Serving up the best in Food Franchising
Did you know that Australians spend over 130 billion dollars on food and beverages every year? Or that Australians drink over one billion cups of coffee in cafés, restaurants and take away outlets?
Then what are you waiting for? Join the world of food franchising!
The early days
Until the early 1970’s, franchising was virtually an unknown concept in Australia. That quickly changed with the arrival of the ‘golden arches’ along with two all-beef patties, forever changing the suburban landscape. KFC and Pizza Hut joined McDonald’s, and so began the story of franchising in Australia.
Since these early days, franchising has grown in leaps and bounds to include almost every industry and covers almost every product and service imaginable. The food sector of franchising continues to thrive and grow, with food franchises representing a large proportion of the franchising industry.
Eighteen percent of all franchise systems focus on accommodation and food, which includes fast food and coffee shops, with only retail franchises higher (27 per cent).*
Hungry for more!
Research shows that people are increasingly spending more and more on food and beverages. The value of food and liquor retailing in Australia grew by 4 per cent in 2012–13, to reach $141.4 billion.**
According to the most recent Australian Food Statistics Report (ABS 2011) household expenditure on food and beverages in Australia increased to an estimated $255 a week in 2009–10, up from $226 in 2003–04 and $222 in 1998–99. Meals out and takeaway food increased as a proportion of the total household expenditure on food and beverages over the same three survey periods.
Australian Bureau of Statistics research supports these findings, with the trend for spending on meals out and fast foods increasing by 50 per cent from 2003-04 to 2009-10.**
Australia’s love of food
Put simply, we love our food, and in terms of franchising the options have never been more prolific. From the early days of burgers and pizzas, we are now being served up more options than ever, and with growing concerns over our increasing waistlines healthy options have become popular in recent times.
In addition, more and more people are raising concerns of gluten intolerance, lactose intolerance, nut allergies, high cholesterol, diabetes… the list goes on! As food retailers, being able to cater for all kinds of food intolerances and preferences is becoming increasingly important. Responding to consumer desires is vital for sustainability in the food industry.
SumoSalad have struck while the iron is hot. The brainchild of Luke Baylis and James Miller, SumoSalad was conceived with the view that ‘fast food’ could be good, healthy food too. It was a unique lunchtime concept: a fast food outlet that sold made to order salads which were nutritious, delicious and convenient. Since its inception in 2003, SumoSalad has grown to over 78 franchise stores and six company-owned outlets.
Boost Juice is another healthy franchise success story. Since 2000, there have been over 350 franchised and company-owned Boost Juice stores in Australia, and in a further 11 countries worldwide. Boost Juice has taken the country by storm.
La Porchetta has over 70 restaurants in Australia and New Zealand, and are the market leaders in cooking quality Italian food with fresh ingredients. With the first La Porchetta Restaurant open in Melbourne’s Italian hub in 1985, they have been part of the Australian food landscape for 30 years.
Coffee culture has swept Australia in a big way. For most people, a trip to the shops cannot pass without stopping for a coffee, a long day at work wouldn’t be the same without the familiar take away coffee cup on our desk, and a long drive simply wouldn’t be possible without a mandatory coffee break! The coffee market has grown considerably in Australia in the last few years, and has proved to be a booming market for many franchisors.
The ever expanding list of franchise opportunities for those interested in a coffee franchise provides a wide variety of options for potential franchisees. Cafe2U is one of Australia’s most successful coffee franchises, with over 170 Australians successfully running their own mobile Cafe2U coffee van business. From a one-van coffee business, a decade on Cafe2U has become a bona fide global franchise operating in seven countries including Australia, New Zealand, the UK, South Africa and the United States.
Alternatively, there are a wide range of coffee shop franchise opportunities where coffee is served in stylish, relaxed and friendly surroundings, most also providing a takeaway option for customers. If you’ve always wanted to run your own café, then perhaps these options could be suited to you.
