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Elizabeth Gillam on Food Franchising

A couple of weeks ago I sat down over a cup of tea and asked Elizabeth Gillam from Franchisee Success to share some of the insights she has gathered from ten years in Food Franchising. Liz bought her first Boost Franchise in 2004 and has gone on to open a Health Habits Franchise and Bucking Bull Carvery. I asked her to share some of her experiences starting out in Franchising and the keys that a business must have in place before they are ready to franchise and open new stores.

The Brand Story

Your need to communicate the value franchisees are getting upfront. Before you franchise a concept, you have to not only have a business model that shows profit but also you have to have a brand story. That is what people are paying for, you can’t just sell a dream.

“When I start working with business who are wanting to franchise, I ask, so what is your franchise model going to be?  We go through what their goals and aspirations are, what they feel they have to franchise and what their point of difference will be. Why is somebody going to buy a franchise over setting up a business on their own? They must be able to define what they will bring to the franchisee.”

The stores need to look similar and communicate the same story to the customer. When you are selling a franchise, you are selling not only your operations manuals but also the story behind your customer experience and brand.

Business Systems and a Leadership Team

To expand your business and open more stores you first need to free your time from the business. This takes an initial investment of time to record and systematise your business systems and test these systems with your leadership team. If you don’t have a leadership team in place your stores are not autonomous.

“You have to know your business inside out and upside down, what works, what doesn’t. You will need to systematise what you do and what makes you successful and then test that. The only way to do that is to put a leadership team in place that is running under those systems.”

In franchising, you are asking for a premium because your business is systematised. What is the system your franchisees will be buying?

The Pilot Store

In Franchising, you are selling a product, that product is your brand, store design and business systems. Setting up a company-owned pilot store will allow you to prove your business model and store design. You must come to the Franchisee knowing exactly what your product is. By the time you are opening stores for Franchisees, your time of trialling is gone.

“Your pilot store must be running at around 20% profit because by the time you franchise and lay out for marketing there must still be enough profit in each store that someone sees the value of investing in them.”

Elizabeth shares more insights into food franchising and tips for franchisees to increase profitability in her book  “Upsize Your Profit”. 

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