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 There is a place for entrepreneurial franchisees

 

 The franchise industry is fond of its mantra that the best franchisees are those who strictly follow the rule-book – for good reason, because the whole idea of franchising is based on replicating a proven recipe that should not be tampered with. But is there a place for an entrepreneurial franchisee?

Russell Minter-Brown believes there is – he’d better, because franchisees don’t come more entrepreneurial than Russell. The 48-year-old owner of two Hussar Grill franchise outlets in Cape Town has over three decades of experience in the restaurant industry, during which he waited on tables, managed restaurants as a company employee, ran the operations of a restaurant chain at age 23, supported dozens of franchisees as an area manager, travelled the world, owned and sold numerous of his own franchise outlets, including an independent restaurant, started his own pie franchise and later a specialist brokerage which sold 75 restaurants in six years. And he can still, single-handedly, grill stakes for 150 people in one evening when called upon to do so.

This last feat was undertaken to prove to the owners of the Hussar Grill restaurant group that he knew some of the practical aspects of running a restaurant. Because he helped them with analysing the prospects of a site for their third outlet, they knew him only as a business broker.

Had they known the true depth of his experience, they may well have baulked at taking him on as their first franchisee. Restaurant franchise groups generally prefer non-restaurateurs as franchisees because they are more trainable in the ethos of the group, they tend to follow the franchise rules better and refrain from tampering with the proven way of doing things. Experienced restaurateurs are more inclined to want to do their own thing and bend the rules.

Russell is no exception. He is the first to admit that he can’t stop himself from constantly trying new things, or new ways of solving the constant problems that crop up in even the most established restaurant franchise.

He cut his teeth in the Wimpy group in the 80s and 90s, first as a company employee managing, overseeing and supporting dozens of franchisees. By the time he bought his own Wimpy outlet in Midrand, then Halfway House, he was steeped in the Wimpy rules. Yet that did not stop him from tweaking the Wimpy look-and-feel in his restaurant to give it a more homely ambience – to such an extent that the group almost refused to let it open on the scheduled launch day.

He constantly innovated, ordering new technology such as bun toasters, fryers and hot water systems from overseas, winning over a sceptical and sometimes horrified franchise head office with proven results. Russell puts his innovative approach down to his upbringing in Zimbabwe where one had to use limited resources with ingenuity in order to prosper.

But as someone who cut his teeth in the franchise industry, especially as a former franchisor himself, he also has a keen sense of how important franchise rules are in order for a franchise group to prosper.

This paradox has given Russell a much more nuanced view of the role of entrepreneurship in franchisees – it is not simply a bad thing. The most established franchise brands, says Russell, have developed and improved through the new ideas and suggestions of their franchisees.

Some franchise groups take these ideas more seriously than others, and make more space for innovation in the group culture. But Russell believes that the way in which a franchisee goes about it is also important. Respect for the franchise agreement and sense of partnership with the franchisor are always important. The franchisor needs to be persuaded carefully of the merits of a good idea, and nothing persuades more than proven results, which often requires a bit of small-scale experimenting with a new way of doing things.

It helps if the franchise group is fairly new and still developing. Franchisees with a strong entrepreneurial flair should rather avoid very old and established franchises, says Russell.

In this sense, he found the Hussar Grill a very good fit. Although the original family-owned restaurant in Rondebosch, Cape Town, has been going for almost 50 years, it started expanding relatively recently with two company-owned outlets. Russell opened the first franchised outlet, the fourth outlet overall, in the Willowbridge shopping centre in Bellville.

Business Partners, with whom he had built a good relationship as a business broker, gave him a five-year loan, which Russell describes as “quite a risk” for the financier. Not only had the previous restaurant occupying the premises failed, casting doubt over the suitability of the site, but it was 2009, in the midst of the Great Recession. The banks simply had no appetite for restaurants.

The strength of the restaurant concept and Russell’s vast experience kicked in, and the outlet soon became the best performing branch of the group. Scarcely three years later Russell and his wife, who takes care of the administration, opened their second Hussar Grill in Tokai, this time with a partner, Jason Allen, whom Russell got to know as manager at the Bellville branch. Once again, Business Partners financed the deal.

Russell sees himself owning even more outlets in future. The young, developing franchise with a bright future presents enough opportunities to satisfy his entrepreneurial urge

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