Follow the right formula and your franchise can flourish in a competitive marketplace

Nation's Restaurant News,  Nov 12, 2007  by Frank Steed

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Before franchising or testing your idea in a new market, review your economic model in three ways. First, put yourself in the franchisee's shoes and see if you would make money with the additional royalty and marketing expenses. Second, put your self in the banker's shoes and see if there will be enough money coming in to warrant a loan now and for future growth. And third, put yourself in a brand new, different-part-of-the-world customer's shoes and imagine them trying your food for the first time. If you've ever seen a non-Cincinnatian trying Cincinnati Chili for the first time, you'll know what to watch out for.

Quality No. 3: Ability to replicate Sometimes a restaurant is so tied to the unique personality of the creator that the magic is gone without them. For example, Spago and other Wolfgang Puck restaurants are just not the same without Wolfgang Puck himself.

A successful franchise concept needs to be able to be stamped out over and over again independent of the owner, founder or chef that contributed so much to the initial unit's success.

"The secret is to simplify and systematize the magic of the concept," shares Phil Friedman, president and chief executive of McAlister's Corp. "It's about taking something complex and distilling it to its essence so it can be replicated. For example, we knew the human touch was an important part of the customer experience at McAlister's so we kept that as part of our concept. We pour the drinks for the customers, bring their food to the table, and offer them refills at their table. It keeps the magic going."

Concepts in the meal assembly market, Dream Dinners and Let's Dish, are a case in point as to how important it is to have that magic. Clients go to a location to make a week of dinners to take home with them. The business proposition is sound, but what makes a particular unit successful relies heavily on the personality of the founding owners.

The actual, deep-down reason people go to these take-dinnershome concepts is only partially for the food. Customers are there to stand elbow to elbow with the owners and enjoy the magic of the conversation and social atmosphere.

Most franchised units will be run by hired management. You may find an evangelist who cares almost as much as you do about the business, but for the most part your idea will be implemented by people who do this for a job--not a passionate mission.

Think about the concept that you own or are considering investing in. Will it be a success without you? Can you imagine five locations with five managers with totally different personalities being just as much of a success? Quality No. 4: Ability to train Last, but not least, is your franchise concept trainable? Can you teach others to repeat the results over and over, with different people, in different parts of the country?

There are concepts that can be franchised easily and those that cannot--and some that are in the middle. For example, The Cheesecake Factory and Grand Lux are too complex to be repeated over and over. The concept grows by slow expansion through company-owned and -operated locations.