Adrian Morrissy

Adrian Morrissy started takeaway food franchise wokinabox in 2002 after a trip to Thailand and has grown the business to a point where it has 37 stores. He explains why franchisees must be willing to work in the business, why franchisors struggle in Melbourne and why the US and UK are great expansion opportunities. 

I know the idea for woxinabox came after a trip to Thailand, but what was your background? Did you have experience in the food sector or did you just sense an opportunity?

No, I really sensed an opportunity. My main background was actually accounting. I studied accounting, I didn’t go on to do my CPA, but I worked in the industry as an accountant for a number of years and also a little bit in marketing. I’d been to Thailand and loved the food and I’d seen some other Asian take away concepts around but knew there was nothing like it in Adelaide. I’d lived in Adelaide for my late school and uni days and I thought I’d go back to Adelaide and give it a go.

Now that decision to jump from a corporate role to a very different industry is one that I entrepreneurs struggle with initially. Was it something you had to think about or were you just ready to make that change?

I thought about it for a while, the decision was probably 12 months in the making and then once I made the decision there was six months of pretty much full time research and planning to make it happen.

Were there any sort of big challenges during that start up period?

I mean I’m sure there were things that I thought were a challenge at the time but it was really something I enjoyed. It was an exciting time and I really enjoyed the process of starting a business from scratch and coming out with all the small details that you have to do when you start a business.

That first store must have been pretty successful. How long did you take before you had the feeling that this was something that you could expand through franchising?

Even before I started I had franchising in the back of my mind as something we could do, obviously it depended on the first store being successful. Look, we were lucky – or whatever it was – but the store was busy from day one. I wouldn’t say I thought ‘ok now let’s franchise from day one’, I thought ‘shit how do we deal with all these customers, improve the systems and get everything working right’ in those first few months. But I guess it was obvious very early that it was successful.

Did you open some more company stores before getting into the franchising area?

Yes, so nine months after we opened the first company store we opened a second company store. With that express idea to open somewhere else, make sure that we can replicate the success and have a chance to build the systems for the business to work without me being there all the time.

And obviously that was pretty successful. How have you found the process of finding franchisees? When we speak to franchisors, the big thing they talk about is finding the right franchisees talent. Has that been an issue?

Finding the right people is always really important and from very early stages when we opened the first store we had people approaching us saying “I like your business, I’m interested in a franchise”. Probably the first 10 of those people we said thanks but no thanks. But it wasn’t really until we had it right, until we had the right person come along, that we went down the franchising track which was 18 months after we opened the first store. So opened the store, nine months later opened a second company store and about nine months later opened the first franchised store.

What are the characteristics that make a good franchisee? What do you look for when you are assessing an application or candidate?

They’ve got to be willing to work in the business. For our business – and I think it’s what franchising is about – it’s is crucial having an owner-operator in the store. If it was as simple as opening the business, putting the name on there and putting some staff in there, we’d go and open 100 company stores ourselves. That model doesn’t work for us so they need be willing to work in the store and the sort of person that’s going to be good as a franchisee is a person who can manage people.

Customer service is a really important part of our business so you want the franchisee to be good with people, good with customers and then good with managing their staff. They need to have a level of passion for the food – we’re a hospitality business so you need to actually enjoy the food part and getting in there, getting your hands dirty, being willing to cook in the store. Not all of our franchisees cook all the time but more and more franchisees cook and that’s really important in maintaining the standard of the food. We’re not a McDonald’s, it’s well systemised but it’s not a factory. You need to stay close to the business to make sure everything’s right.

Have there been any real challenges or mistakes that you might have made? Have they been around selecting the franchisees?

I think probably the number one challenge is early on we thought that the system could run under management and at one stage we had one franchisee that had six stores but that just didn’t work. They didn’t maintain the standards having six stores, it wasn’t good for the brand, they didn’t deliver the same experience to our customers.

So that was quickly wound back?

Yes.

