Select Page

Food Franchising

Franchising is one of the most effective growth and expansion strategies in almost every line of business. The food business is also one of them. And there is no dearth of examples to showcase this. This includes brands like KFC, Pizza Hut, Dominos, Burger King, Taco Bell, McDonald’s, and Subway and this list could be stretched for a mile. However, the success of the franchising model is not confined to global giants like these. Today, even small and successful local food businesses like restaurants and cafes use franchising to expand their market dominance. In markets like India and Brazil, the food franchise business has turned hyperlocal. There are local brands with a presence even in adjoining localities.

Verticals within the Food Business with high Demand for Franchising

Restaurants

The restaurant franchise model is one of the most popular and successful business models in food franchising. In restaurant franchising, business owners or entrepreneurs invest in an existing restaurant brand and operate one or more restaurants under the same brand name.

Franchising of a restaurant business has several benefits. This includes access to a proven business model, marketing and operational support, and training. Because franchisors know the ins and outs of the business, they also provide business support and guidance to franchisees. This helps the latter overcome challenges and grow their business.

As restaurant franchise consultants, we emphasise that it is important for aspiring franchisors and franchisees to carry out research on business/industry, potential partners, markets, consumer behaviour, demographics, financials, and legal obligations involved. Many hybrid business models have emerged in recent years. For example, a relatively new model is the FOCO model restaurant franchise. In this model, the franchisee owns the business but the business is operated by the franchisor.

F&B Kiosks

The Kiosk model franchise is used for all types of food businesses like tea, coffee, ice creams, shakes, etc. One of the most prevalent forms of kiosk franchising is found in the beverage category. If you visit a market or mall, it is highly likely that you would come across one or more of renowned beverage kiosks. They need not be global brands.

Relatively speaking, franchising a kiosk F&B business is one of the simplest forms of franchising. But this comes with the caveat of ensuring the effectiveness and efficiency of planning and implementation.

Franchisees benefit from the prevailing brand recognition and customer loyalty that comes endowed with an established kiosk F&B brand. Franchisees can inherit a successful business model and reach faster business growth than if they were to start on their own from scratch.

Here are two case studies explaining how YRC helped two brands achieve scale and expansion – Yewale AND Kiosk Kaffee.

Café

Franchising of café businesses has become an increasingly popular model for new-age entrepreneurs, especially in cities with quick urbanisation and a robust share of a younger population. So, if you are in a city or state where these two criteria match and you are contemplating starting a café business, franchising could be a smart strategy for a quick and easy entry into the market. Needless to say that franchisees gain access to an established brand, an already proven business model, operational and marketing support, assistance in and sometimes, also training facilities. But it does not take away the need to develop a robust cafe franchise business plan.

Confectionery Retail

Franchising in confectionery retail is a slightly tricky affair. Small and medium-scale businesses that are locally successful tend to show a certain degree of reluctance in expanding their business via the franchising mode. Confectionary products like sweets, cakes, cookies, pastries, sandwiches, etc. come with a human touch. There is a certain degree of local expertise that goes into making these recipes. People in different cities may not have the same taste buds or may appreciate the products the same way which otherwise makes the same products successful in a host market.

The right way to go about confectionery retail business franchising is winning on trust and confidence. Therefore, in any confectionery retail franchising like a sweet shop franchise model or dry fruits or business franchise, the three important aspects to be brought under consideration are maintenance of trade secrets, robust operational planning, and transparency and consistency in audit and control.

Hotels

Since the mid of this century, the hotel franchise business model has been a widely-used growth and expansion strategy for many reputed hotel brands around the world. It is a proven strategy for globally expanding a hotel business. But like any other business, hotel business franchising has also evolved. Contemporary hotel brands are shifting towards the asset-light strategy. While localisation emphasis has always been an intrinsic strategy in the business of hotel franchising, having multiple sub-brands to cater to different market segments is a relatively new addition.

How YRC can help

Franchise Strategy Development

Developing a franchise expansion strategy must take into consideration the features of the brand in question. Every brand has a different positioning and also, every business has unique constraints and capabilities. So, there is no such fit-for-all franchise strategy. The franchise strategy is about mapping out the most feasible working model benefiting both the franchisors and franchisees. It involves the assessment of various models like only-production, only-distribution, production-distribution, business format rights, etc.

We assist our clients formulate the best franchise expansion strategy for their business. In addition, our franchise development specialists work on developing master franchise structure and international franchising plans for quick implementation, adaptation, and expansion.

Franchise Model Development

In formulating franchise expansion strategies, one of the most common questions we hear is “How to formulate a robust and sustainable franchise business model?” Our team of franchise development consultants use SWOT analysis to assess the application impacts of various franchise models like COCO, FOFO, FOCO, COFO, and also, hybrid franchise models. We analyse different aspects of the business models identified to be fit for clients. Local and hyperlocal market conditions are duly taken into consideration.

Franchise Operations Manual

In Franchise Operations Manuals, every process, operation, and activity is defined in terms of

· Who
· What
· When
· Where
· How

The objective is to prepare a documented platform that will help franchises execute business operations as per the intended and established requirements and standards. Providing operations manuals help franchisors ensure that the franchisees can provide better services to customers and maintain brand standards.

Franchise Legal Advice

Done right, franchising is a powerful tactic for achieving quick growth and development in business. But it also puts at stake the brand and goodwill of a business. By not addressing the legal aspects of franchising, the exposure to business risks is further induced.

In franchise legal advice services, we deal in the drafting of franchise agreements, franchise disclosure documents and also, in formulating franchise exit strategies. Our specialists follow established processes to ensure that the necessary legal aspects of franchising are duly integrated into these documents. Typical franchise agreements we cover are franchise agreement for food outlets, restaurant franchise agreement, tea business franchise agreement, and other paperwork of similar nature.

