Franchise trends Dec, 09 2009

Trends in food franchising

With more than one family member working to fill in demand, people are eating away from home more frequently than at any other time. The dining habits of consumers are changing with changing lifestyles, the article throws light on the changing trends in

By Mahmood A. Khan
Professor, Pamplin College of Business, Virginia Tech
Trends in food franchising

We are witnessing an age when things are moving so fast that it will become very difficult for entrepreneurs to keep pace with the consumer demands.  With changing economic and social conditions, developing countries, particularly India and China have several unique challenges.  Population segments which were unable to afford earlier are now buying stuff which was not available to previous generation.  Examples include the use of mobile phones, fast foods, on-line ordering, call center demands, etc. All this has a big impact on consumer needs.  With more than one family member working to fill in demand, people are eating away from home more frequently than at any other time.  This can be in the form of having lunch during office hours, dinner due to the lack of time and energy to prepare food at home, ease of ordering food, and more people travelling due to the improved surface transportation.  All these have a big impact on dining habits of consumers and if we consider the millions of people in each market segment, the potential for food franchising is unprecedented.  Also, people are becoming more and more aware of ethnic foods and varieties.  In case of India, it is now common to find cuisines from south, north, east or west being served within one location.  An opportunity to try different cuisines is conveniently available. This changes the food selection pattern and food habits.  Hamburgers and Pizza are not Indian foods and does not have any semblance to traditional foods, however, they are now getting popular.   

Technology is changing the way we do things

Technological changes and the number of affordable gadgets have changed the way we used to do business.  Whether it is operational procedures, training, or management, technology is playing a big role.  These aspects are extremely important for franchising.  From farm gate to plate, technological advancement is changing the methods of doing things.  For example, it is much easy to trace food coming from a particular farm to vendor, food processing, and finally in the hands or plate of the consumer. Consumers can order food from their mobile phones, restaurants can have electronic menu boards, and essentially the entire process of serving food can be modernised.  Similarly, the delivery service is bound to grow tremendously in India.  Even providing lunch time deliveries can keep franchisees busy all the time.  

Simplicity of the menu items 

Considering the demand for large scale preparation, it is vital to have menu items

that are simple, easily prepared in a short period of time, and served conveniently. People are getting rushed for time more and more.  They do not have time or incentives to have very elaborate meals on a regular basis.  Food franchises sometimes resemble “filling stations” where people will stop to get petrol and move on. Carry-out or delivered food items are therefore becoming popular.  This requires that in addition to simplicity, the food should have quality retention properties at least for a certain period of time until the food is consumed.  This includes every aspect of quality from food characteristics to the packaging containers.  Considering the above mentioned facts, the success of franchising is based on simplicity of menu items.  Another indication that time is ripe for food franchising in India.   

Replication Capability

Based on the earlier point, in addition to being simple, menu items should be such that can be replicated easily.  The quality should be consistent to an extent that a food item bought from a franchise in Delhi should be a mirror image of the one bought in Mumbai or Hyderabad.  This again is the latent point of success of any franchise.  In addition, it should be such that personnel handling it can be trained to maintain consistency.  A product can be fine when prepared by one person and may not keep its consistency when someone else is preparing it.  This standardisation and multiplication of recipes, equipments, and processes are very important which needs proper training and development of operations manuals.  Again, carefully planned operational manuals are vital for the success of any franchise.  

Concept Development

This is the most important point that needs consideration in light of the trends discussed in earlier points. The food franchise concept has to be developed considering the consumer needs, quality of food items, replication capability, trainability, etc.  This is where many of the prospective franchisors as well as well established franchisors do not pay required attention.  It is the concept which keeps a franchise going for years.  For example, if we consider McDonald's their concept is simple, yet there are built-in points that make the franchise successful all over the world.  This is true for other franchises.  A franchisor should spend considerable investment in time, effort and resources in developing this concept.  It is advisable to get expert help in planning concept for franchising.  A restaurant may be very successful at one location, but it does not guarantee success at another location.  The concept should be unique, appealing, profitable and fulfill consumer needs.  Prospective franchisees should consider these points before getting into any franchise agreement.  



Any successful franchise will attract competitors and other businesses which will either duplicate or outdo the franchise concept.  It goes back to the “uniqueness” of franchise concept that keeps it from getting taken over by a competitor.  This uniqueness had to be carefully planned and built into any concept.  McDonald's, KFC, Pizza Hut, etc., have this uniqueness built into their franchise concept that makes them so successful all over the world.  That does not mean that there will not be other competitors selling similar items. However, a franchise should stand alone and be sustainable in spite of the competition.  For this marketing and promotion becomes important and therefore the need for having manuals describing some of the key elements of a franchise and how to proceed with the business. 



With the growing trends, it is important to corner the best possible location where this new target population is available.  Getting into prime location is also a trick of franchise success.  With proper visibility, access, and convenience, a food franchise can multiply and be prosperous. Another basic component of franchising is multiplication capability.  A franchise suitable for malls does not necessarily do well as independent business and vice versa.  A kiosk or a vendor stand can be more profitable and successful than a full size restaurant.  Thus, considering all these aspects, location should be planned for the success of any food franchise. 

The above mentioned points are interrelated and show some of the basic elements of a successful food franchise in light of the contemporary trends.  Elaboration of these points is limited due to space constraints.  In any case these points are not exclusive and there are other aspects of franchising that deserve consideration.  Hope this discussion will ignite the anxiety to get into food franchising among potential entrepreneurs.   

Related: 22 Mega trends in franchising

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