Retail Food Group’s success lies in concentrating on its core business, says Executive Chairman Peter George
A successful corporate turnaround partly entails a deep cut into costs and waste, but it also requires identifying and reinforcing the core business. When you get it right, you ensure you have people spending their time on the things that really count: revenues, market share and customer satisfaction.
I have driven this sort of turnaround at PMP Ltd, Nylex and B Digital Ltd, where we returned to core operations and sustainable profits. At RFG, our core business is our eight retail brands and the many franchise partners who operate under them – approximately 700 domestically who employ around They operate under retail brands such as Gloria Jeans, Michel’s Patisserie, Donut King, Crust, Pizza Capers, Brumby’s Bakery, Cafe2U and The Coffee Guy.
Upon becoming Executive Chairman in November 2018, I implemented a strategy that refocused our business on our franchise-partners. They became the over-riding focus of each and every one of our decisions, underpinned by a firm appreciation that we will succeed where our franchise partners succeed.
Successful brands in the retail food space must be continuously supported with strategic planning, training, management advice, HR support, product-training, product innovation and creative marketing, to name a few.
So, over the past 18 months we have initiated around 150 marketing and product campaigns to entice people to our store counters, which have driven at least $30 million in additional network sales.
We have rationalised our head office, building highly-experienced teams with a focus on the financial success of our franchise partners. For instance, when COVID hit in early 2020 we assisted franchise partners by suspending marketing levies, removing minimum service fees, deferred debt-repayments, waived interest and negotiated rental concessions.
We reorganised our eight retail brands into one internal division called IconicCo, where we can better focus on franchise partner support and revenue growth. Our all-important brand system General Managers were also redeployed so they are now directly responsible for the needs of our franchise partners.
We also have a unit for resolving the concerns of multi-site operators, who are the backbone of almost all successful franchise models.
Some regulatory overhang continues for RFG, namely the ACCC’s legal action which concerns allegations that are historical and which occurred under various senior executives who are no longer with the company. These proceedings concern alleged contraventions in relation to the sale or licence of 42 corporate-owned stores as well as management of the marketing funds for a number of our brands, and we intend to defend them.
The other overhang is the pandemic. Normal trading conditions have not yet returned to Australian shopping centres – where our big names such as Donut King and Gloria Jean’s are concentrated – but conditions are improving, and as COVID recedes we are seeing improvements in many of our franchise partners’ stores.
We have more to do but with the restructuring now well underway, and with an influx of quality people into management, we are on a journey to ensure that RFG is not only Australia’s largest multi-brand retail food franchisor, but also the most successful for its franchise partners.
Peter George is the Executive Chairman of Retail Food Group.