Ireland is easy fit for franchisors
The brightly lit streets of Dublin are picturesque at night, but the true beauty of Ireland can be seen in the reported 40 shades of green found in the countryside. The frequent rain also creates a proliferation of rainbows, where sometimes more than one appears in the sky at a time.
If you found establishing your brand in the United Kingdom was a nonevent, that same experience just may be waiting for you in the Republic of Ireland.
“Ireland was an easy fit for us,” said Don Fertman, chief development officer for Subway sandwiches. “We call it (the territory) TUKI,” which stands for Team United Kingdom Ireland.
Subway has a long track record in the U.K. It first ventured into the U.K. in 1985. The Milford, Connecticut-based mega-brand has 2,200 restaurants in the U.K. and 150 in the Republic of Ireland, Fertman said. The U.K. market was Subway’s fastest-growing, second only to Brazil, with the U.K. team adding 255 stores, while Brazil added 266. Growth has been fast in Ireland as well, but since its territory covers a much smaller population, 4.89 million people, developers added 10 stores in Ireland in 2015.
The Republic of Ireland and Northern Ireland both inhabit the same island, but Northern Ireland is considered part of the U.K., while Ireland is not. While there are many similarities in the markets, there are significant differences as well. For one thing, Ireland is proud of being separate from the U.K. A prudent franchisor may not want to brag about its U.K. franchisees to its Ireland ones, and vice versa.
More iconic Ireland scenes
All of the same laws that apply to businesses in the European Union apply in Ireland as well. Fertman said that while there’s no franchise law per se, Subway uses a version of the U.S. FDD in Ireland and encourages restaurant owners to have a lawyer review the documents. “It protects both sides,” he said.
Subway uses the same development system internationally as it does domestically to grow, where the master is responsible for training, etc. of the franchisees. When Subway first went into the U.K., Fertman said, it was viewed by the government as a pyramid scheme. “We had to go to court and put on the wigs and argue (our case),” he said. And needless to say, but important to document, they were victorious.
Worldwide, 70 to 75 percent of new Subway units are sold to existing owners, Fertman said, adding that the only regions that doesn’t hold true are in emerging markets. In the U.S., that number is closer to 80 percent.
Fertman’s advice to franchisors investigating Ireland is to not assume they have to adapt to the local customs. “Don’t overstudy and decide you have to change your offering right away. Go in with your original concept,” he said. “Chances are that’s the experience they want.”
That was the case in Ireland. The best-selling sandwich in the U.S. is also the best seller there—the B.M.T. (Bigger. Meatier. Tastier.), with ample quantities of salami, pepperoni and ham.
Ireland’s notable pub culture is actually beneficial to Subway, Fertman said, because pub-goers will stop at a Subway on their way home for something more to eat. To accommodate this trend, some Subways are open 24 hours.
The people you’ll meet
The Irish are fun-loving people, but they are also very competitive. A personality trait that may be a red flag to franchisors seeking aggressive franchisees is that the Irish don’t always equate wealth with personal success or happiness, and aren’t impressed by authority, according to the business etiquette book, Kiss, Bow or Shake Hands. What they do value is an individual’s right to make his or her own decisions, which falls into line with franchising’s ideal of being in business for yourself.
Over the last 50 years, Ireland’s high birthrate has made it demographically one of the youngest populations in the European Union. That’s good in terms of finding workers for your franchise.
That younger population hasn’t been a deterrent to Home Instead Senior Care. The master franchisee for the Omaha, Nebraska-based franchise has been the recipient of the Irish Franchise Association’s Service Franchise of the Year award three times in its 10-year residency in Ireland.
Home Instead has competition from both the U.S. and locally, but it’s the largest provider of homecare services in Ireland, according to Tony O’Donovan, COO with Home Instead’s Ireland partner. The franchisee has 19 offices open and annual revenue the equivalent of $45 million. The master originally had the entire island as its territory, he said, but healthcare in the U.K. (Northern Ireland) is regulated differently so the Northern territory is now under the U.K. master, he said.
The team behind the Ireland Home Instead has a long track record with franchising in this market. It brought Snap, a printing company out of Australia, to Ireland, in 1984.
“The time was right and the business owners were in the zone,” O’Donovan continued. What brought their attention to senior care, he added, is that both founders’ aging parents needed in-home care and they saw the opportunity in providing the services they needed for their parents to a broader audience.
Casual-dining chains may want to note that Irish pubs have evolved into gastropubs, where as much emphasis is placed on the quality of the food as the beer. Ireland’s Guinness is the largest brewer of stout in the world, and according to one of our sources, “Guinness beer in the south (Ireland) is like nothing you’ve tasted. It’s so smooth.”
Other reasons to look at Ireland
In 1957 corporate taxes on foreign multinationals investing in Ireland were almost eradicated. Low corporate taxes, free trade with the U.K., relatively low wages and English as an official language makes Ireland attractive to corporations. Among the most notable corporations that have moved their headquarters to Ireland to take advantage of its more favorable corporate tax rates are Apple, Google, Amazon and eBay.
Road warriors will like how easy it is to leave Ireland. The United States Customs and Border Protection (USCBP) facility at Terminal 2 in the Dublin Airport was designed to allow U.S.-bound passengers to undertake all immigration, customs and agriculture inspections in Dublin prior to departure.
Once they’ve cleared USCBP, passengers arriving at U.S. airports are treated as if they are passengers on domestic flights. This saves time standing in custom lines, plus baggage has been checked through to your final destination directly from Dublin, according to the U.S. Commerce Department’s website.
Ireland has an active franchise association that is a “self-regulating body” that subscribes to the European Code of Ethics on franchising, according to its website. When it completed its latest survey in 2010, there were more than 4,000 operating franchise units, about half of which are in the service industry. The U.K. overtook the U.S. for the most franchise brands in Ireland, accounting for about one-third of the market.
We couldn’t close without one cautionary tale: Be sure to get your trademarks and trade dress registered long before you decide to go into Ireland. A case in point is a Johnny Rockets lookalike, Eddie Rocket’s, a ‘50s style American hamburger diner with a big presence on the Irish Franchise Association’s website. It won the Best Indigenous Irish Franchise from the Irish association in 2015.