“With the takeover this week of Brumby’s Bakery and Michels Patisserie by Retail Food Group, the question arises is the future of franchising huge franchisors operating many brands?” said Mr. Grant Garraway, senior consultant of
The Franchise Shop.
Retail Food Group (RFG) already operate the highly successful Donut King and Bb’s Café brands. “As the franchisor of these two very well established brands RFG clearly should bring economies of scale to the new combined business. Areas such as training, purchasing, media buying all leap to mind as potential areas for savings. RFG will now control over 1000 retail stores.” Mr. Garraway said.
The franchising sector already has other examples of
multi-branding such as Paradise Holdings operating four brands - Pets Paradise, Pet Goods Direct, Billy Baxters and Studio Entertainment stores. Allied Brands operate the Baskin Robins, Kenny’s Cardiology, and Cookie Man brands.
“The long term question is whether these mega-franchise groups are to become the norm, or simply one of the methods of franchising?” said Mr. Garraway. “Will these mega-groups become the Coles or Woolworths of franchising? Can they grow to utterly dominate franchising as the Coles and Woolworths groups dominate food, general merchandise, liquor and petrol retailing in Australia?” Mr. Garraway said.
16-Oct-2007