UPFRONT: Why this franchising enterprise was doomed to fail

UPFRONT: Why this franchising enterprise was doomed to fail

This story about the varying fortunes of a UK roadhouse offers some basic lessons in franchising, says Ross Gilfillan

There’s a riverfront bar and grill just over the bridge from the street where I live. The building consists of an old brick house with a wooden annexe, tacked on in more recent years. It’s not much to look at, but it has one saving grace: its location. Set on a bend beside a gently-flowing river and abutted by hundreds of acres of cow-grazed water meadows, diners sitting outside the restaurant are treated to a bucolic scene which might have been painted by Gainsborough. 

The main road out of town crosses a bridge from which the bar and grill is highly visible. Making a success of a place in a location like this should be a no-brainer. And yet the place has passed through various hands and has endured fluctuating fortunes, even shutting its doors and barring its windows for a few years. This may be because its independent owners, who didn’t enjoy the proven system and recognisable livery of an established franchised brand, had been dancing in the dark when it came to providing what local custom wanted. A tried and tested full service restaurant, or maybe even a fast casual with a name everyone knew, would very probably have been a roaring success here.

So when the right thing happened and a franchise finally did open on this site, it should have been a runaway success, right? That, however, was emphatically not the case. If ever a franchise went wrong, this was this it. There were problems from the get-go. The brand owner had signally failed to connect with his new location: handpainted signs in a mismatched assortment of scripts, a gaudy exterior mural and blaring music in a usually tranquil location annoyed neighboring residents, who alerted the local press. The amateurish signs also gave intimations of the experience to be had within. And they certainly gave no sign that the food itself actually was good, if a little overpriced for the local demographic. However, good food alone could not serve this place the success it craved. 

The franchisor arranged a celebrity opening with plenty of razzmatazz and then appears to have left his franchisee, who apparently had only a hazy idea of what she had taken on, to get on with the job. Aggressive social media reviews were like nails in a coffin. Complaints were made about poor service, rowdy customers and the décor being way out of line with its surroundings. Perceptively, some comments accused the place of struggling to find an identity. After maybe a year of this, the franchisee was, it was said, surprised to find she had got herself into something she couldn’t get out of. Once more, the place is now closed.

The affair has been an object lesson for franchisors and franchisees alike. It seems clear enough that the full implications of the franchise agreement were not made sufficiently plain to the franchisee, who may not have fully understood the smallprint, and that franchisee support as we know it was not in place. This may be a tale of small-town franchising in a country where franchising is not as widespread as it is in the U.S. but like a fast food restaurant, it has its takeaways.

For instance, we are reminded of the supreme importance of rock-solid identity and branding. Of the necessity in some places of ensuring that brick and mortar businesses are sympathetic to their environment. That note is taken of footfall and the habits and tastes of potential customers. And, of course, it underlines the necessity of making sure that everyone is 100% certain of what they are entering into when they sign a franchise agreement.

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