Franchising a food joint? Don’t get too ‘greedy’

Dubai - Business model isn't a 'magic wand' — you need hard work and creativity to thrive and survive

Imagine taking a McDonald’s franchise and just relying on its global popularity and recognisability to earn. That’s a recipe for disaster.

And while indeed having a famous brand carrying your business is a huge advantage onto itself, doing the opposite — towing that brand with lots of hard work and creativity — would be the way to navigate through the challenging world of this business model.

The biggest mistake those involved in franchising make is the misconception that the model is an easy way to make money — and both franchisor and franchisee are prone to it, Ian Hyndman, managing partner at Dagaz Management Consultancy, told Khaleej Times.

For franchisors, it’s focusing on the upfront franchise fee without planning to support their franchisees; they don’t realise that the more successful their franchisees are — mainly, by helping them grow — the more royalty they can make out of it.

On the other hand, franchisees tend to get too excited about carrying a brand and assuming it’ll drag their outlet to growth; paying for the brand and betting on that without fiddling and being creative can also doom your venture. “It’s not a magic wand that allows everybody to succeed — you still need to work hard on it,” Hyndman stresses.

Another mistake made by franchisees is trying to implement a too-personal touch. For example, taking a franchise and then changing the name or adding on to it; that would lead to the perception that the brand isn’t the real thing.

“It just doesn’t work,” Hyndman added. “When you buy a brand name, you’re also buying a business system.”

Restaurants remain the most dominant sector when it comes to sales value of chain franchises in the UAE. According to Statista data, restaurants are pegged to grow to $3.014 billion (Dh11.07 billion) by 2022, compared to $2.43 billion in 2018, a leap of almost a quarter. Accommodation is a distant second with $824.6 million, followed by on-trade retail and leisure, all of which are also expected to expand.

Also, be mindful of which market you’re in: Menus should be tinkered with to satisfy local tastes.

“When franchising works well, there’s a commitment to the local community,” Rolly Brucales, managing director of Off The Hook restaurant, told Khaleej Times.

And not only should ingredients be fresh; the menu itself should be evolving, making it exactly that — fresh. This accomplishes two things: It keeps customers interested and gives the staff something new to perfect.

“It’s not just customers who’ll get bored; the team will get bored, especially the kitchen team,” Hyndman said. “You got to make things new so they have something to experiment on and to share to clients.”

— alvin@khaleejtimes.com