Franchise Focus Business News…

I decided to go back to basics with this blog post, and explain some basic franchising terms. So I got a little creative, and created this infographic which hopefully will explain franchising to those of you who are new to the industry. For more information on franchising, why not visit our franchise information centre?!

Recently, I spotted this article in the Irish Times on food franchise giant – McDonald’s. We’ve known for quite a while how diverse the Golden Arches franchise are when it comes to their international operations and also how dynamic they can be in terms of adapting their menus for different cultural traditions and customs, and for their increasing awareness of healthy eating. So news that McDonald’s in Ireland are to completely revamp all 82 McDonald’s outlets across Ireland in the coming months, in order to incorporate their new healthier image came as no surprise.

Following controversy and negative media which resulted from a series of productions such as the SuperSize Me movie and the book - FastFood Nation, McDonald’s overhauled their image and menus. This has led to a number of other food franchises following suit including Domino’s Pizza, Subway and KFC. This hasn’t protected them from receiving criticism however. Michelin Star chef Anthony Bourdain has called McDonald’s “The Evil Empire” and has taken drastic measures to discourage his two and a half year old daughter against the franchise by demonising Ronald McDonald and is also threatening to “dip something decidedly unpleasant in an enticing chocolate coating and wrap it carefully in McDonald’s paper”, leaving this somewhere he knows his unsuspecting daughter will find it so that she can experience “an early, traumatic, Ronald-related experience [which] can only be good for her.” The first time I heard about Bourdain was when my brother, a chef, gave me his copy of Bourdain’s autobiography Kitchen Confidential to read. So yesterday when I saw Bourdain’s comments, I immediately contacted my sibling chef via SMS who replied “K*&b end. Can’t beat the occasional big mac. Been known to slip one past the lips”. He later went on to cook for 50 people on a fancy yacht in Sydney Harbour, but refrained from serving them Big Macs.

So, is it the view of all food snobs that if food is “mass produced” then it is therefore completely unworthy of consumption? In saying that, McDonald’s meat is 100% Irish which is saying a lot more than other burger outlets in Ireland. I would never suggest that a trip to your local franchise restaurant is anything like a trip to Maxim’s, but it doesn’t necessarily have to be an example of bad eating.

Some foodies seem to believe that franchises eliminate the creativity involved in creating food and lack the diversity that a stand alone restaurant can offer, as they change menus every week in some cases while franchises tend to stick to the same menu for a longer length of time with no deviation. However, a lot of franchises adapt their menus for new markets and often source food locally and only what is in season. My fellow franchise blogger Donny recently visited India and commented that McDonald’s, after issues with the cooking of fries in beef fat caused riots outside their outlets, have become quite culturally sensitive and feature a varied menu with no pork or beef to respect religious beliefs.

I think perhaps education and moderation is key, too much of something is never good and I’m pretty sure that even McDonald’s and Domino’s wouldn’t recommend eating their products every day.  Enjoyed as a treat every now and then, food franchises offer lots of families across the UK the opportunity to eat out as a family and to eat from a relatively healthy and low cost menu.

In comparison, it’s a well known fact that a significant number of gourmet chefs add unknown amounts of butter and salt to their food to add to the flavour, except you don’t know how much because that information is not freely available in restaurants, yet it is with an increasingly amount of franchises. Visit the website of most of the leading food franchises, and I bet you will find details of the nutritional information for their products, Subway in particular have been very proactive with this freedom of information tactic. Domino’s recently carried out focus groups in the US and used the feedback to redevelop their recipes, see the video below to see the redevelopment in action:

Forbes recently published a list of the top 10 counties in which to do business, and with the recent publication on our sister site of the Top 100 Global Franchises, I thought it would be a good time to explore the world of US franchises in the UK.

Many US franchises use the UK as their gateway to Europe, and the reasons for this are fairly obvious. Both countries speak English as their mother tongue, albeit with some differences – tomato/tomato anyone?! The UK also has one of the largest and most advanced populations in Europe, at 60.9 million the UK population is only a fraction of the impressive 303.8 million people accounted for by the US, yet in certain industries such as media and retail, the UK can sometimes be seen as an add on economy to the US. Think about the UK media and the large role US brands currently play, as well as music, clothing, food and increasingly – cars. The introduction of a US franchise brand into the UK is not always without hiccups as many cultural and economic differences remain, however if the franchisor has considered these differences and implemented any necessary changes to make the concept more suited to the UK market, then there is no reason why their franchise opportunity should not be considered further.

