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Breaking Out of Your Comfort Zone: Successfully Supporting New Stores in New Markets
May 2007 Franchising World
A solid strategy, familiarity with new markets and a strong support team sets a brand up for success. A common phrase in the workplace environment, “comfort zone” refers to an employee’s favored tasks, usually ones they have mastered with ease time and again. It makes sense, therefore, to find highly-organized, more introverted individuals with strong mathematical skills in the accounting department, while creative, outgoing types are usually found in marketing or communications. Knowing that employees tend to gravitate toward projects that come naturally, smart companies will typically assign staff members to positions that enable them to utilize their natural talents, yet also challenge them to move beyond their comfort zones and broaden their horizons. In the franchising community, franchise systems, too, have comfort zones. When it comes to growth and expansion strategy, the logical “comfort zones” for a franchise company will be in areas near the corporate office, regions where the concept was originally founded, where several locations exist, and where brand recognition is sky high. For obvious reasons, confidence levels for new store success in these areas are high.
Everybody knows… But what about areas outside of the comfort zone? What happens when a prospect calls from clear across the country and wants to introduce the concept in a new market where a franchise company has never had a location? Or, in this company’s case, what happens when the management team makes a strategic decision to break out of its regional base and cross new boundaries for expansion of the brand? That’s usually when a company’s franchisee support team breaks out in cold sweats and the questions start pouring in: How soon should a marketing buzz be created? How will the community respond to the brand? Does the company stand a chance of success in that market? One of the greatest challenges franchise companies face is how to successfully open new locations in new markets, especially where brand recognition is low or even non-existent. Three years ago, the team collectively decided to launch an aggressive national expansion plan to add 130 plus franchise-operated locations in the Southwest, Midwest and Eastern United States by 2009. This initiative called for the development of restaurants both within and outside our core markets in the West, including the concept’s first major expansion east of the Mississippi River. After thriving on the West Coast for more than 20 years, it made logical sense to target markets outside of the traditional territories whose demographics match the areas where the concept enjoyed strong consumer followings. The idea sounded great in theory, but everyone knew a monumental task was ahead and didn’t take it lightly. It is an exciting time in the history of the brand and it’s in the midst of opening restaurants in new markets across the nation. Since embarking on this new strategy, several stores have been successfully launched in such markets as Chicago where the brand had never existed previously. Based on this experience, here are some factors and specific steps that franchise organizations should take into consideration when embarking on expansion outside of their comfort zones: • Know what you’re in for and have a plan • Make franchisee support the number one priority
• Form a dedicated support team
• Customized approach
For any franchise system considering national expansion into new markets, creating a team is a critical investment. The objectives should be to establish and nurture a strong working partnership with new franchisees, expose them to the brand’s culture and address their needs and challenges, beginning early with the franchise sales process and continuing through the time when they are well established with multiple new establishments open in their new markets. Armed with a solid strategy, familiarity with the new markets and a strong support team dedicated to new stores in new markets, the franchised brand will set itself and franchisees up for success around the country. The whole country will know the brand’s name and be glad it came every time it opens a new location. Stephen Carley is CEO of El Pollo Loco. He can be reached at scarley@elpolloloco.com.
By Steve Carley
El Pollo Loco has 259 locations in the Los Angeles DMA and another 102 throughout Arizona, California, Nevada and Texas, and recently added restaurants in Colorado, Connecticut and Illinois. Like the words from the theme song of the 80s sitcom Cheers, in California and throughout the West Coast, “Everybody knows our name.” Without sounding too presumptuous, when a new store opens, the second verse follows: “They’re always glad we came.” A new restaurant opens there, and loyal customers are lining up before the front doors are even unlocked.
Treat national expansion into new markets like any other major project or investment. Have a plan. Know exactly where the company should go and when. Most importantly, choose markets carefully. Chicago was selected as the first new market for development because of its demographic likeness to markets in the West where the franchise system enjoys great success. Before opening there, the company scouted the area carefully, conducted market research and focus groups, and even hosted a booth at a major city event to expose consumers to the food and brand a year before entered the market.
From the day a franchisee begins working with a franchise organization to open in a new market, the company needs to be there to support her needs and growth. As a franchise system, it already knows that it can only be successful if franchisees are successful, and vice versa. Be there to provide support in areas ranging from operations to training, marketing and development.
Don’t just talk about support, devote the necessary human and financial resources at the home office to create a team whose mission is solely devoted to supporting new franchisees in new markets. The team should include industry professionals skilled in various areas and be equipped to offer professional guidance in every aspect of the business. It should consist of a cross-functional group of restaurant professionals from various departments, including specialists in the areas of site selection, supply chain, construction, training, marketing, public relations and operations. Make the support team the key contact for all new franchisees, from the time a development agreement is signed through the opening of a franchisee’s new restaurant.
Encourage suggestions from franchisees and ensure that the broad skill levels of personnel on the team help tailor the program to each franchisee’s needs. All franchise companies know that each market is different. What works in one market might be a total bust in another. Chances are that franchisees know the market much better than corporate does, so it’s no wonder they will be turned off by generic, cookie-cutter marketing plans. Make sure the support team is open to tailoring the plan where necessary to help maximize the success of each market.
