12 Do’s and Don’ts for a Successful Cafe Franchise
Do – make sure that your location is an ideal fit for your café model
Scouting out the right location for your business is crucial, and this is something franchisors can help with. For cafés it is important to take into consideration the franchise model and what store format will be the best choice. Some brands operate well within shopping centres as a kiosk style shopfront, whereas other perform best in stand-alone locations. Either way, a key consideration is the level of foot traffic, as this can help build up a mix of regular and one-time customers.
Don’t try to be everything to everyone
As in any business, it is important to acknowledge your strengths and weaknesses. When it comes down to it, it is better to be great at one thing, instead of being just average at a lot of things. For cafés this is especially true, as those who try to fit the needs of every customer often end up missing the mark. Often your franchise brand will have a focus, whether that be great coffee, atmosphere and customer service, or stellar menu – as a franchisee you should embrace this focus as this is what customers will expect when they visit your café.
Do remember to utilise your franchisor team
Whilst delving into the world of business ownership can be exciting, it can also be daunting. At first it can be tempting to want to manage every aspect of the business on your own, and at times franchisees believe that asking for help may give the perception they are struggling. However, the franchisor team is there to support you, especially while you are finding your feet in the early stages. So if you are unsure, want some advice, or even just the reassurance that you are going in the right direction, don’t hesitate to reach out.
Don’t ignore the back-of-house business
Front-of-house operations can become the focus of any café, as this is where all the activity and customer interactions happen. Although, it is important not to overlook the impact of back-of-house tasks on the overall success of the business. Things such as administration, financial planning and stock management are all vital to the everyday running of a café and the situation can become detrimental if these responsibilities are ignored. Keeping abreast of your businesses position financially not only ensures that you can pre-empt any cash flow problems, but can allow you to better plan for seasonal dips, expansion or refurbishments which may be required under your franchise agreement.
Do engage in local area marketing
Some franchisees feel that they can rely solely on the brand equity that is attached to their franchises branding, however it would be naive to think you business will boom using that alone. Local area marketing is an essential element of any franchise business and can aid in growing a loyal local customer base, expanding your potential reach, and creating a community around your café. Many franchise brands ask franchisees to contribute towards a national marketing fund which runs large-scale campaigns to promote the brand, however this should be done in conjunction with smaller-scale geographically targeted marketing. A great place to start with local area marketing is social media, it is a low-cost platform that allows you to showcase your café in your own way.
Don’t be afraid to share your ideas
Franchisor teams likely employ a mix of different people who focus on creative marketing ideas, sourcing lower cost suppliers and streamlining operations – but some of the best ideas can come from the people working in the business every day. While your franchise model is tried and tested for success, it doesn’t mean that the brand isn’t open to change. If you have a great idea that is working in your café and you think it could work in others, be sure to share it with your field manager so that it can be communicated with the broader network.
Do invest time in building and training your team
Behind every great hospitality business is a great team. Customer loyalty is often built because of excellent customer service, not just the quality of the product. Having the barista remember your regular order or knowing that you are going to get the same perfectly poached eggs every morning are the types of details that make you go back to a café again and again. Investing time in finding and nurturing your team will make all the difference, and if your staff feel valued they will be more likely to stick around.
Don’t forget to listen to your customers
Customer feedback is gold to any business owner, and in the hospitality industry it can help alert franchisees to problems they may not even have known were happening. The hustle and bustle of café ownership can mean that the business owner themselves may not be able to monitor every aspect of the day-to-day operation. As a result, if things are going wrong on in the kitchen, on the floor or at the counter you could be none the wiser. Feedback might not always be constructive criticism and may come in the form of suggestions or ideas. If you are finding that a lot of customers are making a similar request, it may be an indication that you need to make a change or implement something new.
Do invest in good equipment
There can be a lot of significant expenses when you are opening a café franchise, and it may seem tempting to opt for the cheaper option when it comes to things like equipment and fitout. However, in the long-run investing in high quality equipment and fitout will cost you less in the long run with lower maintenance costs and a longer lifespan. Your franchisor will likely have preferred suppliers who provide the required equipment for each new franchise location, and often they may be able to secure the goods at a discounted price. Do your research, read reviews, and talk to fellow franchisees about what is worth the money and what isn’t when it comes to your café equipment.
Don’t drain your working capital
Working capital is the lifeblood of any business and leaving yourself with no funds in the bank can put you in a risky position. Whilst there is no doubt you will have to invest some of your working capital to get your business up and running, you should balance this with debt finance to ensure that you keep some cash reserves. Utilising external funding to purchase tangible assets such as kitchen equipment, point-of-sale systems and signage means that you can retain some of your funds. Also, asset funding often uses the goods themselves as security, meaning you don’t have to risk your home or personal savings as collateral.
Working capital can be invested in marketing and promotion, which is vital in the early stages of your café opening. It is also a smart idea to have cash on hand in case of an emergency, or if you want to take advantage of any new opportunities.
Do think about future expansion
Even though thoughts of a second location may seem far off into the future, having an idea in mind of how you want to grow and expand your business is a smart idea. Having a long-term plan gives you goals to work towards and allows you to plan ahead in terms of scouting a location, securing funds and recruiting staff. Having a conversation with your franchisor about whether you aspire to be a multi-unit franchisee also allows them to keep you in mind when opportunities arise, such as exiting franchisees with a location in your area, or an opportunity for a new café.
Don’t give up when things get tough
Finally, it is important to remember that café ownership will be full of ups and downs. Whilst we trust that much of your franchisee experiencing will be positive, there will undoubtedly be times where you feel stressed or overwhelmed. In your franchising journey it is important to make sure that you have a strong support network to help you out when things get tough. This can be friends, family, fellow franchisees, and your franchisor team.