Top Franchise Brands Facing Challenges In The UK

McDonald’s has been struggling with healthy eating concepts for some time in the UK. Five years ago, the company bought a stake in Pret A Manger, the British sandwich chain whose success is built on using the freshest of ingredients. In 2003 McDonald's added salads, sandwiches and fruit to its own menu but suffered further in 2004 when the film Super Size Me was an international hit. Other menu changes have seen the company introduce instant porridge to its breakfast menu and even a dish made from the meat substitute Quorn which was endorsed by the Vegetarian Society. That item is no longer on the menu.

Is it all too little, too late? As marketing manager of a large fast food franchise in the UK over 20 years ago, I recall trialling salads way back then. We had limited success with those first products but no doubt that we needed to persevere. A spicy all-vegetable burger launched around the same time proved to be one of our best product launches ever – perhaps because, in those days, it was sold on the basis of being an exciting new flavour rather than because of any perceived health benefits.

In the intervening years the market has changed dramatically. McDonald’s has lost some of the excitement it first had when it arrived in the UK and has become, in some eyes, the franchise people love to hate. Subway has embraced the ‘healthy eating’ concept with vigour and promoted it with enthusiasm. Now anything that McDonald’s does is inevitably portrayed by the media as an attempt to catch up.

However, as generations of loyal customers will tell you, McDonald’s has never been about the food – it’s about the experience. McDonald’s is fast, convenient, clean, hygienic, safe and family-friendly. Where else can a parent take young kids to make a mess, play and not attract discouraging looks? Nobody else has ever equalled the overall packaging of the McDonald’s experience. Georgie Pie tried to match the architecture and the systems without having the product range or the history. Subway isn’t a “family” restaurant, nor are the pizza franchises. Cobb & Co? Valentines? Not the same thing at all.

Given that huge brand identity, the challenge McDonald’s faces now is subtly to adjust the product mix associated with the brand to meet the demands of a changing market. Can it do it? Frankly, I’d be amazed if it couldn’t. It has the brand power, the muscle and the money to succeed. Providing that it respects its own values and the relationship with its customers, McDonald’s should be able to sell any sort of popular food it chooses.

What happens if it doesn’t? Well, another story out of the UK recently demonstrates what happens when customers feel their brand has betrayed them. Research suggests that satisfaction levels experienced by customers of The Body Shop has slumped by almost half since the sale of the company to French firm L’Oreal was announced. The world’s largest cosmetics producer, L’Oreal has refused to sign a commitment to animal-free testing of its products – an attitude totally at odds to the ‘Beauty Without Cruelty’ campaign championed by The Body Shop’s totemic founder Anita Roddick.

The Body Shop’s customers – traditionally intelligent, well-informed, interested in social issues and often politically active – are unlikely to be convinced by Roddick’s spin that L'Oreal wanted to learn from the Body Shop’s commitment to the environment and human rights in business. Will they vote with their feet and change allegiance to one of the many ‘me-too’ brands The Body Shop has spawned? In many cases, the answer must be yes.

What L’Oreal makes of its $1.9 billion purchase has yet to be seen and will be awaited with interest and probably some trepidation by the company’s franchisees. Like McDonald’s, The Body Shop’s franchisees bought into a brand with strong values – in this case, ethical and social ones. Now their franchisor is a company that was formerly not just a competitor but a declared enemy of their whole philosophy. Expect fireworks and fragmentation as corporate culture meets franchisee feistiness.