The Strange Business of Charging People to Work

By Tam Goldsmith

Tuft Crowd charges customers to make their own creations. The real franchise test is whether they enjoy it enough to return.

Tuft Crowd has turned DIY rug-making into a South African franchise. Customers provide some of the labour and still pay for the privilege, which sounds like a wonderful business until you ask how often anyone actually needs another homemade rug.

There is something rather clever about a business that gets customers to make the product themselves and then charges them for the experience.

That is essentially what happens at Tuft Crowd. Customers visit its Cape Town studio, use tufting guns and other equipment to make rugs, bags, framed pieces and other creations. The company says its average customer spend is more than R1,200, with individual experiences ranging from hundreds to more than R2,000 depending on the project.

Now Tuft Crowd is offering franchises in South Africa, with advertised startup investment from approximately R100,000 excluding rent and renovations.

That makes this much more interesting than another craft studio. A traditional retailer pays somebody to manufacture the product and then tries to sell it. Tuft Crowd provides the equipment, materials and guidance while the customer does a fair chunk of the creative work themselves.

The difficult part is persuading them to come back once they have already made the rug.

The First Visit Is Probably the Easy Sale

Experience businesses have changed the way we think about value. People willingly pay to paint pottery, make candles, cook meals and create objects they could probably attempt at home for considerably less money.

They are not really paying for the object. They are paying for somewhere to go, something to do with friends and a story to take home afterwards.

That helps Tuft Crowd because it is competing with entertainment as much as retail. A Saturday afternoon tufting session might be competing with lunch, bowling or another activity rather than with the price of a rug in a furniture shop.

The danger is frequency. People eat repeatedly. Most people do not need another handmade rug every fortnight.

Tuft Crowd has widened its offer to include other projects, private gatherings and corporate events. For franchisees, those additional reasons to visit may eventually matter more than the original tufting concept.

The 33% Repeat Rate Is the Number I’d Question First

Tuft Crowd says its established Cape Town business has a 33% repeat customer rate. That is a useful number, but a franchise buyer should want to know exactly what sits behind it.

Are customers returning to make another rug, choosing another activity or attending as part of a group? How quickly do they return and how much do they spend the second time?

Those details matter because experience businesses can have magnificent opening periods. Everybody wants to try the new place, social media fills up and bookings look encouraging. Then most of the local market knows what it is.

A franchisee in Johannesburg or Pretoria cannot simply assume Cape Town behaviour will repeat itself. The local population still has to produce enough bookings to fill workshops after the novelty has gone.

R100,000 Is Only the Beginning

The advertised franchise entry cost also needs to be read carefully. Tuft Crowd says the approximately R100,000 starting figure covers the franchise fee, equipment, initial consumables and system setup, while rent and renovations are excluded.

That is a substantial exclusion for an experience business.

Customers paying four figures for a creative afternoon expect the studio to feel like somewhere worth spending time. Location, fit-out and atmosphere therefore become part of the product rather than incidental overheads.

There is labour too. Customers may do the tufting, but somebody still has to teach them, prepare materials, supervise equipment, reset the space and make sure they leave with something resembling what they intended to create.

Tuft Crowd says it wants hands-on operators, which makes sense. This is closer to running a hospitality or entertainment venue than opening a passive craft shop.

Instagram Won’t Fill the Studio Forever

Tuft Crowd photographs extremely well. Watching somebody fire brightly coloured yarn through fabric with a tufting gun is naturally more interesting on social media than watching someone buy a rug.

That is useful marketing, but the franchisee still needs occupied seats after everyone in town has seen the videos.

The real business will therefore be workshop utilisation, group bookings, corporate events, repeat customers and whether new activities can be introduced without making the operation too complicated.

If those numbers work, the fact that customers are doing some of the labour becomes a very attractive feature of the model. If they do not, the franchisee could eventually own a beautifully branded room full of equipment that everyone locally has already tried once.

What We Can Learn From This

Experience franchises need to prove what customers do after the first visit. Tuft Crowd’s reported 33% repeat rate deserves close examination, alongside workshop occupancy, labour costs, property and the contribution from corporate and private events. Prospective owners should model the business around repeat behaviour rather than opening-week excitement. The experience brands worth backing will be those that can keep filling seats after customers have already posted the photograph.
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