Franchise Focus Business News…

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:

An Entrepreneurial Dream

Who had ever heard of a vuvuzela before last week? Now it seems to be all that we can hear, even the players on the pitches during World Cup 2010 can’t hear each other plot their attack because of the almighty roar of the vuvuzela and when you look into the crowd there are vuvuzelas dotted everywhere – so where did they all come from? Someone somewhere has got to be making lots of money from the sale of the vuvuzela!

Today, the UK Premier League announced it would not be enforcing a ban on the vuvuzela during matches in the UK venues which means the instrument could very well be here to stay. Even though some have voiced concerns over the effect the instrument can have on hearing and others have complained of the nuisance it causes for players and referees, there are a number of entrepreneurs who are definitely very thankful and not in the least annoyed by the presence of South Africa’s most famous musical instrument.

Since the 2009 Confederations Cup which was also held in South Africa, the vuvuzela has grown in popularity as a supporters call at matches. The Times Live writes:

“The ubiquitous plastic trumpet, embraced as an emblem of the World Cup by South Africans and visitors alike, sells for between R20 for a simple Chinese import and R60 for a more contoured instrument, produced locally. ”Our vuvuzelas have the purest sound and they are the easiest to blow. A two-year-old could play it,” said Cape Town-based Neil van Schalkwyk, who claims he developed the vuvuzela seven years ago. Sales have grown from 500 a month to 50,000.”

That’s a pretty impressive increase in sales, even with the influx of the World Cup spectators. The sale of vuvuzelas has really been a retailer’s dream, with more and more producers creating merchandising options for teams and businesses to emblazon their logo or crest on to a suitably coloured vuvuzela – wouldn’t we just love a nice blue one with the Franchise Direct logo along the side!! Merchandising is something which can really boost brand prominence and is a great way to get your name out there. Emblazoning a business’ name onto a vuvuzela won’t necessarily help if they’re being handed out at a dignified business conference – unless you think the clients would be into “that kind of thing”, however personalised pens, sticky notepads and other office stationery can often be a welcome gift for clients and will mean that a business’ name stays on their desk all day long…each time they go to write a sticky note, the business name can be what they see on the top of the page!

So if you think you may like to sell personalised vuvuzelas, or maybe just settle for personalised pens, take a closer look at some merchandising franchise opportunities available on the UK market today. Here’s a video on how to play a vuvuzela - maybe turn the speakers down!

This week Barclay’s announced the initial roll out of their “contactless” method of payment for purchases of £15 or less, which is now available in two eateries in London – Subway and EAT. This new method of payment is exciting for small business owners, particularly within the food industry as it offers customers the opportunity to pay for their food quickly, without having to fuss with pins or signing for anything – simply place the card next to the contactless reader and off you go!

Julie Pottier, Services Purchasing Manager at Subway, believes that the future is contactless:

“Subway is proud to be involved with the first generation of contactless payments and pleased to be part of a payment revolution that is making life easier and quicker for consumers. Subway is sold on the innovation, and we now want to educate our customers that contactless exists, how it works and where they can use it.”

The method of payment will be especially appreciated during the lunch time rush, for those office workers who want to get their lunch and eat it while it’s hot and enjoy the rest of their lunch break. Subway have been outstanding in terms of constant innovation not just in terms of technology, but they have also really stood out as a food franchise which is dedicated towards offering a healthy alternative to traditional fast food. One of the first fast food outlets to detail the calorie counts on their menus, Subway has led the way in healthy eating and transparency between producer and customer, and the contactless feature is just another new innovation string to add to their bow!

What would you like to see your local food franchise introducing? Contactless, calorie details? Have a look at the video below to see Contactless in action!

“Young people have a “do anything” attitude; they don’t know that it’s not possible. There’s no fear of failure. And young entrepreneurs have the luxury of few responsibilities. Their naivety means they’ll try anything.”

Tom Hadfield
Founder of soccernet.com (at 12 years of age!)

Won’t somebody please think of the children? Apparently, we do! During the economic low, the UK’s young people have been busy starting their own businesses. A recent survey of 1,720 people aged 18-30 by the Prince’s Trust and the Royal Bank of Scotland Group, 41% of respondents said they aspire to start their own business, and 78% said they have a business idea. So what is the UK doing to help these exciting young entrepreneurs?