Franchise Audit Report

We provide comprehensive auditing solutions to our clients engaged in almost any kind of franchise model. Our Franchise Audit Reports are designed keeping in mind the unique business requirements and the franchisor-franchising working commercial relationship. The objective is to examine the health and strength of the franchised business from all relevant perspectives while maintaining the best franchise audit standards. To help clients carry out these audits on their own, we provide them with franchise audit checklists.

Franchise Lead Generation Strategy

A franchise business plan is incomplete if it does not take into consideration franchise lead generation and the relevant channels of marketing. Keeping in line with the resources defined in the franchisor business plan, YRC business franchise experts will determine the best-fit franchise lead generation and marketing strategies. We assess the potential internal and external lead types and formulate options for a lower CAC strategy.

Franchise Setup Manual

After the franchise setup costs are established for the franchise store business plan and the relevant agreements are finalised between the two parties, it becomes important to define the franchise set-up timelines. To achieve fast setup as per the agreed terms and conditions, we create the necessary franchise setup checklists. Among other requirements, these checklists are attached with timelines.

Franchise Business Proposal

After the initial discussions and impressions on the potential franchise business opportunity, the next is developing the franchise proposal document. It is like a pitch-deck document used by startups to be presented to investors highlighting the attractiveness of the franchising.

Here, we provide franchise business proposal templates that are later customised as per clients’ specifications and business requirements. We also write customised proposals without relying on existing templates which is a good strategy for unique business ideas and propositions.

We deploy franchise pitch deck professionals in developing these proposals. They collaborate with graphic designers and virtuoso copywriters. Going further, we help clients filter and eliminate unqualified leads and close prospective transactions quickly.

FAQs

How to start franchise of my food business?

If you want to franchise your food business, these are eight steps to be followed:

Step 1: Make your company profitable. Nobody will invest in a loss-making brand. Create a niche. Define the value chain.

Step 2: Develop a franchise expansion strategy for franchising your business. Identify and examine the market potential and assess the prevailing and potential competition.

Step 3: Develop the franchise working model. Assess and make a decision on the best-fit model for franchising your business.  Popular models are FOCO, COFO, FOFO, active franchise model where you turn your own store into a franchise store, or any other hybrid model.

Step 4: Develop franchise operations manuals that will provide directions to franchisees on the practices and processes to be followed in operating the franchised business.

Step 5: Draft franchise agreements defining the terms and conditions of the franchising covering the rights and liabilities of both parties.

Step 6: Develop a guidebook containing instructions on business aspects site selection, lease negotiations, and the purchase of assets and inventory.

Step 7: Draft a business proposal pitch deck for the potential franchisees highlighting the advantages of franchising and the scope of success.

Step 8: Formulate strategies for lead generation and attracting potential franchisees. This could be a part of the franchise business plan (financial and commercial assessments).

Note: There is a reference to this answer from the next question ­- How to start franchise of my food business?

How to franchise my restaurant?

First, touch upon the basics of franchising a restaurant business:

  •         You have to ensure that your restaurant business is profitable
  •         Your restaurant business must be scalable
  •         Your restaurant brand must have a “niche” as a competitive leverage
  •         You must get your brand name and trademark registered by the appropriate authority

Now follow the steps outlined in the answer to the above question – How to start franchise of my food business?

How much will it financially cost to franchise my business?

The exact figures may vary. Here are some of the important costs involved in franchising a business:

  •         Purchase/development of systems/software for franchise business operations
  •         Hiring/expansion of teams to execute/support franchise business operations
  •         Investments into assets to establish/boost the capabilities of the value and supply chain

YRC Franchise Consultants advocate developing a franchise business plan encompassing:

  •         Sales and Operations Plan for at least 5 years
  •         Financial & Commercial Plan for at least 5 years
  •         Franchise Breakeven Period, CAPEX, and OPEX
  •         Franchise ROI and ROC
  •         Franchise Exit Terms and Financial Ramifications
  •         Franchise Revenue-Profit-Sharing Model
Is my business ready to franchise?

To ensure your business is ready for franchising, your business must meet the following four conditions:

  •         Your business is profitable
  •         Your business is scalable
  •         Your business/brand has a “niche”
  •         Your business has a registered trademark (under application included)
How do I sell my franchise business?

Here are some essential points for your consideration as a would-be franchisor:

Don’ts

  •         Do not go for any 3rd-party model; commissions and fees are okay
  •         Do not pitch franchise proposals without criteria; maintain privacy
  •         Do not deviate from your documentation and documentation procedures

Do’s

  •         Form your own team for attracting and generating franchise leads
  •         Be meticulous with the initial 4-5 franchisees before getting into paperwork: these initial entities will serve as your brand ambassador for the next fifty franchisees
  •         Develop and implement SOPs for managing leads till onboarding and operations
  •         Use delegation

Case Studies

Yewale Tea (150+ Outlets within 02 years)

Kiosk Cafe

DNS – Desserts & Shakes

Taza.iq

Nana Grocery Delivery- Saudi Arabia (50+ stores in 02 years)

Click here for testimonials

Get Advice for Food Franchising

15 + 11 =

Related Blogs

Mitigating Business Risks in Retail

Mitigating Business Risks in Retail

Welcome to the fascinating and lucrative world of franchising, where there are no limit for opportunities to the entrepreneurs, looking to invest in established businesses. Did you know that franchising is a significant contributor to the global economy and according...

read more

We work only for Visionaries.

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.