A good location sets up takeaway franchisees for success but getting the right site at the right price can be a challenge. As the financial landscape changes, some franchisors are creating their own opportunities.
To procure a good site with the right demographics, appropriate neighbouring tenancies, a workable lease term and a franchise-friendly rent, is an ongoing challenge for retail based franchise businesses. And although some takeaway food franchises have a high customer recall, each of the players in the arena is jostling for prime position and that is frequently in a shopping centre.
In almost any conversation with a franchisor about leasing the centre landlords were spoken of in less than endearing terms. But a global tightening of purse strings has squeezed the major landlords’ omnipotence and franchisors are adapting their plans to benefit from the landlords’ newly acquired realism.
Dave Milne, founder of Noodle Box, says there are a lot of great food concepts, particularly in the 70 to 100 square metre arena. “This is very competitive. You have to be pretty quick. We’ve had to adapt and introduce a 50 square metre model to make it more competitive.”
He is banking on bigger being better too: Melbourne’s Chadstone centre is the site of the largest Noodle Box, still under construction, at 140 square metres, almost double the standard model. [Read more here]
Wayne Homschek at Pie Face has seen franchise opportunities in linking with other businesses sharing a trading profile. “In Sydney some sites are also co-located with another operator, we’re piggybacking on City Convenience, just taking a footprint 30 square metres in their stores. This is the first one we’re working on now. Pie Face and City Convenience trade 24/7 and we are a quality convenience-baked goods outlet.”
The format lends itself to long trading hours so in locations like Darlinghurst and Kings Cross, outlets perform exceptionally well, says Homschek, providing a better return on assets. [Read more here]
Making the numbers work is a concern, whether that’s in the initial rental agreement or through renewals. So says Luke Baylis, co-founder of Sumo Salad.
“Rents rise every year by CPI plus five per cent so that’s a challenging component. We need to grow our sales by this much to be feasible. Our growth has been about eight per cent, however things change that you can’t always anticipate,” cautions Baylis.
The good news is that landlords now are more likely to embrace commercial rates than stick to their contractual figures, he says.
And thanks to a presence in all the better performing shopping centres the business model is now being expanded to street locations. [Read more here]
Steve Hansen, self-styled chief chook at fast food franchise here]