27 January 2021
AA Driving School and BSM remain fully committed to supporting all our driving instructors through the coronavirus pandemic. We understand this is a very challenging time for our instructors; personally, professionally and financially. We have worked hard to try to find the most sustainable solution during lockdowns, which supports both instructors and our business.
During the first lockdown of March 2020, we waived franchise fees for 14 weeks in England, 17 weeks in Wales, 19 weeks in Northern Ireland and 21 weeks in Scotland. In subsequent local and national lockdowns in 2020 we offered all instructors the option to defer their franchise fees. This meant they made no weekly payments to us during this time. The deferred fees were spread, interest free, over the remainder of their contract or 12 months – whichever was longer. If instructors want to spread their deferred fees over a shorter period they also have this choice. An instructor could also choose not to utilise the deferral scheme and continue to pay their weekly fee.
The consequence of this decision was that our driving school business earned no income at all for 14 weeks, but still had to pay leases on all the instructors’ cars, contact centre overheads and administration costs. This cost the AA Group several million pounds.
Since the third set of local lockdowns, from 19th December 2020, and the subsequent national lockdown, which began on 5th January 2021, we have continued to offer all instructors the option to defer payments. This works in exactly the same way as the deferment scheme in 2020, however the repayment term was extended to cover the remainder of their contract or 24 months – whichever was longer. The fee payments remain interest-free. In addition, we are reducing franchise fees, by giving instructors every fourth week in lockdown free. Instructors should be on a minimum of a 12-month fixed term agreement and need to stay at least until 31st December for this discount.
Instructors who have not chosen to defer their payments will receive their usual franchise invoice for three weeks out of every four. In the fourth week, they will not pay their franchise fee.
This is an incredibly difficult situation and we will continue to do all we can to support instructors. We will continue to review our support when the Government reviews lockdown measures in relation to driving tuition, which we currently expect in mid-February.