Financial Statements Strategic Report Governance 19 Franchise Brands plc Annual Report and Accounts 2018 Customer case study “We use Metro Rod for planned maintenance on all our schools across Liverpool and Knowsley, and they also complete reactive works once a year on a large proportion of our Liverpool schools. We trust Metro Rod to get the job done quickly and that is why they receive so much work from us. The communication is also second to none, and we know we can count on Metro Rod to ensure we comply with the very strict Service Level Agreements on all our contracts.” Engie Facilities Management MEET A FRANCHISEE Graeme and Avril Stevenson Metro Rod, Manchester South & Central Business overview • Metro Rod franchisee since 1994. • Sales of £1.8m in 2018, an increase of 35% on 2017. • 19 engineers, nine dedicated office staff, 20 vans and two tankers. • Provides high-pressure water jetting, CCTV surveys, drain or sewer lining, excavation, electro mechanical cleaning, fat and grease management and tankering services. • Serves a wide range of national and local customers across multiple sectors, including some of Manchester’s best- known institutions and businesses. Accolades • Recipients of the highly coveted Metro Rod “Franchisee of the year award” 2018. • Nick Broadbent, Metro Rod Manchester engineer won the Metro Rod “Engineer of the Year” award for 2018. For more information visit metrorod.co.uk Franchisee business model Metro Rod is a management franchise in that the franchisee manages individuals who provide the service. On average, franchisees employ nine engineers and operate eight vans. The average sales of a Metro Rod franchisee are approximately £900,000 with 35% of franchisees now achieving sales of over £1m, and several achieving sales of over £1.5m. Sources of revenue for Franchise Brands Virtually all the revenue to the Group derives from MSF income. While the standard rate of MSF for drainage is 22.5% of franchisee sales, in practice this amount is lower as a result of a number of special incentives and allowable expenses, and in 2018 was 18.6%. Metro Rod’s highly skilled and trained engineers carried out 174,000 jobs in 2018.