Franchising wasn’t always on the cards for Melbourne’s cult burger brand, Huxtaburger, but continued growth precipitated the search for a new business model that will ensure the brand’s success continues in the future. Written by Danielle Bowling, Editor of Hospitality Magazine.
When the first Huxtaburger venue opened across the road from hatted restaurant Huxtable – the first venture from founders Daniel Wilson, Dante Ruaine and Jeff Wong – franchising wasn’t part of the plan. Initially it was a case of operating a burger joint with the idea of opening a couple more. Fast forward five years and five venues, and the brand’s growth has been so phenomenal that a new approach was needed.
“The demand for Huxtaburgers and the growth of the casual space have driven the expansion so far. When I entered the business 12 months ago we had just opened the Eastland location. Considerable investment went into that venue. We had to ask: how do we actually obtain enough capital to keep growing the business?” said Huxtaburger’s general manager Matt Fickling.
“There were a few options for growth. We could have licensed the brand and had people operate it. We could have looked for investors, or we could have obtained our own capital, which can obviously be really expensive,” said Fickling.
“The franchise model seemed the best to us for a number of reasons. It’s a lot easier to obtain capital. You gain access to talent – it provides an incentive to find people who are passionate about owning their own business, which alleviates HR issues. It also makes it easier to maintain the brand because the executive team and board can focus on big picture strategies, rather than the day-to-day tasks of running a store. We can navigate the brand through the growth period and grow more responsibly.”
Although franchising can mitigate a number of issues associated with operating multiple venues, a solid foundation is required to ensure a robust business structure.
“What we’ve been doing over the last year is consolidating everything. We’ve been looking at branded marketing, the supply chain and operations procedures; consistency will come from the fact that we’ve developed really robust standard operating procedures. Over the last 12 months we’ve built a really strong organisational structure. At a macro-level, we have a head of marketing, a head of supply, and a finance manager, and then on a micro-level we have a really strong team of corporate store managers and a regional manager. Every franchisee will be assigned a regional operations manager, and their focus will be on training, development and executing those operating procedures on the frontline,” said Fickling.
And it won’t be a case of letting anyone with money buy into a franchise. Maintaining consistency means protecting the brand and culture that the ‘Huxtaboys’ have worked hard to develop. Fickling said the application process, which will be overseen by franchising partners DC Strategy, is long. So, while a national presence is very much the aim – we’ll open our 50th store in five years, said Fickling – don’t expect to see an explosion of Huxtaburgers across the country overnight.
Huxtaburger’s food credentials are behind its initial success and will be protected by the continued use of the propriety products developed by food director Daniel Wilson, careful selection of local suppliers for fresh produce and analysis of each new market.
“Victoria will be the focus for the next two years. We really want to have a strong presence in that market before we start expanding. If we go into Sydney in a couple of years’ time we will open a considerable amount of stores. We want to have huge market penetration wherever we go. We want our franchisees to be successful. Brand presence and momentum play a huge role in that and it’s easier for us to service,” said Fickling.
“We could plonk a store in Perth and it could be profitable, but if we don’t do it properly people won’t get the same service as our stores in Melbourne. We’ll grow one market at a time and we won’t grow for growth’s sake, but by the end of 2021 we do see ourselves having a store network in excess of 50.”