The Top 100 Global Franchises detailed how the US accounts for the largest number of international franchise brands which includes household names such as McDonald’s, Domino’s Pizza, UPS Store, 7 Eleven, Pizza Hut, Subway and Ben and Jerry’s to name but a few. The UK accounts for only one – Intercontinental Hotels. The UK franchise industry has been infiltrated by a large number of US brands, yet it still has to make its mark on the international franchising field.

The UK ranked no. 6 in Forbes’ list of top countries for business, while Denmark took the top spot for the second year in a row and the US followed in second place. The list was compiled as a guide for entrepreneurs looking to expand their business overseas. Each country is ranked based not just on GDP or low unemployment, but on other influencing factors such as personal freedom, stock market performance, intellectual property rights and corporate transparency. As one of the four English speaking countries in the top 10, and with the biggest population after the US, it is easy to see why the US remains a huge target market for US franchises going global.

The infographic below details the various factors considered when Forbes ranked each country. Also, for those of you looking to find out more about US franchises take the time to explore our directory of US franchise opportunities available in the UK.

Top 10 Countries to do Business in

The British Franchise Association (bfa) last Friday, announced the finalists for this year’s franchise awards. In their 21st year, the awards celebrate franchising across Britain and in particular, highlight individuals which the bfa believe have contributed substantially to the franchise industry over the last year.

2009 was a particularly tough year for the UK economy as it struggled to regain its foothold amidst the great recession, so the awards should be interesting in terms of who the bfa have been the “saviours” of the franchise industry during its toughest times.

Split into three categories, the finalists are:

Franchisor of the Year Award

• Auditel
• Autosmart
• Bluebird Care
• Domino’s Pizza
• Driver Hire
• McDonald’s
• TaxAssist Accountants
• Wiltshire Farm Foods

HSBC Franchisee Support Award

• Countrywide Grounds Maintenance
• Monkey Music
• Revive!
• X-Press Legal Services

Express Newspapers Brand Builder

• Cook
• LighterLife
• Smallprint

The finalists are a good mix of both international brands (McDonald’s and Domino’s Pizza) and homegrown British franchises (Auditel, TaxAssist Accountants and Bluebird Care), as well as a wide range of industries from food franchises, to care franchises and right through to white collar franchises in the business and financial sectors. Last year’s winners, Franchisor of the Year – Countrywide Ground Maintenance (gold – first), TaxAssist Accountants (silver – second) and Wiltshire Farm Foods (bronze – third) appear again, marking each franchise as a major player within the British franchise industry.

The winners will be announced on June 2nd at a ceremony in Nottingham and more on the awards can be found on the bfa Franchise Awards site.

Our sister site, Franchise Direct.com has again pooled its extensive knowledge of global franchising to assess the world’s best franchises. We’re delighted to announce the publication of this year’s Top 100 Global Franchises.

According to the second annual list of the Top 100 Global Franchises, international franchising has gotten both more profitable and diverse in the last 12 months.

Here are the Top 10 Global Franchises for this year:

1. McDonalds
2. Subway
3. KFC
4. Burger King
5. 7-Eleven
6. InterContental Hotels
7. Pizza Hut
8. Snap-on Tools
9. Taco Bell
10. Ramada Worldwide

Generally-speaking, food franchises continue to dominate the Franchise Direct top franchise rankings. At a moment of economic difficulty in America, the emergence of new foreign markets, particularly in China and India, has allowed to food franchises to consolidate their business. These franchises are not purely profit-driven and we’ve seen franchises like McDonald’s take great strides in implementing eco-friendly solutions in their stores.

Health franchises are a sector that have enjoyed particularly fast growth, and Snap Fitness, a fitness franchise, and GNC, a franchised health retailer, have cemented their global standing in the past year. It’s also exciting that two franchises owned by women – Merle Norman and Jazzercise – maintain their place in our rankings.

More and more foreign companies are franchising their businesses and two new non-American franchises have joined this year’s Top 100. Canada’s Yogen Früz and Germany’s TeaGschwendner have made the list, bringing the number of non-American franchises in the Top 100 to 15. The UK’s InterContinental Hotels continues to be the top-ranked non-American franchise, coming in sixth place overall.

Economic projections by the likes of the International Franchising Association predict that 2010 will be a more profitable year both domestically and internationally for the world’s top franchise brands. As the so-called ‘global village’ gets smaller and smaller, expect well-known franchises to expand even further into economies all around the world. Franchise Direct will certainly be there monitoring the market to evaluate the best-performing international franchises.