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January 2016

Is rapid brand expansion a good thing?


Let me start this with a fierce declaration… I love brands. I am passionate about branded business, brand standards, branded process and branded service. It’s my livelihood, my children’s inheritance!

Back in the day, and I mean some 20 years ago, there were a few business’ that called themselves “branded restaurants”, some even fell into the specific group known as “ATR” (American Themed Restaurant), and whilst they existed, they certainly didn’t have the gravitas or presence they do today. If you were a manager on the move you really had to work hard just to gain an interview, let alone secure a new role. There was stability and consistency of business and employment. There was, dare I say it, “harmony”.

With the recent purchase and re-sales of Brands such as Cote, Las Iguanas, La Tasca and Giraffe to name a few, the branded band wagon has rolled on with ever increasing momentum. The high street is now awash with “brands”, in fact the notion of the smaller independent restaurant is now most certainly becoming a minority in a multi-billion pound sector.

Banks love them, Developers pursue them, Landlords adore them, investors go crazy over them and the potential clientele await with glee for the opening of the “next big thing”.

New openings, new menu ideas, new fit outs, new cultures and new tastes are exactly what the market needs, but a cautionary note really should be heeded with regards to recruitment and, more importantly, retention of managers.

With such an abundance of potential employment opportunities the market has shifted into being a candidate driven one; and with certain brands planning 15-25 openings a year, the inevitable recruitment needs become painfully apparent. I understand the commercial notion of expansion and growth being paramount but at what cost? The market surely cannot sustain this.

Demand for property will outstrip supply, demand for strong, proven managers will be so great that operators are over promoting internally to fix and fill gaps within their teams, and ultimately the guest will be the one that suffers. With the opening of new “brown field” sites comes expectations on R.O.I, the P&L‘s are cut tighter to satisfy the investors wants and expectations, the pressures are increased, corners are cut, timings are rushed and before you know it you have a restaurant costing hundreds of thousands of pounds being run by poorly trained, over promoted, well meaning individuals delivering indifferent service to a fickle market place of guests who could easily visit any number of competitors every other weekend for a year without having to return.

The irony is damning, in an attempt to roll out, corner the market and have presence on every street corner, businesses can and most probably will in fact go rapidly into decline. Whilst the market place has an insatiable appetite for expansion, the guest count is in fact dangerously finite. The pressures will be exerted on the operators, the managers will become disenfranchised with their employers and as opposed to 20 years ago, the opportunity to be re-employed is immense & readily available. The knock on effect is a potential spiral of re-recruitment for the same positions along with trying to reduce the ever increasing vacuum caused by the projected openings programme.

So whilst I love brands and I love growth and absolutely love the sector, would it truly hurt if everyone just slowed down a little?

Written by Rob Mansell, Managing Director.

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