t people are still hiring movies. The franchise retailer is using the kiosks to develop new opportunities for its Blockbuster and Video Ezy brands. The initial rollout of kiosks  existing franchisee store owners, but the group is now recruiting new franchisees to establish further kiosk locations. There are around 320 franchise stores and Uniacke says the kiosks allow existing franchisees to extend their customer base by installing them in other locations in their trading catchment. The kiosks can also reach customers in markets where the traditional store model is viable, such as CBDs at one end of the scale, and small country towns of 2000 to 3000 people at the other. Strengths and weaknesses Three of the top five stores in the FEG network are in Western Australia, but the strongest state for the company is Queensland, where both the Video Ezy and Blockbuster brands are performing well. NSW is also a solid state market, but Victoria has proven to be more challenging. Outside QLD, Video Ezy is the stronger brand of the two in the initial kiosk rollout phase. The chains have struggled to get “cut through” in major shopping malls, but have done well in centres with an anchor tenant and 20 or 30 shops, as well as CBD and small town locations. “We remain committed to our stores. It is where we come from and what we believe in, but some markets are just not viable for that model today with the high rents and wages,” said Uniacke. “In the past two years, we have allowed our existing stores to invest in the kiosks, but we’re now advertising for new franchisees to develop the network further in greenfields locations. “Some of our franchise stores have actually closed and are developing kiosk locations.” Sales patterns on the company’s online retail site, EzyDVD, reflect the same sentiment found in stores. “Online is a tough space, and while we are selling more product than we were two years ago, margins are lower and consumers baulk at paying freight costs,” said Uniacke. FEG has abandoned a trial co-location concept with Metcash’s Lucky 7 convenience store network, but still has several successful sites within Cold Rock stores. Co-location opportunities are not a focus of the group currently as it works to strengthen EzyDVD and rollout up to 3000 kiosks under the two established and recognised brands. This story first appeared in Inside Retail PREMIUM issue 2006.