This story appeared in today’s press (this from the Press Association):
Struggling BSM ‘may be sold to AA’
The British School of Motoring (BSM), the UK’s largest driving school, could be sold to motoring giant The AA, it has been reported.
The driving school has struggled since a £10 million management buyout in November 2009 led by joint managing directors Abu-Haris Shafi and Nikolai Kesting, said the Mail on Sunday.
The AA is understood to be close to sealing a deal for a nominal sum, after plans to expand the pool of instructors at BSM to 3,000 apparently faltered. PricewaterhouseCoopers is understood to be advising BSM for a sale.
The market is dominated by independents, with about 45,000 driving instructors in Britain.
BSM, which operates as a franchise business and was set up in 1920, is thought to have just 2,100 instructors, with The AA having fewer than 2,000.
Should be interesting if it happens. Will it be all under the AA brand, or will BSM be kept?
I like the part where they go on about how many independents there are compared to the number of instructors under each of the company names. Each independent is effectively a school consisting of ONE instructor (or in some cases, up to a handful).
They’re not a group of 40,000 instructors all working together. They’re 40,000 individuals, all working as competitiors to each other. They undercut each other to try and win business, and don’t stop until they’re virtually giving lessons away for nothing. That’s why franchises can be a good thing, and why they tend to be more successful than a lot of newly independent ADIs offering lessons for £17 an hour – after the initial “first 3 for £30” kind of offers. The franchise will be charging up to £25 an hour in the meantime.
The story is also covered briefly by This Is Money.