Noodle and company may also consider refranchising selective company owned restaurants to grow existing and new franchisees to represent a larger percentage of the system wide restaurants.
The franchisor model requires significantly lower capital investment by the franchisor and generates revenues, in the form of development and franchise fees and royalties, which are less volatile than company owned restaurant revenues. The franchise operators can better support the development of Noodles and Company brands in markets that are less penetrated than their well-established markets and provide significant opportunities for unit growth. The success of this initiative will largely depend on Noodles and company’s potential for identifying qualified
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As of now, only 14 percent of Noodles and Company locations are currently owned and operated by franchisees, the company by increase that percentage to about 20 percent (i.e. from 75 to 106 units) by the end of 2019, with the same restaurant sales can boost operating revenue by 2 to 4% (approx) in the next 2 years. In addition to an assured share of revenue, this will help the company bring in significant general and administrative savings. Comparable restaurant chains such as Wendy’s and Jamba Juice have also increased the proportion of franchised locations to cut costs and bring in more cash.
Remaking their organization to align with their strategy is an undertaking that the senior management of the corporate will lead. Although it’s not practical for the executives to manage the day to day details, the senior leadership must be consistently present to work through the major issues and alternatives, focus the design team on the future, and be accountable for the transition to the changes made. The leaders are expected to set the tone for future updates e.g. changes in technology, customer preferences, and redrawing the lines and
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Noodles and Company must lay out a sequence of interventions that will lead the company from past to the future. Therefore, the first changes in the sequence concerned the building blocks, e.g. eliminating non-productive meetings (information), clarifying accountabilities in the matrix structure (decisions and norms), and changing how people are rewarded (motivators). Once these changes are successfully implemented, most of the problem factors would have been addressed and it will be easier for the management to adjust the organizational chart
Philip Lief Group and Lynie Arden. 220 Best Franchises to Buy: The Essential Sourcebook For Evaluating the Best Franchise Opportunities. New York, NY: Random House, 2000. Print.
...alented young managers in this area need to be aggressively obtained for long term growth. For a quick fix, this service should be outsourced to handle current needs. Distribution channels need to improve as well. Currently, competitor’s products are easily found at major retail channels. Nestle is in the position to gain a strong hold on the home dessert market for ice cream. Ice-fili needs to compete more aggressively in this portion of the market. In addition franchises and fast food chains should be targeted for partnerships or joint ventures so Ice-Fili’s ice cream can grow in association with a post meal dessert opposed to simply impulsive snack purchases. A key avenue to explore is an Initial Public Offering. This would generate enough funds to continue capital investment in technology desperately needed as well as promoting international market growth.
PepsiCo can potentially acquire California Pizza Kitchen and integrate it in the company’s decentralized management approach. Since PepsiCo executives have experience in the quick service food industry, it should not be a reach for the company to successfully run this casual dining restaurant. For this venture to be successful, it is imperative that management cut down the operating costs at California Pizza Kitchen through the PepsiCo Food Systems distribution network and improve on the 3.1% operating margin that California Pizza Kitchen is currently operating at.
The restaurant business is a challenging industry and if a company has a strategy that works for them as well as their employees, it should stay the course and tweak as needed.
Demand for Panera franchising opportunities was very high, which allowed Panera to be picky about where and with whom they would do business. Panera determined where bakery-café locations could be. The franchisees bore the cost of opening new locations, and were required to obtain their ingredients from the home company. Expansion using the franchise model provided many upside benefits for Panera, while limiting the downside r...
