Franchising: the future of padel in the UK?
By Patrick Burge
Sports stars and TV personalities seem to be queuing up to bolster padel tennis’s growing mass market appeal. Ex footballer and now TV pundit Rio Ferdinand, ex international rugby player Chris Robshaw, Kirsty Gallacher, Tim Henman and many others are banging the padel drum. Things are looking good in the padel world and as most people reading this will know, the sport is on an exponential growth curve in the UK. But how will padel keep up with demand and become a permanent mass participation sport?
Historically several sports have grown but not become major mass market in a meaningful economic sense across the UK. Padel might learn from other sports about the opportunities and barriers during its existential growth phase.
Padel has a lot going for it; it’s easy to play across all age groups, easy to understand and has a non-elitist persona. The golden nugget might be that it is also attractive to other complementary businesses. When you get Deliotte producing a Global Padel Report saying 57% of players would have a drink after playing you might be onto something.
Supply and demand
However, the growth and development of any market is about matching supply and demand economics. There is no shortage of demand for padel in the UK but markets are fickle as any economist will tell you. They have a habit of moving on if the two sides of the supply demand equation do not keep pace with each other. The padel sector may have some supply side barriers to address if it is going to keep pace and scale in line with demand.
As the UK does not have a tradition of multi-sport participation clubs in the same way as some other countries, where and how might padel grow?
There will, inevitably, not be a one-size-fits-all solution. Maybe growth is going to be driven by the education sector. There is money in them there hills, and maybe the opportunity is to build facilities in and around universities and schools. Field hockey has done this in the UK. For example Beeston Hockey Club collaborated over several years on playing surface ownership with both the University of Nottingham and Nottingham High School. Maybe the LTA will drive the business of padel forward, or maybe there needs to be a completely separate governing body. The cost of land for both indoor and outdoor courts, and UK weather, local authority and commercial landlord reticence may also all create a drag effect on growth.
It seems likely that we are mostly going to bolt courts onto existing facilities rather than follow the stand-alone facility approach. David Lloyd is on the move with padel, providing what one industry commentator called the ‘John Lewis of keeping fit’.
Padel is also being tested by other fitness businesses. Hybrid Fitness, a fast growing gym operator has installed padel in its new HQ gym facility in Wimbledon, London. Antony Townsley a director at Hybrid said: “We saw the growth of padel and how it could complement our flexible fitness offering, attracting and retaining members. But we are not padel experts so collaboration was the answer.”
Hybrid Fitness teamed up with Padel People. And, as with any collaboration, there had to be a net gain for both parties. As James Rock, of Padel People, said: “Having padel indoors at Hybrid allows us to showcase the game to Hybrid’s customers, exposing the game to a like-minded audience, educating them on padel’s attraction as a sport for all.”
Padel as a complementary offering could provide the ‘stickiness’ that is one of the gym sector’s challenges. Padel as an added offering could not only create additional revenue but also serve as a means to attract and, more importantly, retain members.
So maybe collaboration is the way forward, but how might that look in reality and how can the sport scale in terms of supply and demand?
As a growth mechanism franchising might be the thing that satisfies two of the demands on padel – participation and installation.
It has been proven time and time again that franchisees provide a highly a motivated workforce of entrepreneurs and fast, low cost, growth that can maximise business valuation for the franchisor. The food and beverage sector heard that penny drop many years ago. But franchising is not just for flipping burgers; businesses from installing lofts to operating baby scanning clinics and funeral directors use franchising to build low debt, high value branded businesses.
Bearing in mind the early adopter dynamics of the padel sector in the UK, the first way franchising could be used in padel is as a ‘shop-in-shop’ operator brand in a similar way to the collaboration between Hybrid Fitness and Padel People. This is where there is a host facility, be it a gym, school, university, tennis club, or local authority premises where a franchisee operates the ‘XYZ’ padel tennis brand in that facility. The franchisee simply operates the business under the padel tennis franchisor’s brand.
The other area where franchising could help drive high quality, fast-paced growth is in the ground preparation, installation and maintenance of courts. It could be the answer to addressing the barriers to providing enough courts for the growing number of people wanting to play padel. Franchise networks of motivated, self-employed franchisee installers is used in a surprising number of businesses to supply and maintain all manner of manually installed products.
Padel industry providers will be thinking hard about how to seize the growth opportunity, but choosing the right sort of collaboration, whether it is via franchising or another growth strategy, is key for each business, and for the sector as a whole.
In a recent article, Maddyness the startup and investment news site, asked why investors were clamouring for the UK’s fastest growing sport?’. Their assessment was ebullient, claiming that it would be easy to forget that padel isn’t a new SaaS company or social media giant: it’s a racquet sport. Maybe padel is not exactly similar to a tech sector bubble, but as a sector it could learn some lessons. Even some tech businesses have adopted franchising to capitalise on the boom and avoid the shooting star syndrome. Maybe, just maybe by learning some market dynamic lessons, padel will and establish itself as the growth sport for the next decade. 🎾
Patrick Burge is a specialist in business growth. A qualified sports scientist, he has advised online and offline businesses in many sectors including tech start-ups, apparel, sport, fitness, health, and coaching. Contact him at: firstname.lastname@example.org