Focusing on franchisees’ needs led ice-cream giant Baskin-Robbins to successfully implement a strategy to refresh the brand experience for franchise partners and customers alike.
Baskin-Robbins, the world’s largest chain of ice-cream shops, found itself struggling to maintain brand loyalty and increase its US footprint. Growth is key to every franchise’s survival, so when only four new locations of Baskin-Robbins were opened in 2013, the franchise had to make some important decisions to ensure future profitability.
After its Australian franchisor Allied Brands went into bankruptcy in 2010, Baskin’s parent company, Dunkin’ Brands International, stepped in to manage the company, leading to a joint venture with Dubai-based Galadari Brothers Group in 2013.
“The brand had been stagnating for quite some time within the marketplace without clear direction and so that was a perfect opportunity for us as a joint company to be able to stop and then start the brand transformation process again and rebuild the brand from the ground up.” – David Jordan, Australian General Manager, Baskin-Robbins.
Allied Brands’ financial difficulties had compromised supply, and had led to a decrease in quality of service. Acknowledging that Baskin-Robbins had lost its brand affinity with Australian consumers, the brand appointed a new general manager.
Steps Baskin-Robbins took towards sustainable success
As an experienced franchise manager with a strong understanding of the brand, David Jordan was key to executing Baskin’s turnaround. Here’s how he successfully contributed to the opening of 14 stores in his first year and ensured sustainability of the business.
1. Focus on franchisee needs
“For a long time, our franchise partners had told us they felt that they didn’t have an ability to influence strategy, so that was really important for us to take a step back,” says Jordan. “The first real critical juncture for us as a business turnaround strategy was to undertake a meeting with all of our franchise partners across the country.”
Through these national meetings, management was able to learn more about the business from a different perspective and understand the opportunities franchise partners envisioned for brand. This led to the creation of a three-year business plan that had buy-in from franchisees.
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“From stopping and listening we were able to generate a list of over 15 pages of amazing initiatives our franchise partners identified,” says Jordan. Franchisee satisfaction has since risen from 40% to 93% proving that franchisees are the company’s 93% core stakeholder.
“It was really important for us to not deliver any messages other than ‘I’m there to listen’ and ‘I couldn’t control the past’ and ‘I can’t empathise enough with what may or may not have occurred’, but what we had to do was move forward together, and the only way we were going to do that was to build an alignment with our strategies.”
2. Continuously refine and align strategy
Jordan’s aim was to give his team autonomy within the systems and framework he intended building. This involved getting the right people in the right roles, which he describes as a challenge, as with any change management or business transformation process. “But we had to make the right decisions for the business, and we did that,” he says.
“Establishing values and beliefs within the organisation and breaking down silos improved ongoing communication within the company. We set up some drivers that we call our communication style of how we’d like to communicate with individuals and how we’d like to be communicated to, and then in turn, what that did was enable us to start to build a basis for what we thought our culture should be as a business,” says Jordan.
A key component of Baskin’s new internal process was to create a ‘why’ statement which currently forms the basis of the brand. Instead of aiming for increased profitability, the company’s purpose is simply to make people happy. How?
“By creating amazing memories and unforgettable experiences,” says Jordan. “We just happen to sell the world’s best ice-cream.” Every team member of the franchise not only knows that, but personifies it.
3. Give customers what they want
Shortly after Jordan took over, Baskin-Robbins announced the launch of a new online cake ordering system. The aim was to make it even easier for clients to customise and order ice-cream cakes from wherever they are through the company’s website.
By simply browsing through Baskin-Robbins’ gallery, consumers were now able to create their own customisable cake, choosing their favourite ice-cream and cake flavour combination, along with a choice of several cake shapes and sizes.
“Guests can also choose from a variety of additional items, including birthday candles, to make their get together or celebration even more special,” the company explained. “Online cake orders will be available for pick-up on the date selected by the guest, with cakes available as soon as 24 hours after the order is placed.”
4. Expand into international markets
Although at its lowest point, Baskin-Robbins’ expanded into only a handful of locations in the US, the chain’s hidden power is in its international growth, says Bill Mitchell, president of Baskin-Robbins US and Canada. Despite halting substantial expansion in the US, global expansion is growing exponentially.
“Something that surprises many people is that Baskin-Robbins actually has more locations internationally than we have in the US,” says Mitchell. The chain had 2 467 locations the US and 4 833 in 45 countries internationally in 2012.
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Key learnings from overseas stores enable Baskin-Robbins to overhaul its store design, operations and products.
“The international Happy 1.0 restaurant design, which has been successfully introduced in markets such as Canada, Japan, Mexico, Singapore and South Korea, became the template for Baskin-Robbins’ US restaurant design,” says Mitchell. This has also presented the opportunity for new flavours and ice-cream cake designs to be rolled out internationally before being introduced to the US.
5. Pursue additional revenue streams
The next step in Jordan’s plan of action was to create and package its products specifically for supermarkets and grocery stores.
“One of our goals with the launch of Baskin-Robbins packaged ice-cream and ice-cream bars at grocery stores across the US is to raise further awareness of the Baskin-Robbins brand, which in turn benefits our franchised Baskin-Robbins shops,” explained spokesperson Justin Drake.
“In addition, a portion of sales of our packaged ice-cream and ice-cream bars will be contributed to Baskin-Robbins' national advertising fund, which will directly impact marketing initiatives to further benefit the Baskin-Robbins brand.”
6. Adopt a modernised look and menu
Although parent company Dunkin’ Brands has allocated a reported $25 million advertising budget for Baskin-Robbins, compared to sister company Dunkin’ Donuts’ $350 million annual ad budget, Baskin-Robbins has succeeded at radically re-establishing itself.
The main change has been the adoption of a modernised store design, to keep up with the recent frozen yoghurt trend that has also played a part in endangering Baskin-Robbin’s market share.
In addition to a new look, the menu has also evolved to include a constant rollout of new flavours. The brand has increased its flavour offering from 31 to more than 1 000 options – including Mint Chocolate Chip, Jamoca Almond Fudge and Oreo Cookies ‘n Cream, and 53 flavours are also available online.