Strategic Branding - Branded Chains Vs Chains of Brands

by Paul West published 24th May 2011

As a hospitality consultant that develops restaurant concepts you'd be amused to hear the number of times I've met a new client who assures me that it won't be long before they 'have one of these on every high street'. Whether it's the next big thing in Indian takeaways, Chinese restaurants, cafes or kebab concepts, these entrepreneurs frequently have one clear objective: multi-unit branded roll-out.

Though commendable in ambition there is unfortunately rarely a realistic appraisal of the finance, operational knowledge or key uniqueness's required (and bloody hard work necessary) to roll out even a few units, let alone 200. Of course it is possible to strategically develop a roll-out concept from scratch and there is a process that can be followed to deliver the best chance of success. Business tools such as Competitor Analysis, Gap Analysis, Brand Handshakes, Growth Matrix and the Strategic Ps can all help develop a food service concept that perfectly fills a market niche with a desirable product that significantly meets the needs of select target segments and will work in multi-locations.

It strikes me, however, that I'm yet to come across a client who would like to develop a group or collection of brands across multiple units. Why is that? There are good examples of restaurateurs who have developed chains of brands, the most well known of which is D&D London, previously the Conran group. We work with a hugely successful group in New York, BR Guest Hospitality, who run 19 restaurants across 13 different brands. On a smaller scale but equally effective, restaurant entrepreneur Atique Choudhury, the owner of 250-cover award winning YumYum Thai Restaurant also owns a Mexican restaurant (Mercado), a Japanese restaurant (Oishiii) and is soon to open an Indian restaurant, all within 100 feet of each other in the same area of North London.

How does this strategy work? In the case of Mr. Choudhury, he simply selects gaps in the market within the same geographic location (for ease of operations and because he knows the area inside-out) and develops a concept and brand to fill that gap. Likewise with BR Guest, who strategically develop brands to deliver highly considered and finely tuned concepts for a multitude of cuisine types and market niches in carefully selected locations. Conran did the same when he was building his restaurant empire.

Maybe it's because these restaurant groups grow organically rather than initially planned as multi-unit groups that budding entrepreneurs don't tell us this is what they'd like to do? By starting with one restaurant, making that a success, then moving onto the second and slowly building a group of different brands a restaurateur can develop their operational skills and techniques over time.

I believe it would be a sound approach to develop a group of brands strategically, as a business concept. Using similar tools to those previously mentioned and applying them site specifically would likely work to deliver concepts that are perfectly adapted to meet location-specific needs and gaps in the market on a localised level. Products, pricing, service processes and physical attributes can all be manipulated to perfectly match local market requirements. This is considerably more flexible than branded chains that need to find locations that suit their products, service processes and so on. They are opposite approaches in that respect - one where the location must match the concept, the other where the concept must match the location.

So if you're planning on venturing into the world of multi-unit restaurants, perhaps you should look at the alternative roll-out strategy. If you hold strengths in branding and product development then you may well discover that a group or chain of brands is a more effective and successful approach.

Author : Paul West

Paul West is Managing Director at Ignite Hospitality Consultants and regularly contributes to various hospitality publications.
View Paul's team page...

Tags : Branding | Strategy