Gonzaga explains, “Landlords are important to the growth of any business. Similarly, Landlords rely on new businesses and franchisors to grow and fill their space with new developments…”
The problem is that, very often, the Franchises give the relationship over to the control of middle management in their organisations. Gonzaga insists that the relationship must be handled at the highest level – on both side – for meaningful collaboration and mutual success to occur.
“In the past, the relationship between the two has been adversarial. Over the years, we found that a successful relationship can be created if the Landlords have access to senior people,” Gonzaga says. “This is because they (Landlords) are more obliging entering into win-win situations.’
Everything can be turned into a franchise
According to Gonzaga, everything can be turned into a franchise. “A few years ago when we looked at the fish segment being franchised, we didn’t want to get in that type of business and now we are the market leader in this segment.”
Since then, Gonzaga and his team are noticing that there are certain segments (including the fish segment) which are getting formalized, “In the food segment we are seeing a big drive around the formalization of the lower LSM franchises and we think it is fantastic for the lower end consumers., “ Gonzaga explains. The trick is marketing to that LSM.
Marketing to the lower LSM is very different to marketing to customers in the upper LSM – there’s a lot more hard work than going on TV. Things are more visual as it’s believed that a large portion of the lower LSMs have poor eye-sight, according to Gonzaga, “simple things like the font size of a menu become important when you speak to consumers,” he says. One of the media innovations Taste uses is advertising on people’s walls – as a marketing channel alternative to traditional TV or print.. “In townships there’s some guy selling his wall. So we paint our logo on his wall and pay him rent every month.”
Aspirant Franchisors should truly understand what they are getting into
As someone who has been in the franchising world for more than 15 years, Gonzaga advises the aspirant franchisor to “… test your business model thoroughly and understand that being a franchisor is far harder then owning your own business because every time you ‘become a franchisor’ you are essentially selling a part of your business to a franchisee. And that’s what many franchisors haven’t really figured out.”
Carlo was a panelist at the Franchise Leadership Summit on 23 October.