffee and café services franchise started thinking about this three years ago, for sustainability reasons, and can now talk about the financial savings for franchisees.
Martyn Ward, chief executive at Cafe2U UK, says: “Our vans were formerly all diesel-driven and had diesel generators to power the café equipment inside, but we have been changing over to new all-electric vans and they have revolutionised the business.”
Initially, Cafe2U started replacing the generators with lithium-ion (li-ion) rechargeable batteries but then looked for all-electric vans that were driven by li-ion batteries, too.
“We found we were almost ahead of the automotive market and had trouble finding mid-sized, all-electric vans. Finally, we got some of the first available in the country. It’s a good thing we bought quite a few because the waiting list for all kinds of electric vans is now huge,” says Martyn.
The vans cost £60,000 plus VAT and Cafe2U offers franchisees a monthly leasing arrangement to pay for them. “They are about £10,000 more than the old diesel vans but the repayments are only about £150 more than they were for the diesels, and franchisees are saving much more than this amount on the cost of fuel and servicing,” adds Martyn.
An overnight home charge allows the vans to cover about 140 miles a day (though franchisees typically do 30). “It’s attracting franchisees and customers, because they are increasingly prioritising sustainability, and fuel prices are soaring,” explains Martyn.
Fuel savings for franchisees
David Truby, managing director at lawn care franchise Greensleeves, says: “The fuel-saving initiative that we are offering to new franchisees is 100 per cent about saving money.”
A van-based franchise, Greensleeves is offering to cover fuel costs for new franchisees for the first year when fuel consumption is likely to be higher as they visit new customers and move around more than they will once the business is established.
“This is not some distant refund we are proposing – we will take off the cost of the first year of business fuel from the franchise fee if requested,” adds David.
He estimates that this offer will save incoming franchisees £2,000 in their first year, but it only applies to the first five franchisees that sign up before the end of 2022.
Saving money for staff aids recruitment
In-home care franchise Visiting Angels has introduced e-bikes to its care team. It is offering the low-emission, alternative form of transport as a choice for carers throughout the network, as one way to address carers’ concerns about the cost-of-living crisis. “With the cost-of-living crisis having a significant impact on the financial wellbeing of those working in the care sector, it was our duty to introduce a form of low-cost transport to support carers,” says Visiting Angels’ managing director Dan Archer.
Check the commitment of franchisors
Whatever the project, check the franchisor’s commitment – and what franchisees think of it.
“You can tell quite a lot about a franchise’s commitment to making a difference to the planet and people’s wellbeing by looking at its investors,” says Othman Shoukat, managing director at the Creams Cafe franchise. He explains: “In December 2020, Pistachio Holdings and co-investor Salonica Maroon acquired a majority stake in the business. Salonica Maroon is a social impact fund, focused on assuaging societal ills. We care about the future of our people and our planet. This doesn’t detract from us maximising financial returns and, in fact, good environmental, social and governance (ESG) policies enhance financial returns.”
He adds: “Any business which is unwilling to understand its impact or unwilling to communicate key ESG considerations to consumers, will harm the overall sustainability of the hospitality sector.”
A marketing opportunity
Most franchises that are adopting more sustainable ways of working are shouting about it to customers. This can bring business benefits because market research shows that consumers, even while looking to save costs, are still spending more with brands they perceive as authentically sustainable. For a prospective franchisee, this puts a tick in the sustainability box, adding to the attraction of the franchise.
Amanda and Steve, Cafe2U
Saving cash – and the environment
In November 2020 Amanda Lawrence invested in a Cafe2U mobile coffee van and café franchise, serving the Braintree area. As a former banker, she had an eye for finance as well as a concern for the planet.
“The franchise was a resale and included an eight-year-old diesel van equipped with a diesel generator to drive the café equipment,” says her husband Steve, who left his bank career to join Amanda in June 2021.
In September 2021 they invested in a new all-electric van and found that it saves money as much as the environment.
“It saves us about £350 a month in fuel costs compared to the old diesel van,” says Steve. “Even at current electricity prices, charging both batteries nightly costs about £180 a month, and because the electric engine has no clutch, gearbox or exhaust, there’s a lot less to go wrong, so it saves us hundreds of pounds on repairs and replacements.”
