I know very few franchisors that wouldn’t like to increase their AUV’s.  It’s an incredibly important metric, and it directly impacts the ability to sell more stores.  Profit margins are of course the next most important metric.  

One thing I learned while being a part of a franchise organization, owners care about one thing more than any other, and that is how much cash goes into the bank account.  As a long time corporate restaurateur this was a very different take on running a restaurant than what I was used to but it also made a lot of sense.

Instead of measuring YOY sales growth, something that was a hallmark metric throughout my career, the real metric was YOY cash in the bank, clearly a very new metric, but also something I could relate to.

So what does this have to do with catering?  I had what was probably my third conversation with a smaller franchisee group that had an interest in starting a catering program.  They were in a place where AUV’s were not at a level that they needed, and they were pursuing a number of options on how to improve, catering being one of them.

From my past experience, I know that especially in a franchisee environment, implementation and support of catering by the franchisor to franchisees has a number of specific requirements and expectations.  What I mean is the franchisor is responsible for creating a program that the franchisee can roll out and implement with some significant level of support to make it successful.

Now there is more than one way to structure these programs but here are three things that become critical support pillars. 

1. Does the menu & packaging currently support a catering program?  Generally the answer is no, or at the very least needs some significant enhancements.
2. Can you support a centralized ordering flow?  From a minimum of specialized online ordering and manufacturing software to call center order support.
3. What support can you or are you willing to provide to ensure trade zone outreach?

 How the team responds to these three important parameters will tell me very quickly how serious they are in creating and supporting a catering program.

I am sure that many of you have read about the many struggles that restaurants are having to stay afloat and generate enough sales and revenue to maintain a viable if not healthy business.  The pressures on store level economics isn’t getting easier and restaurant brands are constantly striving to find new and better ways to drive both sales and revenue growth without resorting to more price hikes.

Developing a catering program is a fantastic way to do both, but it does require investment and commitment., I see many brands that never gave the catering channel any consideration when they were developing the concept, and that is fine, as I am sure at the time, which may be 5, or maybe even 10 years ago, probably wasn’t needed.

So here are my words of advice, for those brands that have relied on both dine-in, drive-thru, take out and delivery channels for sales, if you want to do catering you will need to rethink how your brand operates at all levels.  The idea that you can just bolt on a catering program and drive sales is frankly, just not possible.

Now, back to the three questions.  Let’s focus on #1 the menu, as this is really the most important.  The menu is your product, it’s how sales are generated and if you don’t have a menu that is conducive to catering then building a program is pointless.

So my question back to the franchisor is, are you willing to make changes and add products that will support a catering menu?  This may include a new protein, repackaging how you serve your food and several new sides, and I am not talking about chips and other starches, I mean greens, beans, and other sides that will create a well rounded meal.

Quick story, while working for JJ’s, a brand with no greens, beans or other sides, beyond chips we struggled to sell to corporate clients.  When we added salads, we increased our sales conversion by 100%.  Sadly, the franchisor found out, even though we were contracting these salads from another vendor, they shut us down.

The point of the story, be prepared to make some uncomfortable changes, if you want to do catering, the value is there, maybe not for every franchisee, but many will glady implement your program and become a model for others.

If you can increase YOY cash in the bank, I promise your franchisees will listen. A franchisee business with a solid catering program is worth more money.  It can increase your unit and development sales and increase your royalties.