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Ribs and Burgers: franchise opportunities on the horizon

Million-dollar Australian meat and burger chain Ribs and Burgers has announced it will be offering select franchise opportunities in strategic locations both nationally and internationally.

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After years of consistent success growing to 21 stores globally in just seven years with its unique concept offering, the company made the move after countless enquiries from prospective franchisees. Franchise opportunities will be managed by Blue Coral Concepts – a franchisor committed to managing bespoke and fast casual F & B concepts.

Retailbiz this month spoke to Blue Coral Concepts’ Executive GM David Ovens about the secrets to successful franchising, what franchisees should expect from the opportunity and where to next for the Aussie chain.

  1. What prompted this decision from Ribs and Burgers to branch out to franchise opportunities?

The main motivation is the ongoing amount of enquiries. Over the last year or two, as the company side of things has progressively expanded and as we’ve opened up new stores, it has facilitated a bunch of conversations where individuals have contacted the company and said we’re interested in franchising. About roughly a year ago we started thinking about the conversations to franchise. Then in this last 12 months most of it has been to do with preparing all of the documentation you must have in order to be able to franchise. For example, if you reach out and say you want to be a franchisee you would expect us to provide you with all the information to be able to franchise – operating procedures, store design, equipment. There’s a long list and you have to have all that info ready before you go.

David Ovens

To answer your question directly, it’s mainly to do with the volume of enquiries and then there is a secondary piece which is there are some locations from an Australian point of view where we would probably never open company stores. If, for instance, you thought of Rockhampton, Dubbo, Cairns or Darwin, we would probably not in any reasonable timeframe consider opening company stores in those locations because from a company point of view it’s better to keep stores geographically cohesive. For example, if you’re in Sydney and you’ve got the Rocks, Eastgardens, Neutral Bay, you can have the operational management structure to oversee those stores reasonably easily but if you start having stores in independent locations it’s very difficult to keep an eye on and visit that store. So from a company owned and operational point of view it’s better to keep stores in a relatively tight geography and say “okay, fine, outside of that we’re happy to entertain the franchise relationship.”

  1. That’s interesting because clearly an important part of your franchise model is that it’s going to be underpinned by the ethos and business model that has come to inform Ribs and Burgers’ success today. But will each franchise stores have innovation or be different or will it adhere strictly to a clear-cut franchise model?

Well the fundamental principal of franchising is that you replicate. So from the point of view of say, for instance, menu and food it would be exactly the same no matter where you go. From a store design point of view I think it’s probably going to be an 80/20 ratio. 80 being a common footprint or common design element and 20 per cent increasingly trying to find ways to localise store design but not lose sight of the brand. So if we happen to be, for example, in the Rocks we might have some material, graphic, heritage that relates to the Rocks. Likewise if we went into another location we would try to integrate more into that area. But I would like to also add that the principal of franchising is we are all members of the same family behaving according to a set of guidelines. However, in the event a significant proportion of the franchise community feel there is an issue or some critical business issue they want to raise collectively, we would be very open to that conversation, because that’s really partnership.

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  1. Some commentators argue that the future of franchising is partly about being adaptive, so I think it’s interesting that you’ll be doing that to an extent.

I’d be using a different word. When franchising works well there’s a clear understanding of the relationship between franchisor and franchisee. It’s co-dependant. Like the relationship between a man and woman or mother and daughter, you can argue about different things but ultimately you know you are better off together and looking after each other than you are apart. We have a document written called the Partnership Pact, which is a one page document which simply explains to a franchise partner what they should experience from a franchise perspective and what the franchisee should expect from a franchisor and you can see they are mutually complimentary components.

  1. Will there be particular locations you’re scouting for? Fom what you’ve said sounds like you’ll be looking at reasonably localised areas that are outside of mega-cities?

We’ll be looking both within the major metro areas as well as outside. There’s a long conversation around site selection and geographic strategy but for example if we were to want to open a store in Wollongong that would be outside Sydney  so we would probably say that would be better off independent.

  1. It’s going to open up a vast array of opportunities. Already Ribs and Burgers have expanded a lot but this is going to be exponential.

I’d say yes in the long-term perspective because we don’t have a philosophical point of view about rapid expansion. Our view is rather to be slow and steady and manage that because it might take us 6 months to really have a conversation for us to feel comfortable with each other and talk and have common interests and may take X amount of weeks to get a sight, it takes whatever time it takes. We would rather argue over the long horizon there’s lots of opportunity but we’re not suggesting for a second we’re after rapid growth.

  1. Are we going to see changes in what company doing? For instance, now that there’s new franchise opportunities are you going to be revaluating the look of some of these franchisees?

Not from the point of view of being in franchising. As part of a normal process we’re always looking to update every year we want to update the store design and the latest imagery so we try to refresh and remain contemporary so in any given year we’ve moved the ball forward in terms fo making sure we’re always thinking about customer experience, aesthetic, immersion and likewise for the food. What’s trending what’s working, what’s not, should we pursue a particular menu segment. There’s been lots of trends in the past 6-8 years whether it be the gluten free conversation, vegetarian or vegan, all these things from a  food point of view fit into a provenance conversation – where did my food come from. As we see those trends evolve we  follow them. From a franchisees point of view they would expect that and that’s part of the relationship, an obligation on the franchisor to continue to innovate and evolve.

