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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 Start a Food Franchise

It is no secret that the food and beverage industry is one of the riskiest industries a new business owner can enter. New business owners are faced with a multitude of challenges as they learn to manage customers, staff, suppliers and cost to name a few. There is a great opportunity for skilled operators who know how to set up a successful food business to offer new operators an alternative that is likely to be much more profitable and likely to succeed. A food franchise.

Have you set up a successful business and are looking at expanding the brand and creating more store? If you are thinking of expanding or franchising there are a number of you should consider to create a business that is both profitable and scalable.

Create a Business Plan and Proposal

Conduct a feasibility study before you decide to expand your business. There is a lot you can learn from analysing your current store and customers. Who are your customers? Where are they located? What works or doesn’t work about your current store? When you are looking at new stores this will help you to choose the right location and ensure that you can cater to your target market.

You need to have an outline of your short and long term goals, as well as the vision and values of your company. Prepare to pitch your business proposal to prospective franchisees. Make sure that you have the answers to whatever questions your prospects might have and you are confident that the business you are offering them will be both appealing and profitable for them.

Document what makes you successful

This process is crucial in every business expansion. Before you can replicate a successful business you must know what makes you successful in the first place and then you must document it in a way that it can be replicated. This applies to everything in your business; store design, branding, operational systems, staff. It is bet to work with experts who can assist you in this process. Sarah Cobb from Cariblue Franchising or Bryan Keen from How to Franchise Simply are both experts who work with business owners to document and systemise your business to prepare you for franchising.

If you are looking to expand a food business then working with a retail designer who has experience in Food Service design will allow you to document your design and ensure you have consistency in your store fit outs. A complete style guide also allows you to have insight into the fit out costs that will be passed on to your franchisees. Our designer Alisa can be contacted on 0415199466 to discuss your needs.

A Little bit of Paperwork

Preparing all the necessary legal documents is a critical part of franchising. Good legal advice will ensure that both you and your franchisee are well taken care of and protected legally. Do not leave your assets unprotected because if things go bad, this will surely be a pain in the neck.

Welcome Aboard

Once you and your prospective franchisee have come to an agreement that is beneficial to the both of you, the last thing that you need to do is to make everything official and start the on boarding process with your new franchisee. Planning this process through in advance and setting up the contacts your franchisee will need for marketing, store design, fit out, suppliers, and recruitment will make the on boarding process as smooth and seamless as possible.

Maintaining the good will that is associated with your brand will attract more prospective franchisees in the future. Make it a point to always put a high value on good customer service because it will make or break your business. To get started with franchising your business, call Alisa on 0415199466.