18 January 2018

Building on success: franchising moves to the next level

Bringing passionate franchisees together with some of the best loved brands in the UK and US is bound to generate some interest. Did HSBC's sixth annual 'Meet the Brands' event deliver the right mix?

The first thing you notice when walking into a roomful of franchising partners is the enthusiasm for what they do. For the franchisees and franchisors gathered at December's 'Meet the Brands' event, that enthusiasm, says Pip Wilkins, CEO of the British Franchise Association (BFA), is the non-negotiable ingredient for success.

There's no compromise because there is a lot at stake as franchisors are increasingly looking for master franchise, area development, multi-unit and multi-brand investors "that can look after big teams of people and be able to use those teams to grow", explains Wilkins. Success is firmly on the agenda, though, with the BFA "seeing a big growth in multi-unit and multi-brand franchising".

Indeed, with almost 30% of UK franchisees holding more than one brand (more than 50% in the food and beverage sector), many of the delegates "have grown from small beginnings into some very successful big businesses", notes Johnny Sellyn, MD of BFA official online partner, Whichfranchise.com. "These are very sophisticated buyers who want to know what global opportunities are available, and they want to evaluate franchisors with a serious interest in the UK."

Medium for growth

One UK firm taking opportunities as they arise is Amsric Group, a multi-brand franchisee of KFC, Starbucks and Anytime Fitness. Director Amish Patel sees 'Meet the Brands' as "being all about engaging with what's happening in the market". In a saturated space, he feels "it helps us spot new opportunities".

With Amsric a 25-year franchising veteran, Patel still sees the market as being very strong. In fact, he adds, many businesses are now looking at franchises as "a new medium for growth".

Clearly more franchisees are looking to add to their brand portfolio: HSBC's 2017 lending and approved pipeline of over £1bn is up from around £100m three years ago. This, says Andy Brattesani, HSBC Head of Franchising, confirms the level of growth.

A global market

With HSBC teams now in the US, Canada, Mexico and France, "we are re-affirming our long-term commitment to franchising globally", says Brattesani. Indeed, the French team was on hand to encourage HSBC clients to explore opportunities at the International Franchise Market Place in Paris in March 2018.

'Meet the Brands', along with providers such as Whichfranchise.com, helps investors "explore different brands throughout the world", says Sellyn. One of his clients is Christina Hobbs, Director of Franchise Development for US restaurant chain Melting Pot. Her team, which made the trip especially for the event, is seeking its first UK franchisee.

This thought is echoed by another US brand attending the event. Wendy's, the third largest burger chain in the world, has "aggressive global growth goals". For Mike Yurick, VP International Infrastructure & New Market Development, "when you find local partners that know the market, they will be better at operating it than if we start from scratch". With this in mind, he found the event to be a "productive and well-organised forum for potential investors to network with my team".

New entrants

The intensifying franchising space has seen some firms change tack. Lisa Johnson is Marketing Director, Franchising and Business Development at Casual Dining Group. She oversees long-established brands such as Café Rouge, Bella Italia and Las Iguanas. In the past, the Group has largely been reactive to franchise requests. It now favours a proactive model.

"We're seeing a lot more interest in our brands from people who previously did not realise they could be franchised," Johnson explains. By taking the time to develop its dedicated franchise team and operational support infrastructure, Casual Dining is now internationalising its presence.

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