In the midst of challenging economic conditions, franchise restaurant chains Lone Star Rib House and Outback Jacks are bucking the trend.
The two brands have actively addressed concerns raised by the franchising community, implementing initiatives to bolster support and improve the potential for franchisee profitability.
A combination of reduced rents, lower loan repayments and an attractive contribution package has allowed new recruits to circumnavigate the challenges facing the evolving sector.
The result of which has seen Lone Star and Outback Jacks enter a period of expansion, defying media reports that paint a dwindling picture of sector confidence.
Response to sector concerns
Throughout the parliamentary inquiry into franchising, much emphasis was placed upon the power imbalance between landlords and franchisees. In order to boost a franchisee’s potential profitability, Lone Star and Outback Jacks have negotiated with landlords to provide better conditions for new and existing franchise partners.
Michelle Christensen, company marketing and site development manager said getting the landlords on side was a critical step in improving franchisee profit potential.
“Motivated landlords are providing attractive contribution packages to our brands meaning franchisees do not need to borrow as much money to get up and running,” she said.
“These lower set up costs, therefore lower loan repayments mean our franchisees can maximise their profit potential. We are also seeing long occupied sites in prime locations becoming available. All this means attractive offers for prospective franchisees.”
The strategy is paying off. The group currently has five store fitouts in progress, with six currently under negotiation.
Christensen also revealed that the latest Rockhampton storefront achieved record sales, thanks in part to a new offering.
Menu updates
A lengthy market research process, including consultation from wider members of the sector encouraged the group to reassess its current menu.
Responding to consumer tastes is a challenge that many franchise chains have struggled to the adapt to. Christensen said the group had focused on listening to the feedback diners provided.
“Both Lone Star Rib House and Outback Jacks have recently launched new menus with an updated colour palette and art style which has been implemented across the brand,” Christensen said.
“The new menus have moved with current culinary trends providing more menu items for vegetarian and gluten free diners, as well as a new focus on share plate options across the Rib, Seafood and Dessert menu categories.”
New concepts
The rise in interest for Lone Star Rib House and Outback Jacks is also driving growth from an additional standpoint. Christensen revealed the group is currently developing a new specialist offer, capitalising on the growing craft beer movement.
“The ‘Lonestar Rib House and Brews’ concept which has been developed in response to the wider demographics’ interest in wanting to explore different types of drinks,” Christensen said.
“This sub concept has a larger beverage offering including craft beers, draught beers, wine on tap, and even moonshine. Each site is analysed to determine which brand will best fit the market in that location.”
Lone Star Rib House and Outback Jacks future
Lone Star Rib House and Outback Jack’s expansion announcement comes at an interesting time for the sector.
With reports of closure and mismanagement circulating several franchise chains, the opportunity for successful operators to gain extensive market share is growing. The key for eagle-eyed entrepreneurs looking to capitalise is a franchisor willing to support.
Lone Star Rib House and Outback Jacks’ commitment, not only to franchisee profit potential but innovation brings a much-needed confidence boost to the evolving franchised dining sector.