THE ITAL­IAN JOB

Ca­sual chain restau­rants are be­com­ing in­creas­ingly pop­u­lar in Aus­tralia, with Ital­ian eater­ies such as La Porchetta and Rozzi’s serv­ing up fresh flavours and a win­ning for­mula.

Inside Franchise Business - - Contents - By Do­mini Stu­art

Eater­ies are serv­ing up fresh flavours and a win­ning for­mula.

Ta­ble ser­vice in a ca­sual, fam­i­lyfriendly at­mos­phere po­si­tions chain restau­rants some­where be­tween tra­di­tional restau­rants and fast-food ser­vices. The con­cept has proved suc­cess­ful in Aus­tralia and, ac­cord­ing to the IBISWorld In­dus­try Re­port

re­leased in July this year, that suc­cess is likely to con­tinue. Rev­enue is ex­pected to grow at an an­nu­alised 1.3 per cent over the next five years to reach $389 mil­lion. “Ris­ing dis­cre­tionary in­come has been sup­port­ing growth,” says Lau­ren Mag­ner, client re­la­tion­ship man­ager at IBISWorld Aus­tralia and au­thor of the re­port. “Con­sumers are also more likely to dine at restau­rants when they visit en­ter­tain­ment and sport­ing events and they’ve been spend­ing more on these ac­tiv­i­ties.”

ITAL­IAN FOOD LEADS THE WAY

The menus at Ital­ian chain restau­rants are usu­ally built around pasta and pizza with other of­fer­ings such as sal­ads, desserts and cof­fee. Many, such as La Porchetta and Rozzi’s, are li­censed. And Ital­ian food is lead­ing the field, with 40.1 per cent of the sec­tor com­pared with steaks, burg­ers and gen­eral food at 34.5 per cent, Mex­i­can food at 12.2 per cent, Asian food at 9.3 per cent and break­fast food at 3.9 per cent.

La Porchetta was a pi­o­neer in the sec­tor when it opened its first restau­rant over 30 years ago. To­day it’s the mar­ket leader in mod­ern Ital­ian ca­sual din­ing fran­chises and La Porchetta CEO Sara

Pan­ta­leo, who joined the or­gan­i­sa­tion in 1996, has played a ma­jor role in driv­ing the brand’s growth. She be­lieves that con­sumers are in­creas­ingly look­ing for con­ve­nient and qual­ity meals to help them man­age their work and fam­ily com­mit­ments, and that ca­sual din­ing can pro­vide an ideal so­lu­tion.

“Peo­ple are turn­ing to trusted and fam­ily-friendly brands where they can eas­ily find nu­tri­tious, healthy meals in a wel­com­ing at­mos­phere,” she says. “There’s also grow­ing pub­lic aware­ness of the health risks as­so­ci­ated with poor diet and this has led to a greater de­mand for health­ier eat­ing op­tions. Brands that are meet­ing those de­mands will stay rel­e­vant.”

The Rozzi’s brand was born in 2011, fran­chis­ing be­gan a year later and there are cur­rently 14 restau­rants in the chain. Di­rec­tor Dean Salomone be­lieves the con­cept of “fresh, fresh and fresh” is the key to suc­cess in the sec­tor.

“One of the great things about good Ital­ian food is that it re­volves around fresh pro­duce,” he says. “These days you can’t get away with of­fer­ing bland cheese on stodgy lay­ers of pasta and tomato paste and say­ing you’ve pro­vided an Ital­ian ex­pe­ri­ence. As with most other food sec­tors, cus­tomers’ ex­pec­ta­tions have changed, and not just in terms of how food tastes. They want to know the in­gre­di­ents and where there food is be­ing made so, at Rozzi’s, we have worked hard to de­sign a model where each restau­rant pro­duces as much prod­uct on site daily as pos­si­ble, right down to bak­ing our own fo­cac­cia bread.”

IN­CREAS­ING COM­PE­TI­TION

De­spite its cur­rent pop­u­lar­ity, Mag­ner ex­pects to see a slow­ing down in in­dus­try de­mand with in­dus­try rev­enue fall­ing to an an­nu­alised 0.7 per cent over the five years through to 2022–23. Strength­en­ing com­pe­ti­tion is one of the big­gest chal­lenges.

