When Michele and Ken Fourie decided to return to South Africa after living in the States for five years, they also decided to start their own business. With this in mind they gathered several ideas from their US surroundings and headed back.
Upon their return they noticed that what was a huge trend in the US, frozen yoghurt was pretty much absent from the South African landscape.
So, pairing up with their long-time friend David Clark, they set about starting their own frozen yoghurt business in Florida road, Durban.
From idea to business to success
“We felt that it was a really good concept as in the States it’s taken over from the traditional café and coffee shop culture. Now, people go for a healthy frozen yoghurt instead of coffee. But we didn’t just want to copy and paste an existing concept on South African soil, what we wanted was a brand that focusses on experience,” says Michele.
As a result they took a big leap and secured an art gallery as their first location and sourced a dairy who could supply them with 100% fresh yoghurt.
“People thought we were crazy for taking on an art gallery, but we wanted the store to be a destination,” says Michele.
Having placed the emphasis they did on experience and product quality, within four months of opening the first store in May, 2012, it was so busy that they opened a second location.
From there, business boomed and the founders experienced such interest in the brand by people wanting to buy in, that they decided to franchise the model.
Quick but managed growth
Converting to a franchise model was not what the founders envisioned for Wakaberry, but the success of the brand has meant franchising was the best method for expansion.
“We’ve been inundated with applications for franchises which is fantastic, but we’re also being really careful about who we sell units too. Maintaining the brand’s philosophy and quality is our top priority,” says Michele.
To date they’ve opened 13 stores, with more in the pipe line, and have received hundreds of applications.
Having shifted to a franchise model has meant they’ve needed to bring on extra people and systems than what they originally started with.
“We now have a brand developer so we can grow the brand sustainably, and we’ve had to hire managers for our original two stores as we’re not able to be there full-time. We’ve also we’ve put a lot of effort into expanding our supplier base in other parts of the country.”
Converting to a franchise model
When converting a business to a franchise model, ensure you’ve considered the following:
- Is it what you signed up for?Being a franchisor requires a whole different skills set to being an independent business operator. You’ll be required to select, train and manage franchisees, monitor the systems of the brand, collect fees, manage legalities, watch that the business grows sustainably. Chances are, you’re going to have to give up the activities you do now (including running your own business) in order to run the brand.
- Is there a local market?It’s one thing having a successful store or two in an area, but will the business be supported in the same way outside its existing ecosystem? Will customers respond with the same enthusiasm? Ensure that you conduct thorough market research before expanding.
- Can the business be systematised?If your business is going to succeed as a franchise, every aspect of the business needs to be systematised and products and services standardised. If you’re offering a unique product or service, is the offering scaleable without negatively impacting quality?
- Do you have your numbers right?Converting to a franchise model in itself is a costly exercise, but before you launch your franchise plan, prepare a thorough business plan so you can look at the financial outlay each new outlet will require to get up and running. You might be getting an injection of funds through each franchise sold, but in turn you’re going to need to compare it with the revenue you expect to receive from fees and royalties, and include costs that are specific to franchising – like trainers, ops teams, sales staff, marketing and advertising for the brand and for new stores, travelling, attending expos, and of course ongoing legal and accounting fees.
- Always be overly conservative on the timing and income you expect from your franchise outlets.Pad your expectations of when revenue will flow back to you instead of basing your predictions on how your business worked in the past.