Oer the last 12 months where we’ve seen the economy struggle a little bit, how have you guys found it? I mean a lot of the people in the take away food sector seem to have come through pretty well.

We’ve come through reasonably well. We have dropped marginally. We’re not in the cheap take away, fast food market. We’re in a bit more premium take away market. So I think we haven’t had the boost that some others have had but we’ve maintained.

According to the BRW’s franchise list was about $16 million in 2007-08. Did you grow a little bit in 2008-09?

No, it was slightly less in the following year.

One move you did make was to introduce a range of sort of value meals which is something we’ve seen a lot of fast food guys do now. Was that pretty successful?

Yes they gave us a boost for the time that we were promoting those products. But we can’t play in that market very well and we can’t play for a long time. So we’re now focusing on our next campaign that will be starting in a couple of weeks is really about our core menu and making sure that people are seeing the value in our core menu.

Have you been able to sort of unwind those, I think they were $4.95 meals. Are they gone from the menu or how are you playing that?

We had four of them and we’ve taken them back to two. So two of the more popular ones we’ve kept on the menu and de-emphasised those.

Now you’ve got an interesting geographic mix in that you’re not in Victoria and New South Wales. Are they markets that you’d like to get into or has that been a purposeful strategy to concentrate on the South Australia, Queensland, ACT and Western Australia I think?

Yes, purposefully we sort of go to one state at a time. If we’ve got stores spread everywhere, we can’t support them as well. The exception is Mackay in Queensland we’ve been there a while. Even if we’ve got someone based in Brisbane, we’re not going to be close to Mackay, it’s still 600 kilometres away. Similar to ACT, we’re never going to have a physical presence in ACT so we’ll always be supporting those sites remotely and those sites can still effectively market in those areas. But if we were to have one store in Sydney or two stores in Sydney or even probably 10 stores in Sydney, it would be very difficult to market and support them.

So we want to go into those markets when we’ve got enough size to put more into it. With Victoria – this is probably another challenge we had which is so long in the past that we’ve forgotten about it – we did open three stores in Victoria about five years ago and we quickly found that market wasn’t working well for us and as good as things were elsewhere, so we made a decision to pull out of the market and focus on where the going’s good.

What was the issue in Victoria, we’re down here and there’s quite a love of Asian food I thought?

There’s a whole of reasons that we can come up with but I think the main one that we can come up with is that in Melbourne there is such a large amount of good quality, cheap Asian food, not just Asian food but food in general. I think people are less drawn to the franchise option.

I think you see it in pizza, the pizza franchises have struggled in Melbourne and even in our industry, Noodle Box are our largest, most direct competitor their head office is in Melbourne and I don’t know their exact numbers but they’ve got something like 10-15 stores in Melbourne, but they’ve got 40 plus stores in Queensland. So I think that’s pretty good evidence that our most direct competitor they’ve also found it harder in Melbourne.

That’s interesting. I know you’re thinking of looking into overseas expansion in the US and UK. Is that something you could do before filling out your Australian footprint?

It is. We know we’ve got a lot of room to grow in Australia but there are some really good opportunities in those sorts of markets and I think being first to market is fairly important. We’re aware of a couple of other competitors in those markets but not a lot as yet and they’re obviously very big opportunities. So we’d like to get there and make an impact before anyone else does.

Fair enough. Can you give us a feel for the franchising outlook for this year? One thing we expected last year was that more redundancies would flow through to more franchising candidates but it didn’t quite work that way. What’s your feeling on franchisee enquiry this year?

We’ve definitely had an increase in inquiries. Over the last 12 months we’ve had more sales of existing stores than we’ve previously had but we’ve had less opening of new stores. So I think that’s an indicator that people have been less likely to take that risk on a greenfield site but people are still willing to invest where people see a business that’s already performing.

Going forward I think it’s just a confidence thing – as people get more confident, they’ll see we’ve come through the downturn and the business is still there and it’s still performing that we’ll get more new stores happening.