There’s a new piece of information published in Business Sale Report.
AA owner to rescue struggling BSM
The AA is to purchase rival driving school business British School of Motoring (BSM), which has been having financial problems.
The pre-pack administration deal will involve the transferal of BSM’s driving instructors and the brand, which is to be kept.
Acromas, the owner of AA and Saga, is being backed by private equity firm Charterhouse and is close to finalising the deal with the administrators at PwC.
BSM’s troubles began in late 2009 when it bought out German firm Arque Industries in a £10 million deal.
It has also been reported that BSM was not able to pay its staff their first wage packet of the year, and that it has debts relating to properties and vehicles.
Established in 1920 as a franchise business, BSM is the largest driving school in Britain with about 2,100 self-employed instructors. It teaches about 130,000 learners at almost 100 centres. The AA has less than 2,000 driving teachers.
Plans to expand the instructor base to 3,000 had to be shelved due to the cashflow problems.
So, it looks like they will keep the brand name. However, the AA boasts that it is the only national school to use fully qualified instructors – and a lot of BSM’s instructors are not qualified.
I suppose that technically they can still say that if they keep the two brands separate, but I think they might need to do something more.
I also wonder how the franchise fees will change (if at all)? BSM instructors can be paying well over £300 a week for their franchise, whereas AA instructors only pay around £200. How will the AA justify that. Can it? Will it?
Watch this space.