In an exclusive interview with Franchise India, Chetan Arora talks about the modern day franchise model, multi-unit and single-unit franchising, safety audits and inceptions.
How is the modern day franchise owner’s model changing?
The business is getting lot more organised and franchisees are looking to expand their model and they themselves are becoming professional organisations which are more organised. They are hiring Area managers, HR porfessionals etc. In the past five years it was an individual franchisee running 3-4 outlets himself but today franchisee’s are much more organised. They are looking at running their business as professional organisation though within the terms of franchisor.
How can one create an atmosphere of positive Franchise relationships and avoid the pitfalls of being always adversarial?
It is very important to engage the franchise, make them understand what the brand philosophy is and what your expectations are from the franchisee and his franchisor. This will help reduce the adversarial issues at a later date, if any. The franchise needs to understand that when the franchisor is requesting certain things to be done in a certain manner, it is for the interest of the brand and the franchisee. This mindset, once understood by the franchisee, makes his ability to expand with the brand a possibility.
Please tell something about the expansion plan of Subway in India?
At the moment we have 390 stores in India. We have aggressive plan to grow and by the next year we target to cross 500 stores. We see ourselves having over 2000 stores in the next 8-10 years.
It was in the news that the recent expansion would focus on the Veggie market. Please tell us more about it.
We are not focusing on veggie market but in all our stores we have separate vegetarian prep counter and non-vegetarian prep counter. We have a separate vegetarian menu because in India we have a high veg eating population. We have certain locations where we have pure veg stores. For example, we have one in the Amity University, Delhi because the entire campus is veg. We have a pure veg outlet coming up right next to the Golden Temple in Amritsar. We would look at the sensitivities of the area, our partners and then take a informed decision on whether we need to open a pure veg Subway in a particular location.
How do you find the balance between the slower you move the faster you die concept?
I think it really depends on the Franchise in terms of a multi-unit owner. You don’t want to let somebody, who is not organised, grow fast. You need to have franchisees who are planning for their growth and work with them to expand. It is a judgement call that you take with the franchisee to find out whether he is ready for growth, whether he understands his role and what he needs to do to grow in terms of HR, organisational structure and inventory management, etc.
How can one avoid the speed traps?
The only way to avoid the speed traps is to be prepared to plan and grow. And if you are growing too fast, say you have 3-4 stores and you want to open 10 more but you don’t have the right people and right systems on board. So it is very important to be planned for the next 12-24 months for that growth and move on.
Why are food safety audits and inception non-negotiable in multi-unit franchising?
Firstly it is non-negotiable in any unit. It is non-negotiable because whether it is a multi unit owner or a single unit owner, every store should be audited for food safety and hygiene. This also ensures that the customer gets the best experience.
Please tell us about your role as Master Franchisee at Subway?
Currently we have 133 stores in the area where I am the master Franchisor. My role is multi-dimensional. I identify franchisee and which franchisee we want to work with. We negotiate with the landlords, identify the sites and identify the vendors for subway, for the marketing for brand within the territory and the country. Thus a multi-dimensional role.
What advice would you like to give to aspiring restaurateurs?
I think if you are buying into a franchise restaurant concept, the owner or the restaurateur must understand that it is a system which has been worked on and perfected over the years and you need to work within that system. Many entrepreneurs want to become restaurant owners, but it has to be understood that one has to be very dedicated, involved all the time and innovate within the parameters of the brand. The restauranteur must also remember that the franchise concept will bring the systems, but he/she still needs to work hard to ensure systems are followed. He/she needs to work hard to ensure that the brand is well marketed and represented; this will bring success.
What is the reason for drop in sales in Indian Restaurants?
In the last quarter the business was slow for the food industry. I think the food industry gets impacted when the economy is slow, like most other sectors. Discretionary spending is lower, leisure time. Spends on shopping have droppped which has impacted the food industry. However, I see this as a temporary situation and growth should be healthy going forward.