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Ask the Experts: Choosing a food-service franchise concept

By Karen Weldman

Q: What factors should a prospective franchisee consider when comparing various food-service concepts?

Karen says:
The location for your franchise is a key factor. Choosing the optimal space will depend on the specific menu and the daypart(s) when the business generates the majority of its sales.

If you are considering a coffee franchise, for example, you will need a location that is easily accessible for morning traffic. If you are considering a fast-food concept that specializes in lunch, on the other hand, you may want to be near a high school or office building, depending on your target customer demographics.

It is also important to verify the franchisor offers a comprehensive training program that will ensure you are equipped with strong knowledge of the food-service concept, including a keen understanding of the back-office logistics involved in running the business.

Another very important part of a franchise business is operations. In a solid franchise system, the franchisor will provide a strong operational team that works in partnership with franchisees to enforce its standards, attract new customers and build sales. With this in mind, you should expect ongoing visits from the support team, especially during the early stages of your business.

Further, as franchisees are generally mandated to contribute a certain percentage of their monthly sales to a centralized advertising fund, it is important to check how the franchisor administers this resource. Ongoing marketing initiatives should be geared to increasing brand awareness and driving sales, with a full calendar of campaigns to highlight new products and initiatives throughout the year.

Q: What are the key differences between operating a stand-alone, street front or mall food court location?

Karen says:
Choosing between a stand-alone, streetfront or mall location for your new food-service franchise is certainly an important decision. It is worthwhile to consider the differences seriously, so as to determine which option best suits your needs.

With a stand-alone concept, your customers will have access to front-row parking, which is especially helpful in inclement weather, and your establishment will serve as their primary destination, with less immediate competition. There can also be additional responsibilities, however, including lawn care, trash disposal, snow removal and ice management.

A location along a busy streetfront will typically offer only very limited parking, but increased foot traffic can more than make up for that. If you can be located next or near to a major ‘anchor’ business, especially, you will be able to attract a lot of additional customers. Of course, you have no control over which businesses could open next to you.

A food court in a shopping mall offers even more of a built-in customer traffic generator. People who would never have thought to stop by your franchise on their own will find you when they are tired of shopping and place impulse orders. There is a higher level of direct competition from other food-service franchises just a few feet away, along with additional distractions from other shops and services, but malls offer large crowds—especially during the holiday retail season—and a small food court location can be run efficiently by fewer employees, reducing labour costs compared to a stand-alone or streetfront restaurant. There is typically abundant parking and the franchisee is not responsible for landscaping, snow removal, etc.

Q: What traits make a food-service brand ‘evergreen’ and not just trendy for the short term?

Karen says:
Your business will become a destination specifically for the products it is best-known for. While introducing new products is important for your brand to stay fresh and relevant, ensuring your core products are well-maintained and always available is what will really establish your location for the long term and build customer loyalty.

Karen Weldman is vice-president (VP) of new business development for Canadian franchisor MTY Group’s express brands. For more information, contact her via e-mail at kweldman@mtygroup.com.

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