Franchising · 21 July 2015

Catering to local tastes is a franchise company’s best friend, says Shakeaway CEO Peter Dickson

Shakeaway has grown through openings in a variety of retail destinations

With so many Brits looking to run a franchise business, we asked Shakeaway, the re-inventors of the milkshake, about the secrets to shaking up the industry – and quizzed CEO Peter Dickson on his international success.

Shakeaway, deemed the world’s largest milkshake bar company, has recently expanded throughout the US. Lines were out the door, while customers admitted to driving for miles to sample the products – leaving others to shake in anticipation. At least that’s what the company suggested as it painted the picture of the launch of its New York addition.

According to CEO Peter Dickson, it’s the unique Shakeaway experience that keeps customers coming back for its customised-to-order milkshakes and smoothies. “Customisation excites guests, and it offers them a chance to create something completely tailored to their taste profile,” he added. “That’s a very unique and powerful experience in today’s marketplace.”

And with more than 180 ingredients, it’s no wonder why the company claims that you could live forever and never have the same milkshake twice. This, Dickson claimed, is due to Shakeaway operating under a one-of-a-kind, flexible business model with “low build-out costs and high gross profit margins”. The evidence is in the international expansion of the brand, which has received strong interest from more than 60 countries worldwide, with plans to open shops in 20 countries and counting over the next few years.

Shakeaway is proof that in spite of continuing pressures on the economy as a whole, franchising in the UK, and of British businesses abroad, continues to expand. The overall contribution of franchising to the UK economy is £13.7bn; which equates to just under one per cent of GDP. This contribution has grown by 20 per cent over the past five years, whilst the overall economy has shrunk 2.5 per cent over the same period.

Its menu range has also expanded to includes offerings including frozen yoghurt

The trick to making it big, when one takes Shakeaway into account, lies in developing a concept that would work in almost any marketplace. Shakeaway’s flexible concept offers room for individuality and the ability to maximise the business opportunity locally with a unique “three-tiered” marketing program that drives brand awareness tailored to each market.

“We make sure that our menus and marketing are ‘country right’,” Dickson said. “In short, we do not sell a franchise in a box, we sell a concept that can be adapted to local tastes. We have also re-invented fries, yoghurt and smoothies. It has helped us to develop the business by ensuring that we never do anything if it is not honest, fair and reasonable at all times.”

With Dickson maintaining that globalisation and international expansion are fundamental to business growth, he suggested that “companies needed to look at a number of factors to review such as economic, evidence of international brands, weather, ingredients availability and costs, language, retail market size, etc.

“Obviously the more stable and developed the country is then the easier it is to seek the right Master Franchisee” he said. At the forefront, however, he explained that engaging the customer in such a way that every visit is entertaining needed to be kept constant across all locations. However, it isn’t enough anymore to just be in stock with efficient, pleasant staff.

“We have developed an almost cult-like customer base as the product is bespoke,” he said. “We operate the brand through social media in order to connect the staff to the customer, and we ensure that the product/menus and marketing constantly changes on a weekly basis backed up by our own Shakeaway DJ radio and TV stations. All of these options can be changed to be relevant to one store at a time, at low cost, and in any language.”

Delving deeper into the need for social media platforms, Dickson proclaimed that despite having a national Facebook page, each store had its own as well, which contributed to the store’s unique offering.

Depending on the product area, going abroad to places such as the US could present a challenge. The market could be more sophisticated with huge competition, Dickson said, so unless you have a truly unique offer, the sheer size and capital investment can be daunting.

The US may seem as though it is a good fit culturally with UK brands, he explained, but don’t be fooled as it really is quite different in almost every way. He warned that engaging US partners/staff who can relate what those differences will be – almost by state – is paramount, as is understanding that the rules created within the legal system is quite different to the UK.

“In short, unless you are willing to adapt your offer to the market it is not an easy country to make money in,” he said.

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ABOUT THE EXPERT

Hunter Ruthven was previously editor of Business Advice. He was also the editor of Real Business, the UK's most-read website for entrepreneurs and business leaders at the helm of growing SMEs.

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