National Post (National Edition)
Proof of concept may win over franchisees
Black Rabbit testing ground for Java Joe’s
Sometimes franchising a concept makes sense. Other times, having an independent operation on the side can bring some good synergies to the franchise mix.
A perfect case in point is Toronto’s Black Rabbit Café. Opened to the public in late January of this year, customers have been lining up to get a sampling of the organic foods at this neighbourhood café. And while it’s an independent operation run by two brothers, there’s a long-standing franchising story behind it.
Black Rabbit is the brainchild of Alex and Peter Kiriakopoulos, who just happen to be an integral part of the Java Joe’s franchise family. Their parents Costa and Margaret have spent decades in the franchise world, starting with a highly successful donut chain that was eventually acquired by Country Style before starting up the Java Joe’s franchise.
“I literally grew up in the franchise world,” says Alex Kiriakopoulos. In addition to this latest venture, both brothers continue to play an active role in the Java Joe’s operations, which includes nine franchisees and one corporate store.
While Java Joe’s may be a smaller franchise in relative terms, the challenge of sustaining a brand and adapting to change are pretty much universal. “When you get into a franchise you are buying into a proven business model that you need to follow,” Mr. Kiriakopoulos explains. “At the same time, there is always potential to grow the brand.”
That means figuring out how to incorporate change without ruffling feathers along the way. And for the Kiriakopoulos brothers, that’s where Black Rabbit can play a part.
The café was opened to satisfy the brothers’ personal interest in developing a concept that focused on fresh, local, organic offerings. Given the high traffic it has drawn since Day 1, you would think the temptation to franchise would be strong. Mr. Kiriakopoulos is adamant however that Black Rabbit is never going to be “a franchise thing.”
What they are open to is using the concept to help evolve the Java Joe’s franchise. Black Rabbit is becoming a proving ground for ideas that could eventually be funneled back into the franchise.
“The main reason we did this was to pursue our own interests,” Mr. Kiriakopoulos stresses. “But an offshoot of that was the idea of building something under a completely different name and then inviting our franchisees to come over and take a look to see if they’re interested in taking advantage of some of the new ideas.”
It’s easier to make changes when you have something to show them that’s up and running and proven, he adds. “There’s no reason why we can’t start taking concepts that work at Black Rabbit and slowly implement them into Java Joe’s if they’re the right fit.”
The idea of incorporating change on a gradual basis is a
It’s up to the franchisor to lead them through
persuasion
smart way to manage a franchise brand, says Luke Sklar, partner at Sklar Wilton brand consultants in Toronto. The same entrepreneurial spirit that makes a successful franchisee can also mean resistance to change. “Franchisees like to do their own thing. So it’s up to the franchisor to lead them through persuasion. That means defining a clear vision and innovating accordingly to bring new energy when it’s needed.”
An ideal way to build trust is to offer up a proof of concept, Mr. Sklar notes. “If you can make a new concept work, franchisees will learn from that. New can be powerful.”
Change is not always an easy thing to incorporate into an established franchise, confirms Gareth Parry, president and chief executive of CanFranGlobal Consultants Inc. in Toronto. “There are a lot of consequences of defaulting with a brand agreement. There’s also downside risk when changing a name, a brand or anything else within a franchise. Sometimes it makes sense to do it in stages.”
For established franchises, there’s always pressure from franchisees that don’t want to change, he says. “The benefits have to be there for them before they will sign on the dotted line. Sometimes a lot of buy-in is needed.”
That’s why it’s critical to sit down and consult with franchisees when contemplating change within the ranks. “Otherwise you could be risking a lot. All it takes is one rogue franchisee to put a nail in the whole works.”
That being said, change is paramount in any system, Mr. Parry notes. “Things change all the time. Those that haven’t are stagnant or declining. If you don’t go with the flow and change your style, you can easily get left behind. For smaller brands especially, you need to change to stay ahead of the curve, maintain your market share and keep your franchisees happy. Because if you don’t, someone else will step in.”
“It’s just part of the franchise business,” Mr. Sklar says. “If you can get ahead of it by engaging in a thoughtful planning cycle and testing new concepts, it proves you’re not doing something new on a whim. There’s more to change than just having a good idea.”