Introduction
Demand for Mexican food is probably the fastest growing in the restaurant industry in Canada. Steve Grill realized this and founded Quesada Burrito in Toronto in 2004. Although Burritos were doing well in United States and other parts in North America, none was in existence in Toronto by then. Despite having no experience in restaurant industry, Steve decided to take the risk of starting up a Burrito restaurant. His brother Greg, who was an information technology consultant joined the business later which was a major boost to the business. This led to expansion as the two opened up four other Quesada restaurants in a span of 6 years whose success was unimaginable. The idea of franchising came in 2010 when the two met Tom O’Neill who was a frequent customer at Quesada (London, 2011). Tom is a prominent investor who was quick to notice the opportunity. This led to a partnership between Steve, Greg and Tom to run the Quesada restaurants .After some deliberations, the three decided they had the requisite skills and experience to get into franchising.
About Quesada Burrito Franchisees
Since Quesada started franchising in 2010, it has 22 restaurants spread across Canada and a robust plan is in place to develop others to hit a target of 40 by the end of this year. Some of the locations it is targeting include Saskatoon, Calgary, Kitchener, Cambridge Brockville, Quebec City, Mississauga and Brampton. Quesada has prepared the ground for franchisees and their track record is incredibly remarkable. Mexican segment has been the fastest growing providing potential franchisees with every reason to invest the money in the industry. Quesada menu includes quesadillas, burritos, tacos, salads, shrimp, chicken, pork, fish and vegetables. The total starting up a Quesada franchise ranges between $156000 and $236000. Franchise fee paid directly to the franchisor is a flat rate of $20000 while an ongoing royalty fee of six percent (6%) is applied. The minimum franchise term has been agreed at fifteen years subject to renewal upon application by the franchisee. It is worth noting that around fifty percent of all franchisees have control and ownership of more than one Quesada units. To run a franchised unit, a franchisee must have at least 5 employees (London, 2011).
Strengths and Opportunities for Quesada Burritos
Mexican foods have a capacity and tremendous potential for sustained growth. People’s tastes and preferences in Canada have changed over time and they are increasingly looking for the tangy and spiced Mexican flavor. Canadians have become more adventurous especially with regards to food and drinks than it used to be in the past. In addition, they have become more health conscious and choosy in their choice of what to eat and drink. Judging by the variety of dishes provided at Quesada Burrito restaurants, people fancy Mexican foods and the trend is not likely to change any time soon. Franchising has created room and opportunities for franchisees with better models for doing business (Fisher, 1998). The core reason for franchising was to develop a win-win situation where both franchisor and the franchisee made money. Franchising is an excellent way to grow your brand and as well as infrastructure that is well thought out.
Threats and Challenges encountered in growing the franchisees
Some of the challenges a franchisor may encounter in growing the franchise include establishing working systems to enable franchisees have control over labor as well as food costs. Putting in place workable development agreements and enhancing them structurally to allow the franchisees to give their input and control the direction in which the company is moving poses a great challenge. Developing an appropriate franchisees training programs to ensure they succeed is not an easy task. The hardest task is helping the franchisees in replicating success in their respective locations (Gordon, & Brezinski, 1999). Marketing is the backbone of any business that is interested in making good sales. Quesada Burritos in Canada has attempted to market their products to create awareness and position themselves well in the market although the target has not yet been achieved. This has been a challenge but the Quesada Burritos has in the recent past invested heavily in interned sites that seek to promote franchising.
Evaluation of Franchisor and Franchisees use of Marketing Mix
One of the factors that make Quesada franchises attractive is that it is the most fairly priced in the market. If a comparison of the initial investment requirements with other franchising companies in the restaurant industry, one will notice that the price is relatively low. Unlike in other franchising agreements, design cost as well as blueprints is included in the franchise fee. In addition, the franchisee is at liberty to choose a contractor to put up the restaurant which saves them huge amounts of money. This franchisor aims at building a win-win long lasting relationship as well as encouraging team work in creating value for Quesada brand with the franchisees. Quesada Burritos provide customers with outstanding Mexican foods and drinks that have gained popularity in Canada. The restaurants have been rated the best in promoting diversity as well as the most thriving franchise in the restaurant industry (Norman, 2006). Quesada Burritos have leveraged technology in marketing their products. They have extensively applied social sites as well as websites promoting franchise arrangements to advertise their products and position themselves well in the market. Quesada’s ultimate goal is to build the number one Mexican food brand across Canada. If one has a passion for restaurant industry, setting up a Quesada franchise in a preferred site is probably the best option for him taking into the numerous advantages and opportunities for growth available. It is a golden opportunity to increase net worth in a community of franchisees who share the same goal.
Recommendations to Quesada as they plan to develop other franchisees
Site selection is one of the greatest factors that contribute to success of franchising. The ultimate goal of franchising is to minimize risk on the part of franchisees (Bradach, 1998). Before licensing a franchisee, Quesada should carefully inspect the proposed site to determine whether it is strategic or not. In addition, the franchisor should ensure that proper systems for management are in place with skilled employees to ensure the success of the franchisee. In addition, the products and services provided in the sites should meet quality standards because at the end of the day franchising is about creating overall value for Quesada Mexican foods brand (London, 2011). Further, training programs that incorporate meetings, seminars, and conferences should be put in place to prepare the franchisees well before they start carrying out their business. Manuals should be made available to guide the franchisees in making decisions that affect the running of franchisees. This way, the franchisor will have won the hearts of franchisees and they will be good to go.
References
Bradach, J. L. (1998). Franchise organizations. Boston, Mass: Harvard Business School Press.
Fisher, D. P. (1998). Successful restaurant strategies: From start-up to franchising. Toronto: Hospitality Ink.
Gordon, R. T., & Brezinski, M. H. (1999). The complete restaurant management guide. Armonk, N.Y: Sharpe Professional.
London, J. (2011). A simple guide to buying a franchise: The questions you should ask, but franchisors would rather you did not. Luton: Andrews UK.
Norman, J. (2006). What no one ever tells you about franchising: Real-life franchising advice from 101 successful franchisors and franchisees. Chicago, IL: Kaplan Pub.
