The introduction of Lucky 7 convenience outlets in existing Video Ezy and Blockbuster stores will be determined by the franchisees, says Paul Uniacke, managing director of the Franchise Entertainment Group (FEG).
While he insists that the additional costs for franchisees are at the "absolute minimum," if franchisees aren't interested in changing their current business structure they won't have to.
Lucky 7 outlets are currently undergoing a three month trial in a number of Blockbuster and Video Ezy stores, with the hope that at the end of the trial franchisees will want to jump onboard.
"The intention is to run this out, subject to trial of course, across as many stores that wish to embrace it across the network as possible," Uniacke told Franchising.
"My belief is that at least 80+ percent of stores in the current FEG Group will be able to accommodate a Lucky 7 store-within-a-store concept, remembering that the franchisee is the one owning the concept. This is a license agreement they have through FEG with Lucky 7."
The aim of introducing Lucky 7 outlets in video stores is to diversify Video Ezy and Blockbuster's current offering and take advantage of the large space that most outlets have. According to Uniacke, 80 percent of revenue generated by the two franchise's comes from the New Release wall of videos, which represents only 20 percent of the floor space.
"What we're looking for here, in some respects, is petrol and convenience without the petrol. So it then becomes entertainment and convenience. We're looking to replicate what has been a fantastic transformation of the fuel industry over the past 15 or 16 years," said Uniacke.
Franchisees will be able to choose between a 25, 35 or 45 square metre Lucky 7 outlet, and will have flexibility in regards to the product offering as well.
"Increased stock holding, wages and training are the main costs that are going to come in. Some stores may elect to even increase their hours of trade ... there is a bread, milk and newspaper offering in this so some stores that are opening at 10 o'clock may come back to 8 o'clock," he said.
"Some locations may not carry milk. The offering is not one size fits all, some locations will carry 600 additional product lines, other may only carry a smaller offering, 300 or 400 additional product lines."
To read more about Lucky 7 and the FEG Group, click here