“Chain restau­rants com­pete with each other on price, menu of­fer­ing, qual­ity, cus­tomer ser­vice, mar­ket­ing, size of op­er­a­tions and rep­u­ta­tion as well as style, am­bi­ence and qual­ity of ser­vice,” she says. “They’re also subject to ex­ter­nal com­pe­ti­tion from fast-food ser­vices, in­de­pen­dent restau­rants and cafes. And then there’s com­pe­ti­tion from con­sumers who de­cide to cook more meals at home, which is par­tic­u­larly com­mon dur­ing dif­fi­cult eco­nomic times.”

In­creas­ingly so­phis­ti­cated con­sumer pref­er­ences may also take a toll.

“A grow­ing food cul­ture in metropoli­tan ar­eas has re­sulted in con­sumers eat­ing more of­ten at spe­cialised in­de­pen­dent restau­rants that of­fer high qual­ity, pre­mium meals,” Mag­ner con­tin­ues. “Food­savvy din­ers are also more likely to look at menus and peer-re­view sites rather than rely on the rep­u­ta­tion of cer­tain chains. In­dus­try play­ers will need to dif­fer­en­ti­ate them­selves through their menus and to build strong rep­u­ta­tions.”

De­mo­graphic trends could also ex­ert an in­flu­ence.

“Chain restau­rants that op­er­ate in a good lo­ca­tion are bet­ter po­si­tioned to drive cus­tomer traf­fic,” Mag­ner says. “At the mo­ment, many chain restau­rants aim to ser­vice subur­ban pop­u­la­tions but chang­ing de­mo­graph­ics in Aus­tralia could po­ten­tially have an im­pact on that strat­egy. Young time-poor peo­ple are ex­pected to in­creas­ingly opt for in­ner-city liv­ing so, while chain restau­rants are likely to es­tab­lish new op­er­a­tions in in­ner-city sub­urbs to counter this, they would face strong com­pe­ti­tion from fast-food ser­vices and tra­di­tional restau­rants.”

MANAG­ING THE COSTS

Pan­ta­leo cites the in­creas­ing costs of shop fitouts, rents and util­i­ties as an­other se­ri­ous chal­lenge for full-ser­vice restau­rants in Aus­tralia.

“That means we need to be­come even clev­erer in the way we op­er­ate across the busi­ness to find ef­fi­cien­cies else­where, such as with im­proved op­er­a­tional pro­ce­dures and staff train­ing,” she says. “We’re also cur­rently work­ing with our fran­chisees to up­grade waste man­age­ment pro­cesses and mon­i­tor­ing, and we work with them con­stantly to re­view op­er­a­tional ex­penses.”

Rozzis’ lead­er­ship team is also com­mit­ted to search­ing out ef­fi­cien­cies in op­er­a­tions, prod­ucts and how they de­sign and build their stores.

“Store de­signs are be­com­ing in­creas­ingly in­tri­cate and com­plex to meet the de­mands of both con­sumers and land­lords,” says Salomone. “We be­lieve in cre­at­ing in­ter­est­ing and unique places for our guests to en­joy our Ital­ian-in­spired food and, early on, we saw an op­por­tu­nity to keep build costs down for our­selves and fran­chise part­ners by di­rectly im­port­ing our stone, tim­ber floor­ing, fur­ni­ture and tiles.”

More re­cently, Rozzi’s iden­ti­fied an op­por­tu­nity to stream­line its on­board­ing and ros­ter­ing pro­ce­dures.

“We did our re­search and de­cided to im­ple­ment the Ento sys­tem, which al­lows staff to view their weekly ros­ters on­line and log on and off their shifts,” Salomone says. “It en­sures we’re com­pli­ant with all of the doc­u­men­ta­tion re­quired for staff in­duc­tion and we have also seen a re­duc­tion in both em­ployee queries and time spent on pay­roll pro­cess­ing.”

GAIN­ING CUS­TOMER LOY­ALTY

Pan­ta­leo be­lieves that, if branded net­works are to con­tinue win­ning brand trust and loy­alty, they need to un­der­stand and de­liver what cus­tomers want.

“We work hard to en­sure we stay ahead of the game,” she says. “As a brand, we’ve fo­cused on in­no­va­tion and de­vel­op­ment to en­sure we re­tain our ex­ist­ing cus­tomers and at­tract new ones. We reg­u­larly up­date our menu to main­tain their in­ter­est and also to ac­com­mo­date chang­ing tastes – for ex­am­ple, by in­tro­duc­ing ve­gan op­tions. Cus­tomers also turn to us when they’re cel­e­brat­ing spe­cial events and we need to be able to cater to their re­quire­ments.”

