DPD is an international parcel delivery service known to deliver parcels on behalf of many high street brands, including Apple, M&S, Boots, Lush, Nike, ASOS, Next, and John Lewis.
To maintain its industry rating as a market leader, this company is always striving to develop or come up with technological innovations that will help guarantee its customer satisfaction. DPD’s award-winning Predict service offers customers a one-hour delivery timeslot and a real-time map that lets them track the route of the driver.
Note that when you choose to work with DPD as a franchisee, you become an Owner-Driver Franchisee – or ODF – and carry out deliveries in your local territory. Franchisees will work five days a week. Also note that you can decide the exact days that work best for you and, if you’re eager to maximize your earnings, you can even work a seven-day week.
According to reports, online shopping is more popular in the UK than in any other major country. Consumer e-commerce now accounts for over 36% of the total retail market in the UK (up from 20% in 2019) with over $3 billion spent weekly in the UK internet retail market.
Also have it in mind that revenue in the eCommerce market is expected to reach US$199,873m in 2023, with an annual growth rate (CAGR 2022-2025) of 12.63%. If this statistic proves to be correct, it will be the highest penetration rate for online shopping in Europe.
Additionally, just like every other franchisor, DPD ensures that franchisees get comprehensive training and ongoing support, the latter is very important if you have never run your own business before and will also be very necessary during the startup stage.
Once franchisees are up and running, they can then grow their earnings by leveraging the DPD’s route planning technology and also earn loyalty rewards once their businesses become established. For instance, for every 100,000 stops completed, franchisees are known to earn a financial bonus.
Cost and Fees for Opening a DPD Franchise
It is imperative to note that there are three different options to choose from when you join DPD. Coupled with becoming an ODF, have in mind you can choose to become an ‘employed driver’ (an employee with a full package of employment benefits) or a self-employed Owner Driver Worker (ODW) (a self-employed contractor that receives paid holiday, sick pay and pension entitlement).
However, note that becoming an ODF remains the recommended way to maximize your earning potential with this franchisor. Note that DPD makes available a wide array of deposit plans to suit potential franchisees, and this ensures that there is flexibility over the amount you are expected to pay and when you have to pay it.
The first option involves a full payment of £1,300, with £1,000 being the deposit and £300 being the fee. The second option is a total payment of £2,300, with £2,000 being the deposit and £300 being the fee. Have in mind that the deposit amount depends on the franchisee’s suitability score.
If you choose to split the payments up a little more, option two is a total payment of £1,300, with £300 being paid upfront. Then, you can make five £200 payments or eight £125 payments. DPD says all its franchisees have the potential to turn over between £140,000 and £170,000 annually after three years of trading.
Howbeit, these figures will vary based on franchisees providing top-notch collection and delivery service consistently and adding routes in years two and three.
Requirements for Opening a DPD Franchise in the UK
Aside from the necessary finances needed to purchase a DPD franchise, there are no other requirements for opening a DPD franchise in the UK. Generally, it is a low-cost start-up with an increased amount of earning potential over long-term work. The five-year plan offered in the DPD Franchise agreement also has additional benefits of stability and security with a reliable source of income.
DPD franchise supports its franchisees at every step from the very beginning to the end. They provide staff training, franchise location, technology, and marketing. They will also guide you on how to maximize your earnings and deliver efficient customer care services. You also get help in planning the route efficiently.
Step By Step Guide to Open a DPD Franchise in the UK
To apply for a DPD Franchise, you need to visit its official website and register yourself. On the website drivers.dpd.co.uk, you only have to complete the application process and submit your passport, driving license, and national insurance number. However, before you rush into completing this application, here are key things to ensure you make a wise investment;
Carry out your Due Diligence
Being ready to start a business doesn’t mean acquiring a DPD Franchise will suit you well. Take your time to find out the company’s data on sales, outlets, growth, and marketing plans. Reach out to existing franchisees and ask crucial business questions. In the world of business, always remember that even if there is strong demand at the moment or in the past, this does not guarantee strong ongoing demand.
Read and Understand the Documents
You must review all disclosure statements and provide the franchise representatives with any supplementing information required, such as lease options, background information, and disclosures. Always ensure you understand the operational and financial obligations you will be under if you purchase a DPD Franchise.
Take your time to analyze the contractual rights of the franchisor, like the right to decide sources of supply and supply prices, control over marketing and advertising, ability to shape the way and manner your services are offered.
Also, do not forget to verify the grounds on which either party may terminate the contract. In the United Kingdom, the franchise agreement is a binding legal contract once signed. Owing to your business goals and your willingness to build a very viable business, it makes good sense to seek the advice of the experts, especially in terms of the agreement. Professional advice can save you from making a very bad and costly business decision.
Understand your Obligations, Strengths, and Weaknesses
The franchise agreement will note what aspects of the business you are tasked with and what aspects the parent company will have to cover. Truth be told, every franchise arrangement is different, but DPD claims to be better. It is still vital to understand what your obligations are and whether you have the skill set to carry out those obligations.
You can always reach out to DPD to handle all the financial and accounting requirements and provide the system for you to use. You should also check if you have the necessary skills to do all the things required of you in the franchise. If not, you may have to include the costs of outsourcing those functions.
Key in the Numbers and Assess the Risks
As a franchisee with DPD, it falls on you to make the franchise successful within the terms of the agreement. You are expected to understand the commercial elements of the franchise agreement. Note that if the business is not as successful as you hope, it won’t in any way affect the fee you pay to the company.
Additionally, you may not have exclusivity in a locality and will have to compete directly with nearby competitors, and this will massively impact your potential customer base. Nonetheless, it is recommended you get professional financial advice to help you understand the commercial aspects of the franchise agreement.
Know your Exit Options
While this may seem like a long way off, it is genuinely advisable you consider your exit strategy from day one. Most often, exiting will consist of selling the business to an aspiring franchisee who, after being authorized by the franchisor, can take over. Expect DPD to set out terms for exiting the business, and you need to make sure you meet these.
It is also important that you make your franchisor aware of your plans to sell the business, as the franchisor may want to be heavily involved in the process.