Franchising used to be a hunt for the talent and capital to build a network rapidly. But capital is not what Red Rooster is interested in. It's the talent. The directors have looked into the future and seen stable retail management as the forthcoming 'big' issue, which means keeping good people. That's the 'why'. Franchising is the 'how Many franchise systems run one or two company stores to stay in touch with the market and test benchmarks. Red Rooster has been one of the exceptions with just 30% of the network franchised, however this is about to change, as the brand confirms further franchising is a high priority.
Managing Director Frank Romano says retail is beginning to face a worrying problem in human resources. He says the trend is toward managers and up-and-comers who breeze into a job and breeze out with equal nonchalance.
"It's annoying, frustrating, expensive and disruptive," says Romano, "You find people, induct them, train them, come to rely on them, and then they disappear. But this is something the business community is going to have to learn to live with and we're starting now."
Romano says the company has looked forward to a point where Generation X is moving into senior positions and Generation Y is on (what passes for) a career path. Which is not far down the track. He says consultant futurists and business psychologists have painted a picture in which Generation Y is confident, fickle and expects to change jobs frequently. Given that Red Rooster has going on 400 outlets, the vast majority under the daily control of store managers, these briefings made the board perspire freely.
"We were clear that franchisees were staying in the system for longer than anyone else," he says, "They're running good businesses, seeing the rewards and looking to expand their territorial reach. There's a lot in this for them and a lot tied up. On the other side of the coin you have people in various roles with no stake in the business. They tackle their jobs earnestly and pleasantly enough but then they are gone. This is part of retail and across the board but it's accelerating."
At Red Rooster's 2005 convention, futurist Mark McCrindle told delegates that people in Generation Y (up to 22 years) 'don't care'.
He said that while it isn't deliberate, they expect a lot and are declining to grow up. Their parents have always consulted them about big decisions and they expect this to continue in the workplace. They believe they live above a safety net, and easily morph not only across roles and expectations, but across many categories of employment.
"Once it's pointed out you can't miss it," Frank says, "It's happening at the younger end of the Xers too. I think retailers can be forgiven for asking themselves 'Is it just me?' but it's not. We have a new generation to deal with and do business with."
Franchisees at the Red Rooster convention almost cheered when the franchising focus was announced. Many have had their eyes on additional territories for some time and a freeing up of the system puts a spotlight on their requests to the franchisor.
"We'll be reviewing all requests for more territory and maybe franchise some of our existing stores where it suits but there is a lot of room in the network for new blood and plenty of market to go around."
Regarding market, Romano's argument is that Red Rooster doesn't fit the bill of typical fast food. He calls it Family Meal Replacement — in other words, (fast) provision of much the same kind of meal that you would cook at home. He says there is very little competition in this niche.
"I don't know whether franchised expansion as a human resources strategy is 'new' in Australian franchising but it's interesting to see how neatly it slots in as a solution to an emerging problem."
Thsi article appears courtesy of
Red Rooster.
10-Sep-2007