Australia has always been proud of its multi-cultural heritage and our cravings for food from all over the world is reflective of this. Our cravings are for food from all over the world - Indian, Thai, Spanish, Italian, Chinese, Middle Eastern and many more. Potential franchisees can choose from a variety of retail food options covering all kinds of cuisines. And whilst premium quality international food offerings often come at a higher price point, successful franchise owners will tell you that people are happy to pay a premium for a top quality product that is made exactly how they want it.
Of course, if we go back to where franchising first began in Australia, the fast food sector of franchising remains as strong as ever. With fast food outlets providing tasty, quick, and cheap food in all locations, from highways to malls and on the high street, the appeal for consumers remains high, and with many now providing healthy alternatives these businesses remain highly competitive in the industry.
Rules and regulations
As with any industry it’s important to understand the rules and regulations associated with the business, and this is extremely important when working in food retail. Janine Allis, Founder of Boost Juice and Managing Director of Retail Zoo, gave this advice for Business Franchise readers thinking of getting into the food industry:
“First of all you need to fully understand what it means to be in food, particularly healthy food. You need to be aware of the FSC (Food Standards Code), TGA (Therapeutic Goods Association) and the Health Authority. Then you need to consider what the ACCC rules are and of course if you get into franchising there is also the Franchising Code of Conduct. These are just a few of the governmental and industry bodies that have specific requirements when it comes to the food industry.
“This can all be very daunting and confusing, particularly when many of these bodies do not give you a clear answer on a question regarding the rules. But business always has its challenges. You need to just keep going, becoming a sponge and soaking up all the information you can possibly absorb. Information is key, because making a mistake in regards to any of the above Codes and Associations can not only cause massive fines, but can be terrible for the public relations of your business.”
Given the growing and changing food industry, the customer demand and availability of so many systems to choose from, which one do you go with?
First decide that you are interested in the food retail business. Then get together with your family and make sure they are interested in the food business – this is important not to overlook – as you will be spending a great deal of time in your new business.
You must then get with your franchise banker and put together a realistic sum of money you can afford to put into this new venture. This will most likely weed out some systems quite quickly – as the larger, more well-known food names come with a hefty price tag. They are strong, tried and tested and have proven success stories – but you must truly be able to afford to buy into this.
Once you have an amount in mind, you can begin to shop around. Are you looking for a particular location? Are you looking for a particular type of food or drink? Are you looking for a premised based business, or a mobile unit?
You will be able to narrow down your search, but don’t rush. If you get to your short list, it is time to take the focus away from the product and direct all your attention to the franchise system and the franchisor.
Get to know your franchisor
The franchisor holds the key. The management system, the operational procedures, the leasing agreements, the contracts, and the fees have been generated by the franchisor. Check the franchisors background – is it solid? Meet with him or her. Do they seem to be a person of integrity? Do they answer all of your questions openly and honestly? Do they invite you to do your own investigations into the company? Are they eager for you to talk to existing franchisees?
If at any point you feel pushed, rushed, bullied or even ignored by the franchisor – it is time to consider walking away. Hopefully though, the franchisor will be professional, honest and open.
The next step is to meet with several existing franchisees. While it’s fine to have all the manuals in place and have the franchisor tell you how great and successful the business may be, it’s the franchisees that have the real story. Visit them in their place of business, ask questions, and ask their employees if they enjoy working there.
One of the great things about researching food franchises is that you can simply drop in and eat. Be a random customer, visit several locations. Is the food good? Is the service good? Is it consistent from one location to another? Do the employees seem happy? Do the customers seem happy?
By doing as much research as you can you can gain the knowledge to know if you are making the right choice at the right time.
So if making coffees, flipping burgers, or if carefully crafting international cuisine whets your appetite for the exciting world of food franchising, you will most likely find that you have started on a fantastic path to success.
*Franchising Australia 2014 Report
**DAFF (Australian Food statistics 2011-12)