Business and Operations
Should you start a franchise, or pivot your delivery model?
By Bakers Journal
Toben Kochman, Executive Chef and Owner of Toben Food by Design, said, “When we started, I was executive chef, prior to entering into the catering world, and we felt like there was a great opportunity to really dive into private events specifically at the time. As we continue to progress and build on our customer base, we just started listening and have to have a really good ear and eye for what is happening out you know in in the market. “We continue to put our brand note in different avenues, so having started off in the private sector of catering, we really saw that, first off, there was an opportunity in the corporate world so we’re looking at the market, which is very diverse.”
Starting a business during pandemic was difficult; the business did not rely on street food business. “We believe in putting money back into our business. We dove into food truck business, which led to a large production facility, which meant extra space.” The company, Toben Foods By Design, turned to catering.
Kochman said they managed to pivot but not without challenges. “We’ve always been very brand focused, that’s how we’ve grown to being one of the largest full service caterers in the country. Can we really get our products into people’s hands and into people’s laps on a consistent basis? We shifted to reaching out to all of our corporate clients and our private clientele basis through mass emailing, as well as big social media push and now we’ve grown into a full new branch.”
The silver lining to the pandemic is that now Toben Foods by Design has created a whole new branch of its operation. They took their business and almost reinvented it for the pandemic.
Kochman added, “We had a massive facility that was built in structure to cater to 1000s of people every week but we really took advantage of that. And we adapted our recipes and our culture. We got back to the drawing board and, had a big creative think tank, where everyone was willing to get their feet wet.”
Lyn Little, Partner, National Franchise Leader, BDO Canada LLP, said many new franchisees are unsure of what to expect. “If you’re not prepared for all the costs that you have coming at you, it can make things very, very difficult. So, it’s really important to plan those expenses out ahead of time. Another challenge I’d say is really growing at the right pace.
Little adds, “You want to have enough growth to maintain profitability, or get to profitability. But at the same time, you have to manage that to make sure that you’re not causing yourself to get into a situation where you are not able to handle the growth that you have.”
For those who may be great baker, but not necessarily a great accountant, can people start with one location in the franchise, or should they have five locations before even consider franchising?
Little explained, “what I usually hear is about is the “real three”: having three profitable franchise, or corporate location for three years. And if you’ve pulled that off, then, then you’ve pretty much proven that it’s a system that can be repeatable and that gets scaleable. That’s not necessary but it really is a good proving ground, that you can operate in different markets, and you can be successful in three different areas for a number of years.”
It’s difficult for franchisees to survive, and many need to know how to make decisions quickly. “I have actually seen quite a few restaurants that have turned over and it ended up being a very good situation where, where they are able to sell their real estate. And actually, even though they don’t want to get out. They get out profitably and so that at least is a silver lining to some of these long-term owners.”
How do you adapt or how do you reinvent yourself? Kochman said, “It helps if you have the right type of family or the right type of partners in general, who are mutually supportive. I think that is a big thing, getting on the same page on the same wavelength. As in, where you want to navigate and how you want to attack the different problems that come up is incredibly important.”
He continues, “I’m in a family-run scenario, myself, my sister and my brother in law. We’re playing different but complementary roles in our business. I think it would be different if we were all chefs, and we’d be butting heads as to the direction that we wanted to take our food program throughout this time. Instead, we come together and try and funnel our vested interest but find ways to complement each other in terms of the model and the direction we want to go.”
What does the future of franchisees look like? Little observed, “We’ll continue to see the focus on the speed and efficiency and contactless service, which was something that was starting before COVID. There was a lot of mobile ordering through the pickup locations, like, Pizza Pizza. Food lockers are becoming more and more common.” She stated, “I really think it’s a lot of the continuation and growth of the trends that were happening before, like being environmentally conscious, or offering speed and efficiency.”
Kochman said, “I think the way gifting and packaged foods have emerged are something that we’ll continue to see. We’ll really continue to see that grow, particularly at certain times a year and holidays.” He’s not sure the buffet-model of service will survive, but awareness of health and safety will not only continue but will be heightened, “as people become much more conscientious how they consume food, you know, health and safety is such a huge thing that has come out of this.”
How has social media been used to drive online purchases, and how much, if more, effort have you allocated into your content creation?” Kochman said, “We’ve put a huge emphasis on that. It’s an incredibly important part of it. It is somewhat difficult to track, but sponsored ads have been really huge for us.”
Tracking users and demographics are crucial to running Kochman’s business: “understanding there are all these ways to track, who it is that’s viewing and what demographic of people you’re going after. We run campaigns where we’ve done a lot of special events and evenings. We’ve we run a monthly sort of “special date night,” where we preview menus on via social media.” Toben emphasizes how important social media is for brand recognition, “So it was very important for social media to retell the story, and to have people come to know our new face and our new brand as it as it came about [during the pandemic] and was redeveloped. social media is just absolutely huge.”
In summary: Take advantage of what’s in front of you, move quickly, and know your numbers. And always, always use social media./