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Comeback kings: When is the right choice to invest a brand returning to the UK?

Comeback kings: When is the right choice to invest a brand returning to the UK?

With international franchise giants like Wendy’s, Little Caesars, and Häagen-Dazs back in the UK, there’s a golden chance for savvy franchisees to hop on a global success train

Franchising contributes more than £17 billion a year to our nation’s economy, via 900+ franchise systems and a sprawling network of 48,000 outlets employing a workforce of over 700,000 individuals. These numbers keep rising, highlighting just how big a role franchised outlets play in shaping our town centres, retail hubs, and industrial parks, particularly when those brands come with a 24-karat global status.

Think about it – every time you stroll past a McDonald’s, hit the gym at Anytime Fitness, or grab your daily brew at Costa, you’re witnessing the impact of these global names on millions of people’s daily lives. They don’t just draw in crowds; they create jobs and keep local economies buzzing. And let’s not forget the democratisation of business ownership that comes with franchising a global brand. It’s like giving a small-town player a shot at the Premier League.

“When it comes to choosing a franchise, one simply can’t overlook the allure of a worldwide presence,” explains Phil Mowat, managing consultant at Ashton Franchise Consulting. “There’s a certain je ne sais quoi that comes with aligning yourself with a huge international name. These brands have already established trust, admiration, and a loyal following on a world stage, which can work wonders in helping to build credibility and trust in your local market.”

Why would global brands ever leave?

Successful international expansion into the UK market demands meticulous planning, strategic foresight, and a keen understanding of local nuances on the franchisor’s part – and even global brands can get it wrong. When the North American electronics retailer Best Buy teamed up with Carphone Warehouse its ambitious expansion plans in the UK failed to ignite, and US consumers gave British supermarket giant Tesco the heave-ho when it tried to export its winning formula to America.

Franchise giants like Wendy’s, Little Caesars, Wimpy, and Chick-fil-A have also previously bowed out of the UK due to market pressures, which could be seen as a potential red flag for
British investors. However, these brands have all been confident in making a return, and a thriving QSR landscape combined with accumulated experience could enable them to avoid an uncomfortable attack of deja vu. For franchisees with ambition to scale, these returning brands are worth serious consideration.

For example, Little Caesars’ initial foray into the UK in 1985 failed to replicate the triumphant growth experienced in its homeland. Grievances over the US franchisor’s communication and support reportedly emerged and the brand failed to resonate with its British consumer base, causing tensions between franchisees and the US-based HQ to escalate until the last UK outlet of Little Caesars closed in 2000.

Fast forward more than two decades, and a Little Caesars UK ‘second coming’ is a pivotal moment in the pizza brand’s revitalised international expansion strategy. Demonstrating a focused commitment to learning from past mistakes, the company has established a dedicated international team to provide comprehensive support to franchise partners. The next
phase of growth is backed by advancements in technology and ongoing innovation, as well as customers doubling down on value for money.

“Given the backdrop of the cost-of-living crisis in the UK, we’ve realised there’s a distinct appetite for a value-first offering which doesn’t compromise on quality or fresh ingredients,” says Carlos Vidal, global franchise development and operations senior executive.

Rajan and Jas Sandhu, franchisees for Little Caesars Greenford, opened the first ever site for London and the south, viewing the arrival of the brand as an exciting opportunity to
offer their local community top-quality ‘Hot-N-Ready’ pizzas starting at £5. “The enthusiastic response from our customers has been overwhelming,” they say.

Little Caesars is now embracing a rapid growth approach by seeking franchisees who are interested in establishing 20 or more units within an initial five-year timeframe – presenting an opportunity for multi-unit operators.

Why are they coming back?

While Little Caesars and Chick-fil-A (the US burger brand which withdrew from the UK four years ago following boycotts) may have changed their corporate strategies to strengthen relationships with customers and franchisees, the main reason why many international franchises are returning now is simply due to improved market conditions.

Wendy’s – the third largest burger chain in the world – returned to the UK in 2021 after a 20-year hiatus. It was armed with an Uber Eats delivery deal and a goal to open 400 outlets. Wendy’s originally left the UK citing high operating costs and overheads as the reason for exit.

However, it is now the springboard location for the brand’s Europe-wide expansion plan, thanks (in part) to a huge national trend for burgers and takeaways as well as new-and-improved infrastructure, including a strong team on the ground and established key partnerships.

“A lot has changed over the past few decades, and we’ve learned so much since we returned to the UK in 2021,” says Michael Clarke, managing director of Europe. “This time around, we’re using a company-owned franchising model to lead by example, help build brand awareness, and ensure we’re executing our high brand standards to help us scale quickly and grow our presence in the right way. To date, we’ve, opened over 30 locations and have a strong pipeline for 2024 and beyond.”

