Bread and butter man

Having established the O'Briens Irish sandwich bar concept as a recognised brand, Mr Brody Sweeney acknowledges that the success of further development will be determined by his ability to deal with the bread and butter issue of managing future change.

"All things being equal there is no reason to think we can't expand to be a major Irish brand around the world. The challenge now is to manage that change," says the founder of the franchise operation that now operates in six countries and has plans to double the size of its business every year.

O'Briens achieved 70 per cent growth in the number of outlets it operates in 1998 and expects a further 80 per cent in the current year. This means that for the first time, the number of sandwich bars abroad - at 32 - will exceed the number here (27), with new openings in locations ranging from Germany and Britain to Singapore, Chicago and Cairns in Australia.

Although the company is already highly successful by Irish standards, 38-year-old Mr Sweeney has no plans to put his feet up yet.

He explains the different definitions of success in the franchising business.

In Ireland the critical mass in franchising is around 25 shops, while in Britain you need about 250 outlets, and in global terms, Mr Sweeney says, the bigger franchise operations open two or three hundred outlets a year. "So we are a small operation with plans to become a medium size business worldwide," he says.

When the critical mass is achieved in franchising, the operation involved gets more for its money from marketing the brand. This boosts business for the franchisees and ultimately the return to the overall corporate entity.

With this in mind Mr Sweeney has taken the venture capital route for the next stage of O'Briens development by selling 20 per cent of the company for £1 million (€1.27 million) to ICC, earlier this year.

"When I first went to ICC I had three shops and they told me to take a run and jump. Later they came back to me when I had 30 shops," says Mr Sweeney. ICC are buying brand-value, and like with the high-tech companies venture capitalists are buying into, they are chasing the fast growth values available in the sector which contributes to the return on their investment when they exit the company in five or 10 years time, he adds.

The £1 million was invested in bolstering the management team with new specialised personnel for the next phase of development, including a director from ICC, and continuing the marketing programme.

Mr Sweeney says the company now has the skills on the board to bring it to the next stage of development - expansion into other markets while seeking to maintain existing quality standards across the board. Mr Sweeney admits his personal challenge is to see whether he is more than an "entrepreneur - an ideas man" or can he "manage the growth successfully".

O'Briens uses well-known specialist Irish producers to supply it with food products, such as Derina Allen's Ballymaloe relish and Lily O'Briens hand made chocolates from Kildare which, Mr Sweeney says, "complement the ambience of the O'Briens concept", and ensure a consistency of product across the franchise.

Although he believes he has developed a positive modern image of Ireland - without the kitsch of the leprechaun - through the atmosphere and design of the outlets, he slightly rues the fact that he did not think a little harder about choosing the name, O'Briens.

"We have 11 law firms copyrighting our brands around the world at present, and this is not made any easier by having a family name - O'Briens - as part of our corporate identity."

Up to now the rapid growth of the business has been based on a variety of factors; the economic boom has played no small part in its success as has the Irish pub phenomenon abroad; there has also been an exponential growth in the sandwich/coffee bar sector worldwide and O'Briens own branding has played its part in making it one of the better-known high street outlets.

"Every time we open a new sandwich shop, we find the turnover increases in existing shops by 2 per cent or 3 per cent," says Mr Sweeney.

It has taken O'Briens several years to achieve this critical mass in the Irish market. Mr Sweeney opened his first O'Briens, learning and perfecting the business, on George's Street, in Dublin in 1988. It was not until 1994 that "our first franchise partner came on board" in Ireland, and the next year an O'Briens opened up in Britain.

He had his first experience with franchising when he launched the Prontaprint concept in Ireland in 1981, backed by his father. He says that this experience taught him about marketing the relatively new (franchise) concept in Ireland and "what not to do in business".

Notwithstanding a hitch in the franchise agreements which allowed franchisees to opt out, Mr Sweeney sold the 19 Prontaprint outlets he helped build up, North and South, between 1981 and 1988, back to the British parent without making a loss.

O'Briens has an annual turnover of £14 million and operates on a break even basis, says Mr Sweeney. Any residual money made by the 100 per cent Irish owned company is used for reinvestment. Its income stream arises from the 9 per cent of sales, after VAT, it receives from the franchisees.

The franchise model is that you put one third of this back into marketing support, one third into management and the remainder is profit, he says.

Currently, he says, the company is experiencing two major barriers to growth in Ireland, and particularly in Dublin; availability of good quality properties, and, on a day-to-day basis, acquiring staff.

He concedes that the company has invested heavily in reducing staff turnover over the last year, with some success, "but we could still hire 50 staff tomorrow if we could get them", he says.

Although O'Briens is experiencing critical shortages in these areas, like many other companies, Mr Sweeney can take some comfort from the fact that early on in his business experience he identified the need to export. This occurred through his recognition that the Irish market was not big enough to sustain the Prontaprint franchise and that expansion into Britain was always a probability.

In September O'Briens signed a deal with Select Service Partner (SSP), a member of the worldwide Compass group, which employs 170,000 people in the food and catering industry.

Becoming a part of its "bread offer" portfolio is at once "recognition of the success of our branding", he says, and also a great opportunity to meet our expansion plans in Britain.

Compass own 40 per cent of all food outlets in British airports and 80 per cent of food outlets in railway stations there. Part of its British portfolio includes Burger King (UK), of which it is the largest operator, and Pizza Hut franchisees.

O'Briens has also signed a deal worth £3 million with an Australian partner which is expected to see three new shops open there before Christmas, and 30 over five years.

As Mr Sweeney says about franchising, "It's a numbers game".