Catering in a franchise ecosystem: Part 1

June 25, 2013 | by Erle Dardick

Through my ongoing work at MonkeyMedia Software with many of the world's greatest restaurant brands, I'm inspired to write this column to address the ongoing confusion, distress, frustration and communication disconnect that I sometimes see inside franchise systems when it comes to growing catering sales on top of current franchisee assets.

This column is the first of a two-part series designed to open up the dialogue in regard to the role of catering in a franchise ecosystem. The second column, which will post in July, will take a look at how centralized services can play a large role to eliminate many of the issues faced by franchise systems in which catering plays a role.

It's no secret that the franchising model for growing restaurant companies continues to be a key driver in the restaurant industry. Just look around. Everyone is franchising! After all, who wouldn't want to collect an annuity-based royalty for the licensing of valuable intellectual property? The restaurant industry is no different than the music industry, the movie industry or even the software industry. Ours is an industry full of creativity, processes, proprietary flavors and cultures. It makes good business sense for us to leverage that IP across the globe. At least, it looks that way on paper, but the plan is critical.

A franchisee is an important part of the restaurant industry. Why? Because a happy franchisee creates positive energy. While a franchisee with poor skills can spoil the entire system and poison our brand culture, a happy franchisee will invest in their operations. A happy franchisee will defend our brands. A happy franchisee cares about results. And happy franchisees make more money.

So what makes a franchisee happy? Well, a happy franchisee is one that makes money. Yes, help them make money and we will have a healthy franchising ecosystem that will thrive, prosper and grow for many generations forward.

The franchising business is only successful if the franchisees believe they are getting timely services from the franchisors. Good franchisors understand this service dilemma and go out of their way to make sure they invest in the proper infrastructure to provide services to their franchisee community.

Our franchisees are our customers, and we, the franchisors are their suppliers.

The way I see it, as franchisors, we have perfected the franchising game. I recently attended a conference where the franchisee community makes up more than 4,500 stores in the United States. A few months prior, I was in the boardroom of a franchisor that has tens of thousands of stores around the world. Several days before that, I was in the field working hands-on with franchisees that only owned a few stores. I am fascinated by the business dynamics, which are consistent from brand to brand. Yet, I have concluded that within this legal structure we have created some systemic flaws in our business model.

In some franchise systems, we have created a deep divide within our franchisee communities through ongoing corporate leadership changes, the implementation of weak business processes and poor profiling of franchisees.

When it comes to catering, many of us have neglected to make this important sales channel part of our core business strategy. This is a fundamental shortfall in our thinking.

As franchisors, we must take responsibility for our lack of vision when it comes to catering out of our franchisee restaurants. Necessity continues to be the mother of invention and franchisees who have their homes mortgaged learned long ago that catering is an important part of their sales mix. Restaurant operators who are in their stores every single day already cater, and for years they have scrambled with their limited resources to fill the demand for catering.

In many franchise systems, good restaurant operators went ahead in earnest. Why? Because catering out of restaurants is simply smart business.

Every restaurant operator today has customers asking for catering services. In addition, every restaurant operator needs more sales to help make week's payroll and hopefully profits. Saying no to customers is never an option for any growing venture. Good franchisees find a way to do it. That's what entrepreneurs do. They just get it done.

As franchisors, we intuitively understand these dynamics because often we are the ones that help with franchisee financing. What a domino effect our community experiences when our franchisees fail. Like I said earlier, there is no more important operator to the restaurant industry than franchisees. They have incentive to work hard for consumers especially when they are heavily invested.

I propose that, as franchisors, it's probable that we make HUGE oversights when it comes to catering out of our restaurants. We don't understand the complexity of this channel well enough, and we treat it as if it doesn't really matter.

As franchisors, we've been playing catch up when it comes to catering. It's time to focus on catering operations.

Let's talk catering!

Topics: Business Strategy and Profitability, Catering, Customer Service / Experience, Operations Management

Erle Dardick
Erle Dardick is a 15-year catering veteran, business turn-around expert and author, and is best known for helping multi-unit restaurant executives create successful catering revenue channels. Erle founded MonkeyMedia Software to provide catering solutions to multi-unit restaurant operators. He also is the author of “Get Catering and Grow Sales! One Monkey’s Perspective: Catering Defined for the Multi-Unit Restaurant Executive.” wwwView Erle Dardick's profile on LinkedIn

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