Steve adds: “We love it, and so do our customers. One battery drives the van and the other powers the coffee machine, refrigerator and freezer, the heated oven and the lights. There’s no noisy diesel generator and no fumes, and one overnight charge delivers more than enough power to get the van through our 45-mile round, delivering coffee and food to 25-30 local workplaces.”
The van livery highlights the fact that it’s all-electric, which customers like, and Steve adds: “The cost savings mean we have not had to put up our prices to cover the increase in fuel costs.”
Pedal power puts caregivers in the driving seat
Visiting Angels is rolling out an e-bike scheme across its network.
“As a carer-centric company, we listen to people who are keen to work for Visiting Angels but, in this case, feel they are unable to because they don’t own a vehicle or are concerned by record fuel prices,” says managing director Dan Archer. “Providing this little extra pedal power to our teams is going to make a big difference.”
He adds: “This isn’t about saving money. We wanted our carers to be able to work without the need for a car or the costs associated with running one. These e-bikes open up the career opportunity for those who don’t drive or have access to a car.”
Ultimately the move will benefit Visiting Angels franchisees because it will help address the carer recruitment shortage. “More carers mean more care provided, this is a case of extra revenue generated rather than costs saved,” Dan says. “We were listening to our carers when the fuel prices started to bite and we wanted to find a way to help. This initiative means we’re leaving more money in the pockets of our carers rather than cost-saving as a business.”
Practical steps to sustainability cut franchisees’ costs
Andy Malthouse, construction director at Creams Cafe, says the dessert franchise is looking at sustainable ways to affect the environment and energy efficiency impacts of its branches.
“Any difference we can make will have a positive effect on the environment but also help to reduce energy consumption in our restaurants, reducing our franchise partners’ ongoing running costs,” he says.
“For instance, we consider whether we can achieve the same lighting levels in our locations using more energy-efficient products. Our new Creams Cafe soon to open in Manchester’s Arndale Centre uses a different fitting with a greater reflective bezel around the lamp, producing more light.
“This allows us to leave more space between light fittings and so reduce our lighting by about 10 per cent. The lighting is on dimmer switches, so we have the option to adjust the strength depending on environmental changes. Back-of-house, all our lights are on movements sensors so only come on when needed.”
All sorts of other considerations go into making Creams’ locations energy efficient. Andy says: “If a unit has a high ceiling, we’ll put in a lower suspended ceiling in the back-of-house areas, significantly reducing the space we need to heat or cool. Back of house, we fit hygienic wall cladding and if we’ve dropped the ceiling height, we need less of this product too. That also means less adhesive, lower transport costs and so on – it all makes a difference.”
He adds: “We only use shopfitting companies that can demonstrate they have a genuine commitment and interest in reducing our carbon footprint.
“Currently, we are re-writing our work schedules to reinforce these considerations even more. This is the start of a long road of developments and it will be 12 months before we have definitive feedback on it, or an accurate figure on energy saved and costs reduced. Our focus is primarily on sustainability – but we feel a financial benefit will ultimately follow from good practices.”
Don’t let energy bills deter you from starting a business…
The Energy Bill Relief Scheme (EBRS) for non-domestic customers means almost all businesses can get discounts on their energy bills. You don’t have to apply for this: reductions are applied automatically by suppliers. Reductions are the same regardless of the supplier, but bills will still vary according to energy use.
A medium-sized restaurant uses around 3.5 MWh of electricity and 4 MWh of gas each month. They are on a variable contract, giving them a current monthly energy bill of around £3,600 per month. As they are on a variable contract, they can receive support up to the maximum discount (£345/MWh for electricity and £91/MWh for gas). Applying the maximum discount rates means that their monthly energy bill reduces by over 40 per cent.
Visit gov.uk for more information on this scheme
Ask about practical measures
If a franchise that you are interested in does not explain in its brochures and on its website the measures it is taking on energy-saving issues, ask directly what it is doing, how this saves money for franchisees and how that benefits any staff. Franchisors should have ready answers to your questions because energy bills will impact your future profits, and indirectly will affect the returns for the franchise as a whole.
Ask to speak to franchisees in the network to discover first-hand how the franchise’s energy-saving initiatives have benefited them. Have franchisees saved money or otherwise benefited from advice or help with energy-saving and cost-cutting initiatives from the franchisor?
Linda Whitney writes about franchising for the Daily Mail, What Franchise and many other publications.