INTHEBLACK October/November 2024 - Magazine - Page 35
THREE TIPS FOR FRANCHISING SUCCESS
Franchising is at the heart of Secret Recipe’s growth
strategy, with franchisees running about half of
the 380 Malaysian stores and all the international
outlets. Patrick Sim CPA offers three tips for
successful franchising.
1. Get the core business right first. Before trying to
establish franchise outlets, detect and address any
weaknesses in the business format, otherwise you
risk expanding with a flawed model.
2. Create a business model that is easy to replicate. For
Secret Recipe, this means all products are baked in a
master kitchen, so that ready-made food and cakes
can be sent to the stores. This allows franchisees to
concentrate on store operation.
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3. Keep investing in the model. Ongoing investment in
the business model is important because, without it,
a franchised brand can start to go downhill, leading
to larger problems.
advertising and social media, so we have
to make sure we target the right platforms
and that our brand does not become old.”
That means having a presence on TikTok
and other Gen Z and millennial-dominated
sites, and forging partnerships with the likes
of potato chip brand Lay’s and music label
Universal Music Malaysia to collaborate on
food and promotional campaigns.
“It is not just about what we do, but
how we pair and collaborate with different
partners within the industry,” Sim says.
RISE TO THE CHALLENGE
Despite its strengths, Secret Recipe faces
undeniable challenges.
A post-pandemic surge in trade has slowed
due to inflation hikes, cost-of-living pressures
and higher costs for dairy imports from
Australia and New Zealand, which have put
the squeeze on margins.
A company with more than two decades in
business comes with inevitable infrastructure
legacy issues that management is seeking to
address, Sim adds.
Getting older employees up to speed on
digitisation strategies can also take time. “We
are spending time on training and working
on mindsets,” he says.
“Changing culture is a big challenge, so you
have to continuously drive and communicate
and emphasise these things with the team.”
As he navigates myriad market threats, Sim
will keep putting his CPA training to good
effect to improve the business’s outlook.
He has ramped up Secret Recipe’s
business-to-business ventures, which include
supplying cakes to major international brands
such as McDonald’s, Starbucks and Ikea.
Expansion into additional overseas markets
– such as the Philippines, Türkiye and the
Middle East – is also on the agenda.
Perhaps most importantly, Sim and his
team will continue to reinvent the menu
to cater to new customers – red velvet and
sweet potato are among the latest cake
offerings – while continuing to dish out
some perennial favourites.
“I love the Hokkaido triple chocolate
cake. You cannot go wrong with chocolate.” ■
intheblack.cpaaustralia.com.au 35
