It’s no secret that our franchising model for growing restaurant companies continues to be a key driver in our industry. Just look around. Everyone is franchising! After all, who wouldn’t want to collect an annuity based royalty for the licensing of valuable intellectual property? The restaurant industry is no different than the music industry, the movie industry or even the software industry! 

A franchisee is an important part of the restaurant industry. Why? Because a franchisee can be good or bad for our brands, depending on the owner’s operating skills and more importantly, their attitude. A franchisee with poor skills can spoil our entire system. A franchisee with a bad attitude can poison our brand culture. Likewise, a happy franchisee creates positive energy.

• A happy franchisee will invest in their operations.
• A happy franchisee will defend our brands. 
• A happy franchisee cares about results. 
• And happy franchisees make more money. 

And if you are reading this, and I hope you are, making money is important right? Of course it is. That’s how we keep score as business people. Without healthy economics, we are out of business!

So what makes a franchisee happy? Well, from what I have observed a happy franchisee is one that makes money! 

Yes, help them make money and we will have a healthy franchising ecosystem that will thrive, prosper and grow for many generations forward.

I have further observed that the franchising business is only successful if the franchisees believe they are getting timely services from the franchisors. Good franchisors understand this service dilemma and go out of their way to make sure they invest in proper infrastructure to provide services to their franchisee community.

Our franchisees are our customers, and we, the franchisors, are their suppliers.

So what about catering in a franchisor/ franchisee ecosystem?

When it comes to catering out of franchisee restaurants there is a “BIG rub” for franchisors. What’s exciting to me, is that the franchisors that I have observed in recent years, that are implementing a “new strategy” when it comes to growing catering sales are winning. Winning big!

The way I see it, as franchisors, we have perfected our franchising game. I am fascinated by the business dynamics, which are consistent from brand to brand. I have concluded that within this legal structure, we have created some systemic flaws in our business model.

When it comes to catering, many of us have neglected to make this important sales channel part of our core business strategy. This is a fundamental shortfall in our thinking.

Franchisors are playing catch up when it comes to the catering segment – it’s our resources that franchisees want.  As franchisors, we must take responsibility for our lack of vision when it comes to catering out of our franchisee restaurants. Necessity continues to be the mother of invention and franchisees who have their homes mortgaged learned long ago that catering is an important part of their sales mix. Restaurant operators who are in their stores every single day already cater, and for years, they have scrambled with their limited resources to fill the demand for catering.

In many franchise systems, good restaurant operators went ahead in earnest. Why? Because catering out of restaurants is simply smart business!

As franchisors, we intuitively understand these dynamics, because often we are the ones that are helping with the financing of our franchisees. What a domino effect our community experiences when our franchisees fail. Like I said earlier, there is no more important animal to the restaurant industry than franchisees. They have the incentive to work hard for consumers especially when they are heavily invested.

I propose that, as franchisors, it’s probable that we made HUGE oversights when it comes to catering out of our restaurants. We don’t understand the complexity of this channel well enough, and we treated it as if it didn’t really matter. Catering was always just an “add-on business” and although we always knew these sales were incremental, we just did not understand the

long-term impact of catering on our operations.

As franchisors, we’ve been playing catch up when it comes to catering. It’s time to focus on catering operations!

As consumer markets continue to shift, we as franchisors, brand police and the gatekeepers of standards, must consider leveraging our system scale to grow catering sales. Playing catch up is not only difficult, but unless we provide some compelling reasons for our franchisees to play with “our” catering ball, they will not let us join the game. I see it every day. Franchisees are worried about their catering business and they hold it close.

As franchisors, we must continue to deliver real results to our franchisees when it comes to providing them with our services. 

The same is true with catering. We have to rethink our services here, so that we can leverage our collective scale. We must further use that leverage in the best interest of our franchisees. If we do it half fast, our franchisees will not understand why they need us at all to build the catering sales channel. They will just continue to do it on their own, which may not be in the best interest of our brand. Building “catering silos” will not serve us well in the long run.

Until we invest in proper infrastructure, franchisees will intuitively feel our inexperience when it comes to catering. 

Remember, taking control of our brand experience for catering requires far more effort than just some designing slick packaging or creative advertising. It requires a commitment to “in-house” expertise in catering execution and active selling. We must have catering leadership that is focused on making more money for franchisees, every single day.

If we really want to win our franchisees hearts when it comes to catering, hire the right business leader. Because catering is so connected to the business strategy for our brands, consider a Chief Catering Officer, or a Director of Catering to show your franchisees that you are serious about this business channel.

It’s about providing our franchisees with services around leadership, active selling, answering telephones, following up on orders, collecting accounts receivables and canvassing communities through telemarketing. It’s about really understanding the impact on operations and using our scale to drive efficiency and sales for our franchisees.

It’s about getting very strategic at the highest level of the brand. It’s about media, local store marketing and driving sales for the franchisees, each and every day. It’s about creating a new machine. A new paradigm, and a better business model.