  1. There’s going to be some challenges in doing that as you branch internationally. For instance keeping up to date with these latest trends as they differ internationally. Do you see yourself being perceptive to trends in other countries?

I think as long as you stay true to the essence of what you do as a business. If you have that vision crystal clear on your brand concept it’s easier to entertain a concept around what may be idiosyncratic in one country vs another. We just opened another store in South Africa a few weeks ago and it is as good as an example of the brand as any store – it looks the same, feels the same so in that particular geography/culture our view was there’s no need to make any major changes. The only other difference in that would be the value proposition is slightly different because socio-economic profile in South Africa is not the same as in Australia. But that would be an obvious thing to take into account but from a food type, cuisine, flavours, menu design perspective it’s very, very similar but if you went to India, for example, where there’s much deeper cross-cultural issues associated with proteins and culture that would be a much more complex conversation.

  1. Coral concepts seems to be all about innovation so will we see more of that – for instance, embracing technology?

Yes. For example we’ve just introduced, irrespective of whether there’s opportunities around as franchisees, a loyalty application that has multiple benefits for customers not just about points and stuff. For anyone interested in beign a regular customer it’s a great way to be rewarded for your participation and loyalty etc, we’re always trying to evolve the conversation insofar as the digital side is concerned be it social, website design, the way people use search engines so I think that would be critical for us to do whether we’re branching out or not. If you don’t maintain a certain momentum in that regard you’re going to be left behind real fast. So from a tech point of view yes –  I’m talking about instore tech from a payment point of view – POS, payment systems etc that make it easier for the customer. We’ve all seen, for instance, pay wave technology and all sorts of tech to make it easier. There’s various ways people want to access the brand. It’s not just dine in – if you’re at a friend’s house or you’re having party may want it delivered. If you’re on your way home you may wan to pick it up on the way. In terms of tech and the channels in which customers want to use we have to do that.

  1. Personalisation is an increasingly important thing for online platforms. Will you be looking into utilising that?

Absolutely. Add this minus that minus that. I don’t think there’s any business today who can operate in an environment that doesn’t allow customers to modify to some extent. We have a plus minus system in terms of whether you’re talking to someone in-store or ordering online. We also have the naked burgers, so in this particular case it was anti-carb anti-gluten conversation so customers who for whatever reason don’t want the bread they can receive the same product in a lettuce cup as a way of offering customers a way to be flexible.

  1. And it’s also an opportunity to expand your market-base which is important as you expand globally?

Part of this is what I call the veto effect. Say for instance 45 of us are going for lunch and we say let’s go to Ribs and Burgers and someone says “I’m on a diet,” so If we don’t have an option for them then the group will have to choose not to use our brand so that’s the veto situation. As long as anyone can find something to enjoy. From our point of view we recently added some wrap options to the menu both for lunch and portability reasons. We’ve also got plated meal solutions, whether it’s salmon, chicken or steak as a meal as opposed to a burger or ribs so there’s a bit more flexibility as to how each member of a social group may want to use the menu.

In terms of differentiation I personally argue the fact it’s called Ribs and Burgers and has a whole range of ribs and burgers and on top of that has plated meal solutions with fish, chicken and steak. I think that makes the brand more accessible for more people on more occassions which makes the business work.

  1. When it comes to the supply chain do you guys oversee that or do people source ingredients locally?

The supply chain is managed exclusively by the brand, by us. There’s two or three reasons for that. One is all the food safety regulations and traceability. You want to know any customer in any location on any day wants to know that the burger patties or lettuce, tomatoes or bread have to come through a particular process so if there’s ever a question we know exactly who, what, when, where and why. Quality, consistency and traceability. So the supply chain is completely locked down from that point of view. However, from a franchising point of view say, for example, we open a store in Rockhampton and it’s very expensive to ship lettuce and tomato to Rockhampton and we suddenly identify someone locally that satisfies requirements from a food safety, traceability point of view so you would ask a  franchisee is it okay to source from this supplier locally. We’d say yes, we’re open to that conversation but let’s make sure that supplier has the appropriate discipline in relation to that product. We apply the same standards internationally.

  1. Anything else you want to mention?

From our point of view apart from not trying to be in a hurry and open a lot of stores fast, the other thing we’re genuinely committed to is the whole process of finding the right partners from an operational perspective. So you may have run a family restaurant, café or food business for many years and think “let’s try franchising,” or you may be or have been a franchisee or another concept or maybe have been an employee in the retail, food and beverage industry and may want to get going on your own business. So we would like to have conversations with people who have come from the point of view of an understanding of how retail, food and restaurants work. Because it isn’t necessarily an easy business so therefore having knowledge in advance of what you’re getting yourself into and what’s involved is very important because you come into the conversation with expectations that are much more manageable.