Erin go Bragh
Cooking up Irish franchises
Wanted: Business-minded franchisees with available capital for a small but growing chain of fish and chips takeaway restaurants based in Northern Ireland. No restaurant experience needed. Will train.
Michael Neill spent 14 years as an engineer on floating oil rigs across the world before putting down anchor in 2002 to begin The Frying Squad, which now numbers two company-owned stores in Bangor, County Down, and two franchise locations in County Antrim, one in Larne and one in Carrickfergus.
The Streat, started in Belfast in 1999, has 30 units in Northern Ireland and the Republic of Ireland.
By 2010, Neill foresees a total of 10 outlets before he takes the concept to the Republic of Ireland and the rest of the United Kingdom a short time later. Residents of the United Kingdom, which includes England, Scotland, Wales and Northern Ireland, eat more than 434 million fish-and-chip meals each year. One in six households eat at a "chippy" once a week, with just under half enjoying fish and chips at least once a month.
Fish and chips characterizes the quick-serve culinary preference of much of Western Europe in the way the hamburger defines American tastes. The U.K. boasts more than 11,000 fish-and-chip shops, but a vast majority are single-store operations, and the quality can vary widely. Neill believes he's developed a concept, a brand image and an operations system that will fit the market.
"Our mission is to be the customer's first choice for fish and chips," Neill says. "Operators don't need restaurant experience to run a Frying Squad."
Neill started with a 56-seat, 2,000-square-foot store in Newtownards, County Down in February 2003 that he ran for two-plus years. While the concept of offering fish, chicken, sausage, steak, chips and a variety of other foods met with wide appeal, Neill discovered he could be nearly as profitable in a 750- to 900-square-foot facility with much fewer seats.
This is one of four units of The Frying Squad in Northern Ireland. The owner is planning 10 before taking it to Ireland.
The franchise industry in the United Kingdom outpaced the general economy by nearly a factor of four last year, according to the 2008 NatWest/BFA Franchise Survey, which monitors the performance, attitudes and opinions of the franchise sector. While the U.K. economy grew by 3.1 percent, the franchise industry grew at a 15 percent clip.
According to the survey, the number of active franchises is 809, a 3 percent bump over the previous year. More than three-quarters (77 percent) operate an independent system, with 12 percent as a subsidiary of a parent company and 11 percent on a master licensee basis. A record 383,000 people are directly employed in the franchising sector, and the average franchise system has been operating for 11 years.
But Neill isn't alone in his search for a few good franchisees, according to the survey. Two-thirds of respondents indicated that lack of suitable franchisees continues to be the main barrier to growth.
The franchising outlook in the United Kingdom and Republic of Ireland continues to be bright, adds Stuart Anderson, editor of Irish Franchise Magazine. "A number of local brands are doing very well, and there are international success stories as well," Anderson says.
Michael Neill (shown here with an employee) worked on oil rigs before he settled down and started The Frying Squad in 2002.
Magazine research indicates that the franchise market in both halves of Ireland generates $3 billion in sales among 270 franchise concepts, employing more than 25,000.
O'Briens Sandwich Bars opened in 1988 in Dublin and now has outlets in 18 countries, including China, Australia, Saudi Arabia and South Africa. Munster Tool Co. was founded in Mallow, County Cork, and has operations in 32 countries.
Cleaning Doctor, like The Frying Squad, traces its roots to Northern Ireland. From its base in Enniskillen, County Fermanagh, the franchise company has operations throughout the UK.
American franchise brands are considered among the best a franchisee can have, Anderson says, because any concept that finds traction in the U.S. market must have its operating system in good order. However, concepts born in Northern Ireland and the Republic also are making inroads and are considered with favorable eyes, he adds.
"How Ireland might be affected by global economic challenges is difficult to forecast, but I think the franchise industry will hold up well," Anderson says. "As the unemployment rate goes up, a lot of self-employed people, such as builders, will be looking for something new that provides job security and can build up their assets."
Nikki and Michael McQuillan decided to franchise The Streat after some early success.
Another choice for U.K. franchisees is The Streat, a cafe concept that opened its first outlet in Belfast in 1999. The chain, based just outside Belfast in Holywood, County Down, currently has 30 locations in Northern Ireland and the Republic. Several more eateries are under construction, and the chain opened a franchise office in Scotland in January.
Michael and Nikki McQuillan began the concept with the aim of delivering consistently great food and drink to a fast-changing Belfast society. Based on that early success, the McQuillans decided to franchise the concept. The Streat features breakfast offerings such as hot filled breakfast paninis, fresh bagels, cinnamon scones and an assortment of fresh fruit juices and other beverages. Moving toward the lunch hour, The Streat offers custom deli sandwiches, paninis, ciabattas, champ (Irish potatoes, butter and scallions), hotdogs and other hot food.
Franchise packages are available for $45,000, which does not include leasing costs, buildout (between $144,000-$240,000) and working capital. Ongoing fees include 6 percent of net for management support and 2 percent net for marketing.
A Frying Squad franchise package is $38,000 for a comprehensive training program, operations manual, launch program and corporate uniforms, plus a 6 percent net royalty fee. Neill says capital expenditures run another $272,000. That total is just slightly above the average U.K. franchise costs as calculated in the NatWest/BFA Franchise Survey.
But the survey reports a 91-percent profitability among franchisees in 2007, compared with 70 percent in 1991 and 88 percent in 2004. The failure rate (4.1 percent) is small but slightly higher than the figure reported in the 2006 survey.
When evaluating potential franchisees, Neill looks for a good rapport with others, management skills and available capital. "I'm looking for like-minded people who know how to grow a business," Neill says.
Restaurant experience may not be necessary, but a love of fish and chips is definitely a bonus.