North West Focus: Hydes seeks food incentive for managers
A matter of two years after taking the bold decision to franchise out food operations in most of its managed pubs, Manchester brewer Hydes is seeing some good financial returns.
Turnover at the Quarry Bank in Timperley, Cheshire, for instance, has increased by around 20 per cent since the decision and wet sales at the Friendship Inn in Fallowfield, Manchester, have leapt up by £100,000 a year.
Hydes tied trade director Paul Mercer believes this is because the deal, which allows the pub's manager or chef to run the kitchen as a separate business, provides more of an incentive to grow food sales. And in cases like the Friendship Inn, where the manager runs the bar and the chef runs the kitchen, the franchise frees up the person responsible for drinks sales to concentrate on that without any distractions.
In 2006 Hydes transferred a package of managed houses to tenancy, making a £300,000 saving in head office costs largely as a result of the reduced catering team costs. This new-found economy persuaded the company to try the franchise approach with food in its managed pubs.
Hydes is not entirely hands-off in the franchised businesses, though. It produces a 'dummy budget', based on historic performance, for each of the pubs involved and this is reviewed with the franchisee every month. All food sales data can be viewed by head office as it is fed through from the pubs' EPoS systems.Hydes owns the kitchen equipment, will replace it if necessary, and pays the utility bills and rates. But the franchisee is responsible for maintaining health and safety. This is also reviewed with them annually by the brewer.
"By and large it's working well," says Paul. "As well as the the head office savings you have the benefit of people having more of an incentive because they have a vested interest. If you can say to someone coming in 'the pay is X but you can make an extra Y on the food franchise' it's so much more attractive." n
Case study: The Quarry Bank
Keith Reagan had been managing the Quarry Bank in Timperley, Cheshire, for nearly two years when Hydes presented him with the option of taking the kitchen on as a franchise.
He did not want to recruit an external franchisee, so his partner Andrea Breen heads up the kitchen, leaving Keith to concentrate on the bar."Though it hasn't made us millionaires yet, it does work," he says. "The bonus is it actually drives the wet side because people are attracted by the food. We are a community pub, we know what the customers want.
"With the old branded Hydes menu they could go to another pub five minutes down the road from here and get exactly the same food. So we have worked hard to make ours very different."
The pub, which has a 70/30 wet/dry sales split, has moved away from a mostly microwaved menu and aims for 80 per cent fresh food offer to set itself apart.