The global economic recession has had a significant impact on Generation Y (those born in the 1980’s and 1990’s) as a high level of unemployment and increasing competition for university and local authority training places has dampened momentum for the financial success of this generation. Official figures indicate that the number of 16-24 year olds out of work surged to 943,000 last September. In addition to this, the Dept. Of Children, Schools and Families recently revealed that 13% of 16-18 year olds are “NEETs” – Not in Employment, Education or Training. With widespread redundancy and a lack of new jobs, many employers have indicated they do not plan to recruit school leavers. It seems that the only option left for many is to start their own business.  Figures realeased by Durham University’s Centre for Entrepreneurial Learning indicates that more and more young people are taking part in early entrepreneurial activity. Of 2,500 students surveyed, 4% were already running their own business, and a further 17% indicated that if the right job is not available, they will either start their own business or become self employed following graduation. In addition to this, Prof. Cary Cooper of Lancaster University Management School says, “Generation Yers [...] understand that jobs aren’t for life any more. They have to create their own jobs because big companies are getting smaller. I think this generation realises that they have no other option but to be that way.”

Along with a £60 million a year the government began investing in business start ups in 2005, there are a number of organisations dedicated to the promotion of early entrepreneurial activity. The most active and influential of these organisations is The Prince’s Trust. The Trust’s Enterprise Programme “supports unemployed young people aged 18-30 to work out if their business ideas are viable and whether self-employment is right for them.” In 2007/08 the Trust helped 9,447 young people through their Business Programme – 2,536 of them were new entrepreneurs, while a further 6,911 entrepreneurs received ongoing support from a Prince’s Trust mentor. 59% of young people supported through the Business Programme are still trading into their third year. In May 2008 The Trust marked the 25th Anniversary of the Business Programme by celebrating the achievements of 70,000 young entrepreneurs who had received support. Further support can be received from Business Link, which we’ve blogged about before, Enterprise UK set up by the British Chambers of Commerce to provide advice and support to new and existing entrepreneurs, Youngbusiness.Net and NESTA, a group which invests in early stage enterprises. Benedict Arora at NESTA believes in the importance of investing in the UK’s young entrepreneurs “We’re talking about the whole human capital that we’ve got in this country that needs to be optimised. We can’t afford just to focus on the very gifted or the lone innovator, that’s not a viable model for putting the UK economy on a successful path for the future. We will be a poorer society, both financially and in other ways if we don’t push the innovation agenda.” In 2008/09 NESTA invested in five new projects (totalling £1.2 million) and 14 follow-on investments (totalling £1.7 million). They have a portfolio of 50 investee companies.

Many young people in the UK have taken advantage of the variety of financing and support options available to them to start their own business. Following years of substance abuse but with a lifelong desire to achieve success, Adrian Wheeldon started his own plastering business with the help of the Prince’s Trust. Adrian reflects on the help the Trust has given him, “They gave me £1000 grant and £800 loan to start up a plastering business. I bought all my tools and a small car. Because of my history, I thought there was no one on this earth who would give me the money.I had a mentor for over a year. He taught me about cash flows. Forecasting. Marketing. That sort of thing. He helped me step over that line of responsibility that I would never have crossed without his help. When The Trust said at first that I would have a mentor I wasn’t sure. But what it did, every month I met up with him, reminded me why I’d been given the money. I always dreamed of doing something like that. But I never believed it. But my mentor, coming out of his way to meet me at my house, just encouraged me to believe in myself.” Tom Hadfield took a different road to success, starting very young – at the age of 12, when he started soccernet.com. Tom grew his business and eventually sold it to US sports network – ESPN for $40million. Even though most of that sum went to the company’s investors, it gave Tom a foothold to be able to start a new business. Tom gives life experience the credit for his success, even though he is now studying in Harvard University, “being entrepreneurial was my alternative to university. I got to travel, meet lots of interesting people. That was my education experience.” Tom now sits on NESTA’s Innovation Programmes Committee. Even though Tom and Adrian have taken very different paths to success, they are examples of the type of success the UK’s early entrepreneurs can achieve.

Clearly, Generation Y are the future for the UK and business investment in this group will no doubt be an important investment in the UK’s economy. For the franchise industry, this can also have a significant influence on the path taken by the UK franchise industry. Early stage entrepreneurs can develop highly innovative business models, if these models are then franchised, the face of UK franchising can be changed and bring new exciting changes to the UK franchise economy.

Sources

http://www.nesta.org.uk/
http://www.youngbusiness.net/
“Young Pioneers”. June 2009. http://www.director.co.uk/
http://www.dur.ac.uk/resources/cel/GenerationZ-anewentrep…pdf
http://www.guardian.co.uk/money/2009/dec/12/starting-your-own-business

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