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Introducing: Franchising 2.0

Introducing: Franchising 2.0

Matteo Frigeri of Seeds Consulting discusses the organization’s unique approach to developing food franchise brands.

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Having worked since the beginning of my career with traditional franchise consultancies, I’ve experienced first-hand their strengths and pitfalls. Suffice to say, that old fashioned model persists in the market today, despite changing conditions.

When my partner David Liveing and I set out to create our own business in London in 2009, we wanted to bring something new and relevant to the market. Our previous personal and professional connection with food made creating the first F&B franchise consultancy an obvious choice.

It was not only down to personal preference, though. Unlike in the U.S. or France, the largest restaurant brands in the U.K. have traditionally seen franchising with diffidence: they were worried that having to manage a number of owner-operated franchisees with investment capability but no sector experience would make their (already high) head office costs skyrocket.

They were also concerned with weak franchisees’ covenants towards landlords, in a landlord market. Above all, it was the lack of control and brand reputation that shelved the model for its perceived risk.

Restaurant investment was hot with the private equity crowd and the U.K. is a much denser country than the U.S., or, to a lesser extent, France, from a real estate point of view. Being able to reach most customers by clustering restaurants within a two to three hour radius from London diminished the need for a more localized, franchise focused approach.

Many leaders concluded that franchising needed to be explored only by necessity: if a franchisee had an airport site, or if it was an established operator in a remote foreign market.

In our view, these brands were missing a trick. We made it our mission to appeal to such a sceptical audience by offering a more specialized, all round service.

A BESPOKE APPROACH TO FRANCHISING

Our franchising 2.0 method exists to benefit our clients operationally first. This is especially required in the case of young brands that need further “tightening” before they can be rolled out.

It also applies to international brands wishing to enter the U.K. market. It is about helping them understand the market and consequently localize their proposition in order to be more attractive to qualified potential partners.

Working with some of the largest franchise groups in the U.K., we are aware they expect the franchisor to do more than just turn up. The local adaptations that our team have performed often involve the main customer touch points such as menu line up, branding, and interior design to reflect the sometimes-sharp differences in taste profile, consumer habits, and design-consciousness between different geographies.

Once we are happy not only with the financial performance of the franchise, but also with its level of systemization – both of which we can assess by having an extensive selection of industry benchmarks by market – we usually go on to formulate a sustainable development strategy.

Part of this hinges on the choice of expansion method by market. We see the popularity of area development increasingly challenged by alternative options such as “manchising” – an arrangement whereby the franchisor operates the business on behalf of the franchisee, popular with fine dining establishments – or joint-ventures.

A lot of our contacts are corporations such as multi-brand hospitality companies and franchise groups that are open to the idea of non-traditional franchise partnerships. Franchising 2.0 is about catering to the needs of such experienced operators.

“When my partner David Liveing and I set out to create our own business in London in 2009, we wanted to bring something new and relevant to the market”

PUTTING ON A SHOW

Put into practice, our 2.0 philosophy gained ground with a number of brands that were looking not just for an expert in franchising, but for an extension of their business development team that could complement it with a wider contact book and insider knowledge.

A good example of such a company is The Avocado Show, the Amsterdam-based viral restaurant concept offering its customers an all-day menu of avocado-based food-styled classics in a cool setting.

This is a brand that is well designed, with a strong following, generating industry-leading returns, structured in all the key functions and run by leaders who have the vision and are invested in making the franchise model work for their franchisees.

Our initial brief was to streamline the brand’s training and opening process on the back of the management’s desire to provide outstanding support to ensure franchisee success. One of our operations directors, who has been involved with some of the fastest-growing brands here in the U.K., was able to help this dynamic company nail this key aspect of the franchise model. We then took on all international recruitment, from initial strategy to tactics and execution.

Through the years, we have developed the ability to identify priority geographies by reaching out to a network of food service consultants like us, who understand the local pulse of the market.

Thanks to this valuable insight, we are able to help our clients prioritize and focus rather than having a purely opportunistic, scattergun approach.

Once the overall strategy was agreed, we crafted specific tactics that allowed us to sign up the London and France markets. Both markets will see experienced local partners open the first locations in 2021. Our task as retained business developers continues with a focus on additional European markets and, increasingly, the Middle East.

Such strategy-led, sustainable growth could have not been possible had we not laid out strong foundations for the franchise program upfront. Using a franchising 2.0 method, brands can create a compelling franchise product that is much more likely to appeal to an experienced audience of existing multi-site franchise operators in the international arena.

AT A GLANCE SEEDS CONSULTING

Established: 2009

Location: London, U.K.

Contact: Matteo Frigeri, matteo@seeds-consulting.co.uk

David Liveing, david@seeds-consulting.co.uk

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