For Wendy’s multi-unit franchisee operator, NFH Restaurants, the menu’s focus on fresh was an immediate advantage and key differentiator from QSR competitors. “Wendy’s had all the qualities we look for when selecting partners to add to our portfolio: an international brand, the freshest ingredients, the ability to scale and grow, a commitment to invest and great marketing potential,” says Faisal Jamal, NFH Restaurants’ managing director.

Despite being absent for so long from the UK market, Wendy’s is still instantly recognisable due to its worldwide presence. “Our recent restaurant openings have seen customers lining up to try Wendy’s for the first time, or to revisit a brand they know and love. The strength of the brand has been a huge advantage, enabling us to attract customers quickly as well as gain access to great new talent,” continues Jamal, who’s in talks to increase his commitment to Wendy’s growth in the UK.

“The support from the company team is great, and they are always on hand to offer directional guidance, be it construction, supply chain, or operations related. It really does feel like all of us are working together with the goal of making Wendy’s a success in the UK,” he adds, highlighting an approach that’s been proven time and time again to succeed in franchise expansions.

Getting the timing right

Capitalising on British love for luxury ice cream and recognising significant untapped potential in the UK market, Häagen-Dazs is making a return to Greater London, having recently announced big plans to open at least 25 outlets in the next five years. The ice cream icon closed its last permanent branch in 2015 but has since tested the water with a pop-up in John Lewis’ flagship Oxford Street store, enabling the brand to gain crucial insights into a resurgence of consumer demand for luxury desserts.

“The success and extended duration of the pop-up store re-affirmed a clear appetite for Häagen-Dazs,” says Aurélie Lory, global managing director at Häagen-Dazs Shops. “By observing flavour rankings, analysing consumer feedback, and monitoring Google reviews, we were able to get a deeper understanding of what resonates with UK consumers. What’s more, we witnessed first-hand the importance of offering a comprehensive dessert experience where customers could enjoy a leisurely sit-down experience with a coffee and pastry.

“Through consumer studies, we have also found that there is a genuine appetite and demand among UK consumers for Häagen-Dazs shops in this territory,” she continues. “The post-COVID landscape has seen a resurgence in OOH consumption, with the snacking and indulgent ‘treat’ category experiencing significant growth. Consumers are once again seeking out indulgent experiences, including premium ice cream treats, so the time is ripe for expansion. Häagen-Dazs, with its strong brand recognition and reputation in the UK, is well-positioned to meet
this demand.”

This presents a real opportunity for entrepreneurs, but for now those operating outside the capital will have to wait. While the brand remains open to expanding into other cities in the future, primary focus is on re-establishing a presence in London.

“We believe that by concentrating our efforts on this key market, we’ll be able to gauge the success of our reintroduction and finetune our approach, building a strong foundation for
future expansion,” explains Lory – showing a reassuringly thorough strategy aimed to inspire confidence from franchisees who might be reticent after the brand’s previous departure.

“We’re carefully evaluating potential multi-unit franchisees based on a set of criteria and qualities that align with our brand values and objectives. It’s crucial they demonstrate a genuine passion for the Häagen-Dazs brand, as well strong operational skills managing multiple units, relevant experience in the retail and food service industries as well as being familiar with the London landscape as we have learned to lean heavily on local expertise when it comes to pinpointing the ideal locations for our shops.”

Buying into something big

The thrill of being part of something bigger, something grander than oneself, is a compelling reason to partner with an internationally popular brand like Häagen-Dazs. “Aligning with a globally recognised franchise can inject a sense of pride and purpose, knowing you’re contributing to a brand’s global success story while also carving out your own path to prosperity,” says managing consultant, Phil Mowat.

He adds that the UK holds a certain charm for international franchises, being a bustling hub of commerce, innovation, and diverse consumer preferences, as well as having an established legal framework and strategic geographical location.

“Established international brands tend to be at the forefront of industry trends and technological advancements, equipped with robust systems, tried-and-tested operational procedures, and comprehensive training programmes – a godsend for franchisees who need to hit the ground running and navigate the complexities of running a business with confidence.”

By partnering with an international brand that’s been to the UK before, you’re buying into a mature system that’s already weathered previous storms, gained valuable experience in
navigating the unique market and learned from past lessons in building a growth strategy that’s both robust and secure. It surely is a win-win situation.

Do your due diligence

Consultant Phil Mowat on the checklist franchisees should follow when navigating a potential partnership with a returning franchisor.

  • Enquire about the franchisor’s international performance over the years. What have been the hiccups and successes, and how has it weathered various market conditions?
  • Ask the right questions: What’s the current state of the franchise network? Are there any ongoing legal or financial matters?
  • Conduct thorough due diligence from your end – examining financial statements, franchise agreements, and of course, speaking with existing franchisees to get a sense of their experiences.

Words by: Charlotte Smith

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