A person who is too entrepreneurial may find a franchised environment with strict business principles, systems and procedures too restrictive. Buying into an established franchise system also means paying management service fees and being locked into a contractual agreement for a set period of time. But, in the end, that is what makes the franchise and you successful.

FOCUS ON FRANCHISE FAST FOOD & RESTAURANTS

When the word franchising is mentioned, most people immediately think of fast food franchises and although franchising has expanded to include every imaginable business sector, food franchises will always be seen as the success pinnacle of franchising. In South Africa, franchising started in much the same way as it did in the USA – with fast food and some of those early brands - such as Milky Lane, Steers, Black Steer and Spur Steak Ranches - are still today the country’s top brands. Today there are 64 fast food franchised systems and 68 restaurant franchised systems in South Africa. Fast food operators are well established operating on average 72 franchised systems per brand, the highest average in any business category. There are some 4 600 fast food outlets and 1398 restaurants in operation. The average capital investment per fast food franchise is R736 000 excluding VAT and R1.78million per restaurant franchise. The upfront franchise fees in Fast Food and Restaurants are
R73 000 excluding VAT on average respectively.

If you are interested in buying into a Fast Food or Restaurant franchise click here to get a complete run-down of all the reputable franchises on offer.

Wayne Duncan, Director of Retsol, says that Ola Milky Lane received further affirmation in the Pretoria News Best Food, Drink & Entertainment Awards in May 2007: “Ola Milky Lane won the ‘Best Dessert Menu’ category, as well as ‘Best Ice Cream Shop’. We are delighted with these awards – it tells us that South Africa’s ice cream fans recognise and appreciate the quality of this top brand!”

The Generation Next survey, conducted during the first quarter of 2007, is an annual youth brand-preference study that tracks the evolving consumption behaviour of young South Africans. The survey is becoming increasingly important, as, according HDI Youth Marketers, the youth market represents the single largest proportion of SA’s population (53%). In addition, young consumers often influence the brand or purchase decisions of others – their parents, siblings or friends. The researchers identify three target groups, tweens (primary school, aged 8 to 13), teens (secondary school, 14 to 18) and young adults (19 to 23) and analyse preferences and consumption similarities and differences by age, gender and subculture.

Retsol (Pty) Ltd manages approximately 140 outlets across South Africa between Ola Milky Lane and Juicy Lucy. Bread Ahead outlets are either company owned or joint ventures. In addition, Retsol purchased a shareholding in Chicken King in 2006. There are currently 42 Chicken King franchises across South Africa, with another 10 planned for opening during 2007.

Craig MacKenzie (seated) and Wayne Duncan, directors of Retsol

BREAKFAST BRINGS BOOM TIMES

Who would have thought that breakfast – the first meal of the day, ignored by restaurants and fast food outlets all these years – has become the latest “rising sun” phenomenon in the food business. According to an article in the international Entrepreneur Magazine (June 2007), consumers have taken to going out for breakfast and eating establishments, whether restaurants or fast foods, who have largely ignored the breakfast market, are obliging and cashing in. Quick Service Restaurants like Wendy’s and McDonald’s have introduced new breakfast menus and even Starbucks is offering upmarket breakfast sandwiches. Even top-end restaurants, whether traditional or exotic, who only catered to the lunch and dinner trade, are now offering full-on American breakfasts to tap into this new trend and add to their bottom line.

SMALLER PORTIONS, SMALLER PRICES TO HELP CURB OBESITY

With obesity becoming a global health threat, restaurants are finding ways to help reverse the health risk by offering patrons smaller portions at smaller prices. With “eating out” here to stay and consumers flocking to restaurants and Quick Service Restaurants for breakfast, lunch and supper and in-between, and the choice in food never-ending, there is a move by restaurant chains to play a role in trying to curb diners’ propensity to obesity by offering smaller portions at smaller prices. In the USA restaurant group TGI Friday launched their “right portion, right price” menu, offering about a third less food then the regular size orders and cutting the price accordingly. Although some restaurant chains tried this tactic a few years ago, with little success, marketing experts believe consumers have become more aware of the problem of obesity and are ready to adopt new and “lighter” eating habits. But health researchers do warn that as eating is both a taste sensation and a visual experience and with the average person making over 200 food decisions a day, getting diners accustomed to ordering less in restaurants can be a habit that will take time to break. But, ultimately, if giving diners a healthier choice and they feel better for it, the food industry will be seen to be taking a pro-active stance to curbing obesity.