Can Tiffinbites curries take on McDonalds?
Friday, April 25, 2008
by Tom White
You’re probably familiar with the franchise concept: the UK high street is crowded with Costas, Prets and McDonalds – outlets often owned by individuals who pay to operate under a recognised trade name. But there’s a spicy new kid on the block in the form of upstart Tiffinbites. Can they find success as a national chain selling curry based dishes?
Tiffinbites hopes to create 50 potential franchises throughout Britain by the end of 2009. For a fee of £150,000 plus a share of profits, franchisees get prepared food from a central kitchen which they reheat in store. As with most franchises, they also get full marketing and training support as part of the package. One of the Tiffinbites directors, Arjun Varma, is quoted by the BBC: “We are aiming for the young entrepreneurs who want to get into the Indian food industry. Rather than taking on a family-run scenario, they can have a professionally-backed franchise, which they would then build into two or three restaurants depending on their appetite”.
But some marketing and branding experts are not so sure. The traditional Indian restaurant is a family-run business offering authentic home recipes on the menu, something that would be lost in a franchise. Although the firm would enjoy some economies of scale, it could all become rather impersonal and unoriginal.
The Indian food sector has come a long way in the last 40 years, sometimes topping polls as the nation’s favourite food. But the Home Office’s recent clampdown on all non-EU immigration is taking its toll on the ethnic food sector. Family businesses struggle to get the staff. Perhaps the modern franchise format has come at the right time to secure the future of the British curry.
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Comments
There’s an industrial economics article in the current edition of Economic Review which covers principal-agent problems with regards to franchises and private ownership which might be worth considering. However the first thing I thought of is to what extent would Tiffinbites actually be in direct competition with McDonalds? The website declares itself to be a fast food outlet but curries and Indian food in general aren’t really regarded to be fast food. The major advantage of McDonalds etc. is that one can pick something up, take it away and eat it on the go. That doesn’t really apply here.
Secondly, I took a look at the menu and the price range is a lot higher than traditional burger joints, which suggests that it’s aimed at a richer clientèle. I think the competition for Tiffinbites is mostly other curry houses. Personally I think franchising in curry houses is an innovative but ultimately unsuccessful idea (much like Giuliani’s campaign then) and I wouldn’t personally invest in their shares. That said, I noticed that there is an outlet open near St. Paul’s so I’ll be sure to visit. For research purposes only, of course.
Posted by on 04/27 at 12:14 PM
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