Who is the new face in franchising?

Inside Franchise Business: Hombre Street Food Cafe & Bar has joined Franchise Retail BrandsEmerging brands with proof of concept in QSR or coffee, headed up by passionate franchisors, all brought together under one umbrella. That’s the vision for Franchise Retail Brands, a conglomerate that is building a diverse but synergistic portfolio of food and coffee franchise chains.

Right now the franchise business New York Pizza Slice and Mexican brand Hombre Street Food Cafe & Bar sit alongside coffee brand 1582, Sabatini cafes, and two new concepts – Crave Ice Creamery and The Dessert House.

Sean Corbin, managing director, explains that the goal for the group is to float later this year. “It was always our design to go to IPO. Many of our brands can utilise synergies in marketing, finance and legal to the supply chain.”

Already the business has its own roasting facility (12,000 tonnes of coffee in a single shift) and has options on other brands that are dependent on the company’s public listing.

It’s about picking brands that have a “strong runway and still considerable runway to go”, that have “a fair amount of growth in front of them”.

Profitability is paramount, and the brands will share some synergies although operate in disparate markets across the food sector.

Brand potential

Emerging franchise brands may be operating in one or two states; developing the brand by marketing interstate for instance.

“What we are looking for is a concept that is proven, that the supply chain, back end is in reasonable shape,” says Corbin.

Considerable due diligence is undertaken in the search for the next hot shot brand, he says.

“Some of them [the networks] have only one thing in common, the name on the door. We’ve tried to look at franchisors who put a lot of effort into the structure of the brand, the structure of the menu, and who know where they are going.

“It’s crucial for franchisors to ensure sufficient time is given to each brand. In a niche market, keeping on the franchisor is an advantage – they drive the brand,” says Corbin. “Their passion is the brand, we will be assisting them.”

Incoming franchisor Todd McGregor, managing director of newly signed New York Pizza Slice, values the back office, legal, accounting support. He says “our ambitions were inhibited by the need to grow organically” and joining FRB will give the business the ability to take the next step..

“We have a clear road map to get our brand out there.”

Being part of a big concern with infrastucture appeals to existing and incoming franchisees, he says. But he also believes the association works both ways. “I thought I could bring something to this, I’ve helped businesses integrate and grow.”

Getting multi-branding right

The success of a group of multi-brands is dependent on the level of synergy across the business.

It’s something Corbin can talk of with experience – he observed the downfall of the Allied Brands business at close quarters when as chief financial officer he became responsible for seeing through the closure of the group that comprised disparate brands Kenny’s Cardiology, Cookie Man, and Awesome Water.

“The issues were about discrepancies at the back end, nothing talked to anything else, there were no congruent marketing messages, no synergies and there were supply chain issues.”

It’s imperative that the team is drilled to understand all the brands within the portfolio, he insists.

But overall, sticking to a niche market is crucial. “We will not go past coffee and food,” says Corbin.

The QSR sector remains focused on three core menu items – chicken, burgers and pizza. This, despite the incursion of other cuisines and healthier choices driven by consumer tastes.

But taking a portfolio approach will ensure the business has brands in peaks and troughs at different times and that helps profitability.

The brands are not big mall brands so you won’t see them lined up together. FRB could support 15 disparate brands in the sector, with the right direction and an awareness of the space, says Corbin.

As the team grows there will be greater knowledge and expertise – why waste that by moving from the arena into another retail space he asks?

Corbin has “a considerable investment” in the business, has raised further capital and the business has more than 50 shareholders. He expects there to be between six and 10 brands when the business floats later this year.

Who’s on the team?

Corbin brings a decade of experience in franchising; legal counsel and company secretary Juliette Wright has worked with franchised brands such as Price Attack, Guzman Y Gomez, Top Juice and Crust. Also on the board is Robert Clark, founder and CEO of Crazy Clark’s discount stores and Rodica Titeica, chief marketing officer, whose experience includes Ardent Leisure’s Goodlife Healthclubs.