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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”. 

How to Control Cost and Open a New Food Business

Cost is one of the major concerns business owners face in the process of expanding their businesses. Knowing how to control cost when opening a new food business or expanding an existing one puts you in control and avoids the stress of unforseen budget blowouts.

The fit out cost for a hospitality business usually comes down to three parts namely: equipment and services; approvals and consultation fees and shop fitting.

Services and Equipment

The hidden cost that many business owners do not see when selecting a site are the services. The services usually required for a Food Business at minimum are a grease trap, mechanical ventilation, electricity and gas and refrigeration. Understanding the services that are required for your type of business and getting expert advice on the services that are already available on the site you are considering can save tens of thousands of dollars from your cost.

Before you start a fit out put together a list of all the equipment you will need to operate your business. Look at your menu and the functions you will need in your kitchen area and counter and work with a good equipment supplier to provide details and costing of your equipment.

Knowing the total cost of the equipment and your financing options will help you manage your cash flow as usually equipment is one of the largest expenses in a hospitality fit out.

Design and Approvals

Having a realistic fit out budget and working with a designer who can work with your builder to manage cost is the second key to keeping your store fit out on budget. The types of finishes and furniture selected as well as the layout of the store can have a large impact on your final build cost. Your budget will need to allow not only for the cost of the construction and equipment but also any consultants you will need to work with and required approvals.

Fit out

To put together a price your builder will need accurate and detailed drawings of your store design. Usually pricing is only given once the design is complete. However, not having an upfront indication of what the fit out will cost often leads to budget blowouts, problems with financing, and delays in the construction and more. The solution to this problem is involving your builder in the design process so that he can offer feedback on the design and construction cost and anticipate and budget problems as your store design develops.

An understanding of the costs associated with your new store fit out will allow you to be prepared with sufficient financing and build to budget.

 

Managing A Food Business Fit Out

Are you one of the many business owners who want to grow your business and open new stores but you are not really sure where or how to start? Working closely with over a hundred food business owners in various stages of growth has helped me learn and understand the process of replicating the success of an existing profitable hospitality business. This is no formula for success but there are certainly and certainly tricks and tips that may help you along the way to growing your business.

The three common problems which hold business back from opening new stores are: lack of time, knowledge and capital. In this article, I will go through some of the knowledge on selecting sites that I have found to be missing in business that are struggling to take the leap moving from one store to many.

Business expansion doesn’t happen in a snap of a finger. The process of systemising your existing business ready for expansion, research into locations demographics and available sites and finally taking the leap to opening a new store may take months or even years. Much of this time is in research and planning. However, planning alone will not get you where you want to be, you have to put your plans into action if you want to make that dream of opening up a new store come true.

Site Selection

This is one of the most crucial stages in the process of expanding your business. It is at this point that you need to decide where you want to open up that new place. Some things that you might want to think about should include the following: target market, foot traffic, lease incentives and rent, and the services you will need.

Location is an important factor in the success of a business. Knowing and understanding the desires of your existing customers will help you to choose a location that appeals to the same demographic. It may be helpful to profile your existing customers. Where do they live? What areas do they work in? What is it that makes them visit your store? Thoroughly understanding your customer and the need your business fills for them will give you clarity in your choice of areas in which you can fill the same need.

It is also important to consider how easy it is for your customers to come to your store. Is the location accessible enough? Does it have enough parking space to accommodate your customers? Is it on the busy side of the road? How much pedestrian traffic is there? Minimising the effort that your customer has to make to visit you seems like a small issue but can have a big impact on your new business particularly in the early days. If you can locate yourself so that you are already surrounded by potential customers you will have higher visibility and a greater likelihood of attracting customers who are regular passers-by.

Once you have narrowed down a location you can start looking at individual tenancies.

Other things that you need to think about are the terms of the lease agreement. Is it fair? Is it beneficial to you? Getting someone to review this with is a smart move that you may want to make before closing the deal with the lessor.

You will also need to go over the property that you will be leasing. Does it need plumbing? How is the ventilation? Check also the pipes and lines, as well as the emergency exit. It should be at this point that you will know what needs to be fixed and repaired. If you’re not sure, you can always find someone to help you.

 Design and Approval

This is the part where you are required to work with a retail design manager to get a design assessment; and coordinate with the council to get a food license approval.

At this stage, you will be focusing more on how you want your store to look like and how it operates. Visualize your new store. How do you want it to be? What colour scheme do you prefer? What design or theme do you want to use? A commercial designer can guide you with this, and can also help you utilise the space for maximised profit.

Fit Out

It is during the fit out process that the builders get involved. To ensure that the fit out process is right on track, there should be proper coordination and open communication between the business owner, the builders, and the design team.

Working with a design firm will be an advantage because they can provide all the assistance you need starting from the selection of a site up to the opening of your new store.

If you want to get started, you can call our designer, Alisa, at 0415 199 466 for creative advice and more.

 

5 Keys to Choosing a Food Tenancy

With the growing popularity of Instagram, Pinterest, and other social media sites, today’s generation is becoming more and more obsessed with taking selfies, ootd – or “outfit of the day” photos, and hashtag “foodporn”, “foodgasm” or “foodie” snapshots. Even celebrities post photos of what they are about to eat, or where they are having their meals.

This kind of exposure can have a big impact on your restaurant business. As a smart business owner, you should use this to your advantage. Not yet a business owner? No worries, you can still benefit from this. You can always use social media to advertise the opening of your business.

So, how and where do you begin?

Find a Good Location 

Jump start your food business by finding a good location. Look for a place that is accessible, especially to your target market. Is the place near a school, a hospital, or buildings that house multiple offices? Does it have a wide parking space to make it easier for your customers to drop by and have a quick bite? Remember, location is one of the main keys to a successful business, be it a restaurant or a retail store.

Start Up Cost

Let’s face it, you can’t expect to open up a decent place if you are not prepared to shell out your hard-earned cash. A smart entrepreneur will analyze the start-up cost and the projected income or profit. This is where you consider the rent for the place, the wages you will be paying – of course, how can you start a food business if you don’t have a chef and waiting staff, right?

Specialized Skills

You will also need to work with people who specialize in different fields of expertise such as marketing, finance, leasing, legal agreements, and designing. Do not take the latter lightly because just like the food you serve, aesthetics can either attract customers or drive them away.

Interior Design

Working closely with an experienced retail designer is beneficial to your food tenancy because this person will be able to put your ideas on paper and eventually bring it to reality.

What will your style be like? What type of furniture will you use? Do you want the interior to be playful and have bold colors? Or will your concept lean towards the modern minimalist style? The last decision will still be yours, but an interior or a retail designer will be able to give you an insight of what will work best for the type of food you will serve and the people you wish to cater to.

Our designer, Alisa, can guide you from the start of the design process up until you’re ready to cut the red ribbon and welcome your customers. She can also help you find a shop fitter who will give you an idea of the pricing and timeframes; as well as a graphic designer, whose main goal is to develop the perfect signage, brand and marketing for your new food business.

What are you waiting for? Pick up the phone and call our designer, Alisa on 0415199466 to discuss and document the start of your new business.

Marketing and Social Media

If you really have a strong desire to open up a small café, a restaurant, a pizzeria and ice cream salon or a good old bar and grill, it is best if you learn to adapt to the virtual world because it’s definitely one of the biggest platforms you will have. You will be surprised at how fast the word spreads online.

Combine mouth-watering food, good price, and excellent interior in beautiful snapshots and voilà, your business will go viral.