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Melbourne, Australia

Food franchises seek bigger slice of market

Australian Franchise News – 14-04-09


AFFORDABLE dining is shaping as the new growth area of franchising as companies worry about the impact of the financial downturn on consumers’ willingness to eat out.
A quarterly review by website reveals growing concern over the slowing economy. Covering 1000 franchisees from 65 franchises across Australia, the results show average ratings by franchisees for most franchise systems are down compared with the previous quarter.
Fast food emporium Souvlakihut, which has trialled a kids-eat-free offer in Victoria and is planning to extend it to other states, kept its top spot in the survey.
Website founder Ian Krawitz also pointed to Souvlakihut’s commitment to high levels of franchisee support as key to maintaining its lead.
The survey comes as Domino’s Pizza adds products to its menu, with tighter household budgets prompting a switch to cheaper food outlets.
The menu includes new pizzas, desserts, dips and, for the first time, a pasta dish. Rival Pizza Hut made a similar move last month.
“We were originally going to bring it out in pieces but with what’s happening around the world economically we thought we would grab the opportunity with two hands,” Domino’s chief executive Don Meij says.
The launch comes after Pizza Hut said in January that it planned to double sales over the next five years by adding pasta to its menu and co-branding the franchise as Pasta Hut. It said the move, which it would test initially in Sydney, was an attempt to regain the top market position in pizzas that it lost eight years ago.
Other findings from the topfranchise survey showed satisfaction ratings for financial services businesses had been hardest hit by a toss of confidence in the economy. Drive-through coffee franchise Muzz Buzz, and women-only gym chain Fernwood Fitness broke into the top 10 franchises for the first time, while gourmet cookie retailer Mrs Fields, Mortgage Choice and ANZ Mobile Lending retained their positions.
Rank – Business Name – Previous rank
1 Souvlakihut (1)
2  Just Better Care (New entry)
3  Car Care (New entry)
4  Snap-On Tools (New entry)
5  Mr Rental (12)
6  Muzz Buzz (13)
7  Mrs Fields (9)
8  Mortgage Choice (7)
9  Fernwood Fitness (11)
10  Anz Mobile Lending (8)