LifeBrandz Limited (‘LifeBrandz’) was established in 2001 and has been listed on the Singapore Stock Exchange since 2004. LifeBrandz is a brand development and management group with interests in lifestyle-related and entertainment sectors, leveraging on its core competence in developing brands.
LifeBrandz’s impressive portfolio of both local and international F&B establishments include home-grown concepts in The Cannery, Clarke Quay – ZIRCA Mega Club, REBEL Boutique Club, LUNAR Asian Fusion Bar, YUE Music Suites & live Lounge, YELLO JELLO Retro Bar, CLINIC Terrace Bar, MULLIGAN’S Irish Pub, BORGATA Italian Restaurant, and the widely known CAFÉ DEL MAR located at Sentosa.
Beginning of the Franchise Journey
One of the brands under the company, Mulligan’s is a home-grown Irish pub and restaurant concept that serves good value Irish food and beverage culture.
Mulligan’s is all about the authentic Irish pub experience. Its inviting, warm and rustic interior feels just like coming home as antique Guinness, Irish liquor posters, artwork and photos decorate the walls, completing the quaint Irish charm. As customers enjoy traditional Irish fare, sports enthusiasts can also cheer their teams on as exciting games are screened on the plasma television and projection screens throughout the bar.
Today, Mulligan’s is located at Clarke Quay, as well as on a beachfront in a prime vacation district in Pattaya, Thailand.
Having the positive market conditions in LifeBrandz’s main market of Singapore, LifeBrandz is optimistic about continued strong performance, underscored by improving and record tourist arrivals in Singapore, and the belief that franchising can expand their current presence and markets. As the market leader in this lifestyle-related and entertainment industry, LifeBrandz embarked on a franchising program in January 2011, aimed at penetrating the local and overseas markets, with Mulligan’s as the first concept in this franchising journey.
The primary objectives of the franchising journey are:
√ To develop and strengthen Mulligan’s brand and presence to distinguish them from competitors;
√ To provide a strong catalyst for corporate growth of the Mulligan’s brand name;
√ To build a scalable franchise system as the foundation of Mulligan’s business model.
Understanding the Foundations and Existing Systems
Understanding of the company’s Unique Selling Points (USPs), competitive advantages (internal capabilities), as well as market trends and analysis (external conditions) are conducted during this Phase. In today’s market place, as price and products are not sustainable entries to barriers, we need to understand the market conditions and position the offering to attract potential franchisees for business expansion.
To unravel these USPs, competitive advantages, and external market conditions, the following activities are conducted:
√ Management interviews to understand the USPs and competitive advantages –
questionnaires are prepared prior to these interviews to obtain key findings;
√ Market research and findings to ascertain external conditions such as preferred
entry conditions, existing competitors, consumers’ analysis – primary and
secondary research are conducted to obtain these findings.
Another key aspect under this Phase involves the assessment of Franchise Fee and Royalties, for the following reasons:
√ Attracting the right kind of franchisees;
√ Proposing the range of Franchise Fee and Royalties to franchisees;
√ Managing the expectations and cash flow of the franchisor during the relationship;
√ Pricing the Franchise Offering competitively in the market.
Financial analysis is used to provide our recommendations on the proposed franchise fee and royalties for the franchise relationship. Conducted with in-depth discussions with the Franchisor, this analysis takes into consideration the initial cash flow outlay expected from the franchisee (franchise fee, renovation cost, equipment investment, rental deposit, working capital, initial inventory etc), as well as the recurring operational inflow and outflow of the business.
These financial analyses are conducted with the franchisees as the main focus. Analyses are conducted with the franchisees as the “customers”. It is similar to attracting a walk-in customer to your restaurant by presenting your food menu with the relevant pricing details to justify the price-food offering proposition. Franchisees must be able to see value in the franchise and justification on the investment-return analysis.
Leveraging on this financial analysis, franchisees are able to estimate the breakeven period required for the franchise, thus benchmarking the franchise offering against other similar ventures in the marketplace.
Development of the Business Model and Franchise Manuals
During this phase, we explored the options of various form of franchising with the Franchisor. The applicability and positioning of Master Franchise, Area Franchise and Single Unit Franchise are considered, taking reference to the territories in which the Franchisor is keen to explore into.
In most instances, for local franchising in Singapore, Franchisor offers only Single Unit Franchising as the Franchisor already owns outlets locally. For overseas markets, Franchisor may opt for Area or Master franchising to expand its reach and foothold in these territories.
Franchise pricing has to be consistently priced to eliminate any arbitrage and/or abuse by either of the parties involved in these long-term franchise relationships.
Phase 2 of the development of Franchise Manuals includes the following, namely:
√ Pre-Opening Manual;
√ Operating Manual;
which are conducted via interview sessions with various personnel within the organization, existing records, best practices from the industry, and experiences drawn from the Consultant’s previous assignments.
