Launching Franchise Restaurants in New Markets
There are many obvious to-dos for launching in a new market. However, franchise restaurants must also have plans in place for three priorities that are easy to overlook: having ‘boots on the ground’ to assist with training and ensuring brand standards, raising brand awareness, and assuring consistent supply chain services.
Boots on the Ground
Some franchises appoint area developers to serve as an extension of the franchisor in growing markets.
Goodcents, which is headquartered in De Soto, Kansas, just outside Kansas City, is currently expanding to new markets including St. Louis and Phoenix. We have ‘area representatives’ to develop those new markets, train new franchise owners, and serve as an ongoing resource for franchisees.
Area representatives are asked to invest in a defined geographic area that will be developed with a minimum of 10 restaurants – at least one of which must be owned by the area representative. An area representative receives half of the franchise fee for each location in their area. After a restaurant opens in their area, they receive more than a third of the royalties - or 2 percent of gross sales - from each location, for developing the area and supporting brand standards.
In this model, the area representative has a financial stake in the success of the new market. They are local owners working to develop a 10-store portfolio of which they can be proud.
Building up the Brand
Brand awareness is two-pronged for franchises. They must make sure consumers know about the business and its products or services, and they also have to make sure potential franchisees are aware of the opportunity that exists.
In the Kansas City area, everybody knows Goodcents. The restaurant concept is part of the fabric of the community. It is where youth sports teams gather after a game, where office teams order lunch for meetings, and where you pick up a family meal for a busy weeknight dinner.
But outside of the greater Kansas City area, Goodcents isn’t as well-known as some of its competitors. In addition to raising consumer awareness about the quality of the food, Goodcents had to raise awareness among prospective franchisees about what makes Goodcents a strong investment. To do that, Goodcents stepped up PR efforts and launched “brand awareness-building” ad campaigns in both St. Louis and Phoenix about the brand and the areas in development.
Before you can begin to grant franchise licenses in a new market, you must make sure your potential candidates know who you are and what differentiates your brand from the competition.
A restaurant franchise is only as good as its food, and food is only as good as its ingredients. That’s why Goodcents partnered with Sysco, a global leader in distributing food products to restaurants.
Working with Goodcents’ partner in Kansas City, the franchise recently added Goodcents proprietary items – food, paper goods, cleaning supplies – to Sysco’s distribution center in St. Louis. So, if a St. Louis location unexpectedly runs out of ingredients, they can be at a distribution center to restock in 20 minutes rather than the four hours it would take to get to Kansas City.
New Goodcents franchisees have many details to consider when opening their new locations, so sometimes it’s necessary to push some concerns to the back burner. However, having a local area representative in the market to support site selection, open the restaurant and train crew, as well as oversee branding and partner with an established distribution center, is key to success in a new market.
Farrellynn Wolf is CEO of Goodcents