The Bakers Delight franchise is thriving when many businesses are struggling. The boss of this organisation shares its secrets to success.
If you are considering becoming a new business owner or diversifying into a multi-unit operation, it’s never been a more critical time to make sure the business you choose will stand up in hard times. From humble beginnings in 1980 as a single bakery in Hawthorn, Victoria to becoming Australia’s most successful bakery franchise with over 700 bakeries in Australia, New Zealand and Canada, Bakers Delight knows a thing or two about weathering a storm.
There are key factors both internally and externally that should guide prospective franchisees’ decisions to ensure business success in an evolving retail climate. The key to being “bulletproof” is to look to the long-term.
The market
It’s tough times for most in the Australian retail economy. The hangover from the GFC is still evident, consumers are cautious, confidence is low and this is having a marked effect on sales for many retailers. In terms of the broader retail franchise market, the knock-on effect of the consumer lull has meant that on average industry franchise recruitment enquiries are on the decline. The latest PwC Sector Indicator Report outlined enquiries have fallen from an average of 40 per month in 2009 to 30 in 2011. Business owners are clearly tentative to take the plunge.
What does this mean for those prospective business owners who have the desire to take the next step? It means you need to do your homework. Even if you have the upfront capital to invest, you have to be extremely diligent in researching and finding the right business for you. In direct contradiction to the wider sector, Bakers Delight has not only exceeded its franchise acquisition targets in 2011 but has far more bullish expectations in 2012. There are many factors that make Bakers Delight attractive to small business owners who are looking for a proven system, with 31 years of experience to demonstrate just that. Consumer demand for fresh bread and a unique service offering has fuelled Bakers Delight’s longevity, and prospective franchisees are standing up to take notice.
Taking the plunge
If you’re considering becoming a franchisee, fast-growing franchises may initially grab your attention, but it’s difficult to know if they will stand the test of time and how they will support you if the market becomes volatile. Startups are still learning, and may not have the benefit of a proven and established system; a clear advantage of the older players in the industry. This is a key factor you should take into account when considering which business venture you want to buy into, as an established system is more likely to have training and development programs, ongoing operational support, and other invaluable resources specific to the franchise that have been constantly improved and refined over years of operation. Does the business you are looking into have all these things?
A franchise that is well and truly up and running is also likely to offer a likeminded community, as you become an integral part of their network. The opportunity to speak with other franchisees and share invaluable advice at conferences, marketing forums, and territory-based meetings, where you can talk through challenges with likeminded business operators, is absolutely invaluable and something that large franchise networks such as Bakers Delight, pride themselves on. Some franchises such as Bakers Delight also provide the opportunity to benchmark business performance against peers, which provides a strong source of motivation.
Another key factor to consider is whether the business has a product or service that will always be in demand even in tough times. Bakers Delight has stuck by its ‘bread and butter,’ baking fresh bread from scratch each and every day. Let’s face it, bread is not a passing fad.
Links with local communities reinforce that retailers like Bakers Delight aren’t a faceless brand. Bakeries are run by real people from real communities. Being involved in the community means that franchisees are able to build meaningful relationships with their customers. Personal service makes a huge difference. Bakery employees also get a lot of satisfaction out of giving back to the local communities in which they serve. There is a feeling of making a real difference to the lives of many and it brings staff, the franchise network, our customers and communities closer together.
New challenges
Bakers Delight credit much of our success to being able to respond quickly to industry trends and understanding the need to stand up to mass produced competitors. This year saw the introduction of $1 bread sold by the big supermarkets as well as movements to sell bread product that has a longer shelf life. This posed a challenge, and in situations like this, it is essential to stand by your brand position. And in Bakers Delight’s case, stand by baking high quality fresh bread, from scratch each and every day, while offering genuine customer service. This approach is paying off, with a prediction for Bakers Delight to turnover $587million globally in the 2011/12 financial year. Seeking out a business that isn’t afraid to stand by its laurels and tackle challenges head on should, be an important factor you consider when choosing a franchise, but also something you take on board when operating your own business. Don’t be afraid to respond to challenges as they arise!
The right decision for you
When it comes down to it, the right franchise depends on one thing: you. Your business will become a major part of your life, so it makes sense for it to be aligned with your personal interest and strengths. Consider, if you don’t buy the products you are thinking of selling, how will you convince a customer to buy them? How will you be able to demonstrate passion for your product for the next five-to-10 years? The best franchisees are people who live and breathe the brand. If you have a belief in the product and brand, you are much more likely to stay motivated and work your socks off to make your franchise a success.
You must be prepared to work hard and commit yourself. As you are your own boss, providing you with flexibility and lifestyle, but it also means you are accountable for your own success. Consider, will you still be committed in 10 years’ time? If you’re invigorated by your chosen industry and keen to stay ahead of the crowd, it’s likely this will only get stronger over time, making the long term commitment of a franchise a sound investment.
Summing up
Investment into a franchise does not have to be an intimidating undertaking. However, choose wisely, consider product longevity, established systems, ongoing operational support, and robust training and development programs which can provide you with the tools to operate a successful business. There is no doubt that being “big” and having a proven track record established over three decades has played a huge role in Bakers Delight’s continued success and ability to delight.
–Gabby Kelly is general manager, Bakers Delight Holdings
