How well will franchises face storms ahead?

In the first phase of franchises in 1995, when the UK was emerging from recession, John Nelson looked at how potential failing franchisees would handle the situation. Now, it is a matter of timescale and resilience, he says

It was the lack of resilience of the holding company, Sea Containers, that led to the demise of GNER early in its second term, says Nelson

It was the lack of resilience of the holding company, Sea Containers, that led to the demise of GNER early in its second term, says Nelson

When the railways were privatised and the first franchises let, I published an assessment of their prospects. Drawing heavily on my business knowledge at the time it was possible - given what I knew of the cost, operating and market environment of each TOC - to make some predictions about their prospects in the light of the franchise commitments made by the early “winners”. I was of course careful to call these “assessments” rather than predictions. I was not inclined to...