La Porchetta’s re­cent in­no­va­tions in­clude an app that makes it easy for

Food-savvy din­ers are also more likely to look at menus and peer­re­view sites rather than rely on the rep­u­ta­tion of cer­tain chains. In­dus­try play­ers will need to dif­fer­en­ti­ate them­selves through their menus and to build strong rep­u­ta­tions.

cus­tomers to find their near­est restau­rant and the in­tro­duc­tion of home de­liv­ery.

“We know we need to pro­vide a full-ser­vice menu range with qual­ity meals made fresh to or­der and then of­fer those meals in the cus­tomer’s pre­ferred way, whether that’s dine in, take­away or de­liv­ery,” Pan­ta­leo says. “Brand mar­ket­ing is an­other es­sen­tial be­cause we can’t af­ford to take brand recog­ni­tion for granted. We need to de­liver our brand mes­sage to our tar­get cus­tomers at the right time to en­sure they will con­tinue to give us their sup­port.”

Salomone is con­fi­dent that qual­ity will al­ways cre­ate a com­pet­i­tive edge.

“Pro­vide a great prod­uct and cus­tomers will keep com­ing back whether you’re part of a net­work or an in­de­pen­dent con­cern,” he says. “And, of course, cost is an­other im­por­tant is­sue. A lot of our pizza and pasta meals are priced at un­der $20 which makes us more af­ford­able than many trat­to­rias.”

Store de­signs are be­com­ing in­creas­ingly in­tri­cate and com­plex to meet the de­mands of both con­sumers and land­lords

He also be­lieves that branded net­works tend to have the edge when it comes to de­sign.

“I think we pay more at­ten­tion to stay­ing cur­rent in terms of and the din­ing ex­pe­ri­ence we pro­vide,” he says. “At Rozzi’s we’re also very con­scious of our brand­ing. For in­stance, fol­low­ing a re­vamp across our net­work, all new stores are open­ing as Rozzi’s Fresh Kitchen rather than Rozzi’s Ital­ian Can­teen.”

THE RIGHT FRAN­CHISEE

For Pan­ta­leo, a pas­sion for the food and hospi­tal­ity in­dus­try is an es­sen­tial start­ing point for any would-be fran­chisee.

“Then we look for en­tre­pre­neur­ial drive, good peo­ple man­age­ment skills, a demon­strated work ethic and a de­sire to suc­ceed,” she says. “Fi­nan­cial sta­bil­ity and ca­pa­bil­ity are also im­por­tant.”

In re­turn, the La Porchetta mar­ket­ing team main­tains re­spon­si­bil­ity for all big brand mar­ket­ing ac­tiv­i­ties across mul­ti­ple plat­forms in­clud­ing on­line, tele­vi­sion and ra­dio.

“We also pro­vide our fran­chisees with an in­te­grated, on­line lo­cal area mar­ket­ing plat­form to or­der and de­liver ap­proved mar­ket­ing col­lat­eral, which sup­ports busi­ness de­vel­op­ment,” says Pan­ta­leo.

Fran­chisees also re­ceive com­pre­hen­sive train­ing.

“A six-week ses­sion cov­ers every as­pect of own­ing a La Porchetta fran­chise,” says Pan­ta­leo. “This cov­ers prac­ti­cal on-site train­ing, in­clud­ing pur­chas­ing, re­cruit­ment, prod­ucts, sup­pli­ers, cus­tomer ser­vice, fi­nan­cial re­port­ing and mar­ket­ing tips to give you all the in­for­ma­tion and skills re­quired to run a La Porchetta restau­rant suc­cess­fully.”

Rozzi’s also pro­vides six weeks of ini­tial train­ing with on­go­ing mar­ket­ing, op­er­a­tional sup­port and strong sup­plier ar­range­ments.

“Rozzi’s is a col­lab­o­ra­tion of sea­soned food and busi­ness op­er­a­tors who have com­bined their in­dus­try ex­pe­ri­ence to cre­ate this fast ca­sual din­ing of­fer,” says Salomone. “Our busi­ness model is sim­ple, re­li­able and proven if you are pre­pared for some hard work and com­mit­ment along the way.”

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