The way forward is to use our scale to create areas of catering specialization throughout all parts of our ecosystems. Catering specialists that can handle sensitive consumer inquiries in a way that is in the best interest of the brand, which is in the best interest of our most important stakeholders. Consumers.

There are only three basic customer service touch points when it comes to catering, unless there is something that goes wrong, then there are more.

• Order entry
• Order distribution
• Payment. 

Those are the basic elements.

During the lifecycle of a catering transaction,there are subtle and complex dynamics that have to be managed. So complex in fact,that we’d be doing our franchisees a big favor to simply remove this complexity in their operations so that they can focus on scaling their manufacturing and distribution efforts.This will result in more capacity for everyone and sales will increase throughout our ecosystems.

Franchisees do not have the necessary resources to manage the administrative tasks associated with catering such as preparing proposals, estimates, invoices, accounts receivable and collections, follow-up, telesales, and professional order entry.

As franchisors, if we really want to succeed in this channel, we will have to remove the complexity for our franchisees. They are already taxed with just simply making payroll, opening their doors every day, hiring, training, financing, and just operating their stores.

I now understand that if franchisors take the time to invest in a franchisee’s catering venture, that in fact, not only do sales increase, but also pressure is eliminated from the restaurant and the whole venture becomes more efficient. 

Centralization drives costs down, and increases sales when it comes to catering. When that happens, franchisees have healthier economics, and everyone in the service chain wins.

In catering, there are additional points of control that need to be the responsibility of the franchisor. 

There are six key functional areas to focus on. Much of it can be outsourced to third party service providers in the long run. However, these six key principles must be driven to a single control point to ensure that the brand is properly represented in the marketplace and that consumers and franchisees are well served in the catering channel.

• Selling to national accounts
• Marketing using BIG media
• Catering activation packages for restaurants
• Training and restaurant certification
• Call-centre services for order entry, telesales, customer relations, invoicing and collections
• Software and IT

For catering to grow, franchisees must focus energy in their communities

If the catering business strategy is executed with precision and the franchisor provides a scalable and predictable service experience with centralized services, then resources will be freed up at the restaurant level.

Once resources are freed up at the restaurant level, franchisees can focus on driving local catering sales in their markets through flawless order execution of the catering experience out the back door of their restaurants. With the right strategy, franchisees can focus on:

• Supporting the BIG media advertising campaign with local restaurant marketing
• Ensuring that catering brand standards are met in their restaurants
• Ensuring that catering certification is in place in their restaurants
• Order execution in each restaurant (manufacturing, quality, accuracy and delivery)
• Maintaining a world class delivery program
• Supporting the catering lead person at the restaurant
• Driving consumers into the corporate sales funnel

If franchisors do a GREAT job at centralized services, franchisees will have more time on their hands to simply serve their communities and get orders out the door instead of being bogged down with the cumbersome administrative processes often associated with catering transactions.

As franchisee restaurants sales will increase, operations will run more efficiently and franchisees will make more money. As franchisors, we will be happier because we will have more control and a catering program that is systematic, uniform and predictable.

These results will yield happier franchisees, generate more royalties and will make our franchising packages far more attractive to new franchisees coming into the system.

More importantly, consumers will have a better experience and they will come back more often and spend more money with us.

Why centralized services is the RIGHT business strategy when it comes to catering out of our restaurants

Catering is complex. We need control, precision and scalability. Our consumers are savvy. Franchisees are already overwhelmed. Centralized services for catering creates efficiency in our ecosystems by creating control points and proper inflection during the service process.

How else can we create symbiotic silos of responsibility where we can create experts and catering specialists? Volume through centralization will drive specialization. When it comes to successful catering, specialization is key.

Once we have this infrastructure, then we can really turn on the catering jets and push our energy into a system of sound business logic where we can mitigate our service risk and rest comfortably that we have taken a complex set of business challenges and brought them to the most common denominator for guaranteed service execution.

We will really be in a position to grow sales as franchisors and franchisees if we can execute on something so fantastic.

Standardization is critical

As a community, we understand standardization better than any other industry. As a matter off fact, our indus- try is made up of 13 million workers, more than $650 Billion in sales in the US and, as a community, we have almost one million restaurant locations. We have spent decades systemizing and standardizing.

To create more wealth in our community, we must drive more sales. The only way to drive more sales is to serve new and changing markets. Catering will grow as the demand for convenience continues to grow. It’s a natural progression for our industry and the only way we can grow new sales on top of existing assets is to find new standards and methods.

We need to make room for these sales and the only way to do that is to invest in smarter infrastructure. Like any business, long-term growth takes investment and commitment.

Dare to do it differently; catering is a different business

My hope is that before you turn on the catering jets throughout your entire franchise system, you will take a moment to reflect on these words and consider the long-term impact of rolling out a complex program in a decentralized service model.

I also hope that you will challenge the ideas and strategies put forward in this essay. It’s an important debate for all of us. I am certain of that.