Contents of the Pre-Opening Manual may include (not exhaustive):
√ Introduction to Franchisor;
√ Policies and Best Practices of Franchisor;
√ Rules and Policies of Franchisor;
√ Intellectual regulations of Franchisor;
√ Exterior and Interior Design Setup (if applicable);
√ Facilities Set-Up Processes and Procedures;
√ Licenses and Regulatory Requirements for Setup;
√ Staff Recruitment and Selection;
√ Staff Requirements and Criteria;
√ Pre-Opening Promotional Activities
Contents of the Operating Manual may include (not exhaustive):
√ Franchisee Corporate Organization Structure;
√ Roles and Responsibilities of Personnel;
√ Support Personnel Roles and Responsibilities;
√ Inventory Management Policies;
√ Cashier’s Roles and Activities;
√ Customer Service Policies;
√Manpower and Curriculum Planning;
√ Financial Management;
√ Staffing Matters;
√ Result Feedback and Performance Tracking
Contents of the Training Manual may include (not exhaustive):
√ Customer Service Training to Support Staff;
√ Marketing and Product Training to Marketing Staff;
√ Corporate Information and Culture Training to all Staff
For each of the Manuals developed along with the Franchisor,
different personnel from the Franchisor are involved with the
Consultant. Pre-Opening Manual involves the Projects Team
and the Marketing Department as they have been involved in
the set-up and establishment of the restaurant. The Projects
Team have in-depth knowledge and had been involved in the
various procedures such as equipment procurement, licenses application, restaurant design and renovation, initial advertising and promotions (A&P) conceptualization to get the restaurant ready for its soft launch and grand opening.
Operating Manual involves the restaurant floor manager and staff as it entails the daily activities in running the restaurant. Personnel involved will include the Operations Manager, Kitchen Manager and Chefs who oversee the interaction with the customers. Regular sessions are conducted, with questionnaires, to capture the experience and knowledge of these individuals and the team, ensuring that the Manuals developed for the Franchise System, is applicable and practical for actual usage at the franchisees’ restaurants, thus maintaining the procedures and standards established by the Franchisor, for consistency in service and customer delivery to the customers.
Training Manual involves the restaurant floor manager and the corporate management as it entails a positive experience for all customers visiting Mulligan’s. Relevant personnel from the Corporate Communications Department are involved with the Consultant to develop the Training Manual to ensure high standards of Customer Service and Food Standards, as well as the overall Corporate Standards of the Brand and the restaurant. Manuals developed are used to train the franchisees’ staff and management, thus ensuring high standards for the Brand and the restaurants’ expansion.
Franchise Agreement/Marketing Kit/Negotiations with Franchisees
During this Phase, we worked closely with our legal partners to draft up the relevant documents for the franchise offering. These include various documents such as the letter of offer and the various franchise agreement formats (Master, Area and Single Unit).
Mulligan’s is also equipped with the relevant franchise application forms and business plan templates, necessary for the potential candidates to fill them up to assess their suitability and viability.
Franchise Marketing Kit is also being developed, to position Mulligan’s for offering their franchise opportunities during relevant tradeshows. The Franchise Marketing Kit can also be used for other related trade events in Singapore and overseas.
Frequently Asked Questions (FAQ) and Corporate Factsheet about the franchise offerings are also included within this Franchise Marketing Kit, along with photos of various food offerings and write-up about the uniqueness of the concept.
In summary, Phase 3 includes the following documents:
√ Letter of Offer;
√ Franchise Agreement;
√ Franchise Application Form;
√ Business Plan Template;
√ Franchise Frequently Asked Questions;
√ Franchise Marketing Folder with Profile and Offerings
Launch of the Franchise Opportunity
With the completion of the Franchise Foundations, Business Model and Franchise Manuals, as well as the Marketing Kit, Mulligan’s is ready to expand its footprints to both the local and overseas territories. The recent participation of the brand at the Franchising and Licensing Asia 2011 (FLA 2011) show in September 2011 at Marina Bay Sands Exposition is a further testimonial on the readiness of Mulligan’s – a concept of Lifebrandz, to leverage on franchising for brand expansion and extension.
As Mulligan’s leads the way in franchising, their success will open the doors for more restaurants to follow suit and consider franchising as one of the options in expanding one’s business, both locally and overseas.
Gary Loh is the Director of Purpleclay Consulting Pte Ltd, which is a franchise consultancy firm and grant application specialist. Purpleclay Consulting has assisted many promising franchise brands for local and overseas expansion, as well as assisting these brands in winning various business accolades and awards. This company is an approved SCOPE-IP Business Consultant under the Intellectual Property Office of Singapore (IPOS) and an I-Advisor under International Enterprise Singapore (IE Singapore).
Gary can be reached at +65 6561 3011 or email at contact@ purpleclay.com.sg. For more information, visitwww.purpleclay.com.sg