Porcini’s doesn’t present itself strong financially, so franchising could reduce this capital burden; however, franchising has considerably high cost and risks of having little or no control of the restaurant operations. The final option is syndication, provides Porcini’s with benefits of control without need of a large amount of capital investment. Additionally, syndication will transfer ownership to investor, but Porcini’s will maintain control. Furthermore, it will allow Porcini’s to control the hiring, training, and performance of management and consistency of the food service quality at each new property (Heskett & Luecke,
Remove barriers: If follow these steps and reach this point in the change process, and will discuss the vision and build the support of all levels of the organization. The Organization shall review the organizational structure, job descriptions, compensation and performance systems to ensure they are in line with this vision. Create urgency for change to occur, it is useful if the whole society really wants. Develop a sense of urgency about the need for change. This can help the company Alphabet Games spark of motivation to get things moving. It will help to identify potential threats, and develop scenarios showing what could happen in the future. It also examines
KFC is one of the most popular fast-food restaurant chains by the Yum! Brands and fried chicken is what the company specializes. KFC was founded by Harland Sanders, which was later known as Colonel Sanders. Moreover, KFC was one of the first fast-food restaurant chains to expand internationally, including the opening outlets in Beijing, China, in November 1987 (KFC Website, 2013). The fact that KFC was the first Western fast food company in China makes it very challenging to satisfy the Chinese market. Trying to sell the same products or services is a typical approach to most foreign expansion for franchise businesses (Bell, 2011). However, one-size fits all approach is not what KFC chooses to apply for their company. According to Shelman, the writer of the case study regarding KFC’s Explosive Growth in China, key success for KFC China is to change the menu to suit Chinese tastes and style of eating (Starvish, 2011). “One of the lessons I take away from this case is that to ...
Another strength is Burger King’s franchise development having 90% of its restaurants franchised. The franchise concept allowed the company to grow with minimal capital expenditure and receive royalties and fees. Burger King went above and beyond and created a new model of its restaurant to attract mo...
An evaluation of the restaurant’s strengths, weaknesses, opportunities and threats served as the foundation for this marketing plan. The plan focuses on the restaurants marketing strategy, suggesting ways in which it can build on new customer relationships, and development of new food products and targeted to specific customer groups.
... conclusion, to compete with the intense competition in today’s fast-food market, KFC China differentiates the company by being innovative. Three significant innovative strategies are localizing the menu, understanding the Chinese culture, and hiring local management. KFC demonstrates that one size fits all approach in the global market does not always work. Many typical Western approach to foreign expansion is to deliver the same products or services as their original establishment. For instance, Domino’s Pizza, an American restaurant chain, nearly failed in Australia due to the underestimation of the need to adapt their offerings to the local tastes. KFC China offers important lessons for global firms. It is essential to know that to what extend the company should keep the existing business model in emerging markets and to what extend it should be thrown away.
Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand without having to pay such a large initial cost to open a new store since the franchise purchaser pays a cost to open the business. As well, the company can regulate many of the business activities so that there is a sense of consistency throughout all of the locations. The purchaser is allowed to use the trademarks and goods of the franchise which already have a large market presence. As well, they are provided with training and work standards by the company to help their business run smoothly (Kalnins & Lafontaine, 2004, p.761). Looking at the business model of the world’s largest food retailer, McDonald’s, provides great insight into franchising and business growth in general as well a better understanding of a global business that utilizes the franchising technique.
By choosing to expand into markets later than other fast food restaurants Burger King hopes to avoid the problems of developing infrastructure and establishing a market base. For instance, by following McDonalds into Brazil, Burger King avoided the need to develop the infrastructure and mark...
This means very bad news for our business because there is already a lot of competition making it harder for us to succeed in this market. Another problem with our business is that there is also a lot of preparing involved due to that we would need to prepare the food and make sure that we have enough supplies to sell and make things run. The final problem that we might encounter is financial issues because we do not have any money and would have to ask or get a loan from the bank. What will make our business different is they food, the service and who we are trying to help. I noticed that majority of the restaurants that I go to, their menu are always the same thing, Tacos, Burritos and quesadillas.
The first step in any business is to think of or create a business idea. Without an idea, one cannot launch their business off the ground. A right direction is needed to create a business with a unique idea. However, other options include franchising or buying an existing business (1). Franchising allows an individual to run stores such as Burger King or McDonalds under the corporate name. It involves taking training classes and a heap of money in order to start a franchise. A Franchisee will have to buy products and services from the corporate entity they are franchising from, which is often required. Buying a franchise is like taking a piece of the pie from the company that is franchising and sharing that pie with everybody else. In addition having a franchise allows one to communicate and in essence become a big part of an added business opportunity (4). Franchising is far from easy to start and maintain for that matter. Starting a franchise involves a l...