One of the biggest differences for franchisees that run food court stores and those that operate strip-sites is the amount of rent they pay. People considering becoming a franchisee in this industry are faced with the decision of either paying higher rent and having access to marketing and cleaning facilities as well a more reliable customer base and information about the type of customers that frequent the shopping centre, or, on the other hand, paying less rent and not having those facilities available to you.
But there are a number of other factors which potential franchisees need to consider before buying into a brand. One of these is staffing. “Typically the strip locations are larger and have internal seating, which generally requires more staffing,” Luke Baylis founder of Sumo Salad explains.
“There’s a little bit more cooking on-site because we’ve got more space so we can utilise the kitchen and change the actual functionality of the store. The other thing is that with the strip stores you’ve got more flexibility in terms of your design because you don’t have to conform to shopping centre design requirements. You can be a bit more true to your brand.”
While food court franchises may require less staff to operate, according to Katherine Sampson founder of Healthy Habits, staff are harder to find and retain in a shopping centre.
“It’s much more competitive to find staff in a shopping centre because there are so many other shops, and in the past, I’ve had staff that I’ve lost because the store two doors away is giving them an extra $2 an hour, she said.
“The other thing is also with paid car-parking in shopping centres. Staff are now saying that they don’t want to work in a shopping centre because it’s going to cost them $10 to park whereas in a strip site they can walk there sometimes … or they can park out the front.”
Sampson says that the fit-out for a food court outlet can also be more costly and complicated than that of a stand-alone store. Not only does a shopping centre require stores to refurbish when the lease expires, but franchisees are also required to use “premium fittings, premium signage and union-approved workers”. These are not requirements for strip-site franchisees, Sampson says.
Food court stores are also restricted to the operating hours of the shopping centre, so are generally open during regular business hours, whereas strip-site locations are often open earlier in the morning and later at night to take advantage of the pre and post-work rush where people come in to buy their breakfast or the family’s dinner. This, Oporto’s CEO, Jeff Fisher says, then raises the issue of security, which in general isn’t a problem for food court franchisees, as security guards and surveillance is another service provided by the shopping centre.
VALUE FOR MONEY
Regardless of whether your shop is located in a shopping centre or on the street, value for money is a fundamental part of the food-on-the-go sector. Together with speed of service it is probably the most important
consideration for consumers.
Souvlakihut’s franchise operations manager, John Portarianos, franchise operations manager, says that value for money is “paramount” in food-on-the-go market. Major competitors like McDonald’s are forcing other franchises to keep an eye on their prices by offering extremely well-priced meal deals like the $19.95 dinner offering that it is currently promoting, he explained.
“It’s very much about value for money, but also for a lot of them it’s about ‘can I feed my family for the cheapest possible price?’ Sometimes they don’t care what it is they feed them, but they want to feed them.
“The thing that we have that is different is that our product is quite a healthy product and it doesn’t have the same health connotations like other QSRs.”
Trios also believes that health is up there in what consumers are looking for in fast food, arguing that it actually outweighs price these days.
“Over the past 18 months we have conducted an extensive exit survey of customers at our Trios stores and the results reaffirmed our initial assessment that price is not paramount to a consumer’s choice or experience in a food court.
“Our exit surveys endorse that the top three emotional drivers for consumers are a) taste b) freshness … and c) nutrition,” director, Sam Elias said. “Surprisingly, price was ranked seventh in the list of emotional drivers”.
Franchises that focus on offering healthier fast food alternatives are often faced with the dilemma of offering prices that are competitive with businesses that don’t offer as high quality ingredients.
Katherine Sampson, from Healthy Habits believes that it’s all about changing people’s perception of value and getting them to understand that there is a clear difference between its product offering and that of other, less health-focused franchises.
“I think McDonald’s have made it very difficult for us because they advertise these $2.95 meal deals and $4.95 meal deals with Subway and it’s changed the way people perceive value in a food court. So if you charge them $9 or $10 for a sandwich with smoked salmon and avocado and capers and the onion and the cream cheese, they get offended,” she says.
“But they don’t realise that the quality is five times better. Because they think that they can buy something in a food court for $2.95 or $4.95, everything should be. So it’s been difficult with these big brands offering really, really low cost items … because there is the perception that we need to have lower priced items or that we are expensive.”
In an attempt to combat this, Healthy Habits has introduced a range of $4.95 products which include smaller sized rolls and half wraps.
Becoming a food-on-the-go franchisee involves more than just deciding which brand you want to become a part of. Store style, location, staffing, marketing and the proximity of competition are all factors which will influence your success as a business owner.