Franchise Freedom - heavenly food without the headache?

By Richard Fox

- Last updated on GMT

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Want heavenly food without the headache? Then why not consider the franchise route. Richard Fox looks at one way of escaping the pub kitchen

Want heavenly food without the headache? Then why not consider the franchise route.

Richard Fox looks at one way of escaping the pub kitchen

On the surface it's a no-brainer: put some tasty morsels on a menu, stick somebody competent in the kitchen, turn on the gas and wait for the punters and the profits to come rolling in.

The reality, however, is more like an episode of Ramsay's Kitchen Nightmares: charlatan chefs turning your previously sparkling kitchen into a no-go zone, a monthly veg bill that looks like the gross national product for a small nation, and no sales to back it up. OK, so you fire, hire, and go through the whole grisly process again in the hope of unearthing a budding Jamie, full of the pukka enthusiasm of a newborn lamb. Fat chance.

Forgive me if I sound all doom and gloom, but I've had personal experience of every variation on this theme. You start to learn a few things: namely, as my O-level French report said: "Richard constantly repeats the same errors until I despair".

All you can really do is to take steps to minimise the risk, and ensure damage limitation when things go wrong.

Of course, there are a large number of busy food pubs with highly-competent chefs producing top-notch dishes and a healthy GP. Here, it's a case of "if it's not broken, don't fix it". What we are concerned about is a very different scenario.

I began my bar-running career in the kitchen - executing my core beliefs in what quality bar food was all about. The problem is, the nature of management means you are required to be all things to all people in all places. So, having established my menu and standards, I thought it would be no problem to hand it over to a competent cook to continue my legacy. How naïve.

For a start, if it's not your business, where on earth is the incentive? If you're lucky you'll just experience corner cutting and a little too much wastage. In the worst case, you'll lose customers and end up subsidising the dry sales from the wet. This is the most worrying scenario, because if margins are tight already, this can tip things over the edge and send the business into free fall.

It's well worth considering the food franchise option before this happens. Of course, there are other reasons for going down this path, other than kitchen meltdown.

Lack of consistency through staff turnover was one of the key reasons that the Coach & Horses in Harrogate, North Yorkshire, has taken the franchising route. As manager Chris Clarke observed: "Where there's no incentive to earn more money, keeping chefs long term will always be a problem, and inevitably lead to inconsistency."

What exactly does it mean then, both for franchiser (the pub) and franchisee (the incumbent)? As far as the pub is concerned, a rent is received for occupying the kitchen space, which should also include an amount to cover heat, light and power. The pub will also usually offer the service element, given that the staff are behind the bar anyway.

The franchisee will, for their part, provide a complete food operation, from purchasing to cooking. The advantages to the pub are quite simply that it has no kitchen wages and associated overheads. It continues to enjoy the benefit of the wet sales that come with food, but with none of the headaches. There is also the financial consistency of receiving a fixed monthly or weekly rent, although this may vary if it's linked to food turnover.

The question may be raised that, if a food operation isn't viable to the pub itself, why should it work for a third party? Well, it may be that you just don't want the aggravation of the food side. But as Chris at the Coach points out: "Franchisees treat the whole thing as a business, as opposed to a chef who will just do what they're told." Incentive is a marvellous motivator.

Another reason for franchising out may be that food isn't your area of expertise. Leaving something you don't understand in the hands of a paid employee is a precarious situation in any industry, let alone one where you're dealing with perishable products.

Clearly there are pitfalls and matters for concern following the franchising route, namely that you're handing over an important element of your business to a third party, and, therefore, relinquishing a certain amount of control.

The best way to minimise this risk is to agree a rolling one-month notice period for both parties. From your point of view, this provides the security of a "firing option", and because the franchisee isn't technically a member of staff, you don't have the legal issues relating to employees. As far as the franchisee giving you notice, the chances are that if it's not working for them, it's not working for you.

Chris makes another important point regarding the franchisee's approach: they should "appreciate the existing clientele in terms of prices and food". Let's face it, you don't want your no-nonsense, neighbourhood boozer turning into some culinary playground for an aspiring Heston Blumenthal, any more than you want someone nipping up to the nearest Kentucky every time a food order comes in. The key is to agree a menu before the franchisee starts, and ensure that you have the final stamp of approval. But above all, maintain a high level of flexibility and co-operation, and you have the chance to enjoy many years of mutually successful business.

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