Mastering the science of Yogurberry franchise
Taking master franchise for a brand in multiple countries is challenging as well as rewarding. In an interview Abdul Kader Kara, MD, Synergy Holdings Ltd shares his experience of expanding ‘Yogurberry’.
Namita Bhagat (NB): Your company has master franchise for Yogurberry in multiple countries. How did you decide to represent the brand in several countries?
Abdul Kader Kara (AKK): We have Master Franchise (MF) rights for the South Korean brand ‘Yogurberry’ in Bahrain, Oman, Qatar, and India. There are several reasons for which we chose to take the brand’s MF in multiple territories. We strongly believe in the brand, its offerings, values and consumer satisfaction of the products. Being based in the UAE and having the advantage of being central to many countries, continuous support to AF (Area Franchise) and UF (Unit Franchise) is manageable. Accessibility to the respective MF's is available on a continuous basis. The synergy we share with the principles in Korea is great and we facilitate the vision each party has for the brand.
We also have Yogurberry’s sub franchise rights in the UAE with brand’s MF in the Emirates. Here, we have three stores and three more are coming up soon.
NB: What are the challenges for owning multiple international locations as a MF?
AKK: The biggest challenge a MF faces is understanding location. Location of any outlet is the key factor taken into account in addition to consumer footfalls and spending patterns. To a large extent, the territories we have the rights for are not new markets for us. Pawan, a partner of the company, is born and brought up in India. We have been residents in the UAE for the past eight years and are exposed to the Middle East culture. Also, we understand the markets we are venturing into.
NB: What are the points of legal and regulatory considerations for operating in multiple countries? What are the rewards and risks?
AKK: We take great care in ensuring that the laws of each country are respected and followed. We clearly stipulate in our contracts that the AF must adhere to the requirements set out by the respective authorities in each territory. Taxation varies in each country and that too needs to be taken into account. In some countries there are religious and local customs, such as being strictly vegetarian which we enforce in line with the legal considerations.
The rewards are the ‘royalties’! We take pride in seeing the brand ‘Yogurberry’ growing internationally under our company. We have to carefully choose our partners (AF's) in each territory as any error by one party affects the brand image globally.
NB: How do you select the various international locations for the MF portfolio?
AKK: We considered factors like accessibility, a full understanding of the local tastes, culture and trends, infrastructure, barriers to entry, competition and set up costs for a store etc.
NB: As a MF for multiple countries, how do you maintain standardisation?
AKK: All the initial training for our franchisees is done in our stores in Dubai under close supervision. A team from Dubai will facilitate and assist the opening of the first store, ensuring all requirements are met. In addition, a team from Korea (the principles) also flies down before the opening of the first store. On a continuous basis, a member from our team will be dedicated to each territory providing full support and operational assistance. We have manuals and guidelines which have to be strictly followed therefore maintaining standardisation worldwide.
NB: Do you have separate terms for each country regarding fee, royalty and profit sharing? How do you view the performance of all of your MF locations?
AKK: Yes, each territory is unique in its offerings and therefore carries different terms. One can not compare the potential a country like India has, to a country like Bahrain, due to obvious reasons like the size and population. Further, franchising does not give instant profits rather one sees the fruits of the efforts over a longer period. We gauge our success by the growth of the brand rather than monetary gains. Yes, financial profits are important and vital to the success of any company however, we believe that sustainable growth ultimately leads to capital growth.
NB: What would be your advice to the prospective businesses or entrepreneurs seeking Master Franchise partnerships for multiple countries?
AKK: A strong financial backing, a good team and a passion for the brand are the key, if you are looking at a Master Franchise, whether for a single territory or multiple.
