Posted:20-July-2023
Dean Haynes Interview - "All Things Franchising"
What’s the percentage of the current wage bill and how are you keeping it down but still being able to deal with the volume?
We are currently running the wage bill at roughly around 12-13% (excluding myself), we are outsourcing all of our drivers and this isn’t included within the wage bill. I am taking up the majority of the hours myself as this is an owner-operated store. The model works so well with a low labour line, we introduce people on peak times on part and full time contracts especially whilst we are building our business and our reputation.
We are keeping the wage bill down due to the level of training and introducing highly skilled staff. We have managed to source staff within the industry that are experienced and willing to adapt to our style and how we want to run our business. We have also found a few gems with no background or experience within the industry and our simplified systems have allowed them to adapt so easily. It also helps me being involved within the business so heavily as I am working as many hours as I possibly can and I also communicate the rationale of why we need to hit certain metrics within the business, its part of the leadership skills I have picked up on my professional journey within McDonalds.
What are you currently running food cost at? What measures have you brought into place to lower food cost?
We are running waste at sub 5% and I think we can be better, we also have brought some actual procedures and processes into place around waste management, we are now tracking every single item that’s thrown away and were educating the staff on the importance of waste. Bek’s as a business cook in batches to deal with order volumes but I also noticed that we need to look at off peak and peak times to ensure we control waste whilst still providing great service and truly being a quick service restaurant. We have had to change a couple of key suppliers already on our journey and I have worked side by side with the franchisor in getting the best of the best within the industry, from my background and industry experience, quality control is so important to waste.
How are you managing to keep your operating profit margins so high?
We are having some real challenges in the current market, most recently we have seen potato prices increase to over 200% of its usual price as it’s just that time of the year but we are expecting prices to return to normality soon and our margins on potato return to its normal GP, considering potatoes form 75% of our menu items, this has put some real strain on the business on top of all the other challenges that every single food franchise is facing. The business also allows leeway as its franchise structure supports the franchisee, I constantly scrutinise the P&L and I always look at the labour line and food cost which are the ones that are within our remit, I would call those ‘the controlables’. Sales is always number one within any food business however these metrics always have to monitored and they are numbers that we can control within reason as a business.
How have you found working with Bek’s supply chain? What changes have been made since you started.
The business is ruthless around quality standards and we are not scared to walk away from existing relationships, we demand extremely high standards and service from all of our supply chain. We are consistently pushing costs on to customers due to inflation and were asking customers to part way with their hard-earned money so we make that transparent to our supply chain. We do not get any second chances on the front line and our supply chain reflects us in every single way. Having said this the operations are very streamlined and we have just implemented some processes to make it even easier when dealing with our key suppliers. The business reminds me very much of McDonalds where I spent time within quality control on how its constantly pushing the supply chain to deliver the best standards and challenging in every single way for the better of the Bek’s business. We have some real quality suppliers and some great relationships but were also not scared to challenge and push back.
What’s the average customer order value? Why do you think these are so high?
The average order value ranges between £17-£20 instore and around £25-£30 on delivery as our delivery platforms have an uplift to prices within store for obvious reasons, we still class ourselves as an affordable and enjoyable food outlet. Gone are the days of the old chippy prices and sometimes this can burden us, we are now a quick service restaurant with operating costs the same as any other major franchises. The economy has changed so much and we’ve just brought Bek’s into line with other fast-food restaurants whereas most chippies throughout the UK have struggled to invest and evolve with the times.
We have also created digital processes and tech such as the kiosks where customers are putting through a bigger average order value. We also have a lot of up selling through the technology and through training staff where items can be turned into a meal or go large or even add sides. I think the tech within the company even at the early stages are so far advanced.
What makes the business such a solid investment?
The business model makes money from the get go at day one, everybody in the UK loves a chippy, its embedded within our culture and its so easy to market. We have a real unique selling point in the battered chip and we have so many great systems and operations in place. Before investing in Bek’s I had done a lot of financial analysis on the business and its poses a real attractive offer with a lower risk compared to other up and coming franchises on the market. The figures have been impressive and the metrics are very achievable for any franchisee, that being said the business still needs the right franchisee to join The Bek’s family and the business isn’t scared to turn away applicants at the interview stage in comparison to other growing early-stage franchisees.
How’s the Bek’s franchisee model structured to myself?
I am currently on a retainer model against a turnover based model, on my current sales if was on a turnover model I would be paying a lot more than I am now in royalties to the business. It allows us to generate more cash within the business and I want to be a multi-site operator so it’s a win-win. If anything, its also really aiding us as well whilst the economy is so turbulent, I see it as a rent, I like things fixed and I plan to do a lot of sales, so the model works fantastically for me and is almost an uncapped incentive. I have seen a lot of overseas food models try to work within the UK and they just aren’t prepared for the UK market, we have things such as 20% on food for VAT and also our operating costs tend to be a lot higher, so this really does work for me as a franchise.
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