Low outlay attracts Nosh franchise interest

5:00 AM Saturday November 26, 2016 Paul Charman

TV shows have helped Nosh by fuelling interest in high-end ingredients.

ABC Business Sales brokers Daren Leng and Peter Nola have fielded calls from enthusiastic foodies interested in purchasing Nosh franchise operations at Matakana, Ponsonby, Glen Innes, Mt Eden, Greenlane and Pakuranga.

“As you’d expect, we’re getting calls from folk who see a rare opportunity of running an established gourmet grocery business with a strong brand,” says Leng.

“People are attracted by the prospect of owning a well-fitted-out premises, with established business, starting from as low as $400,000, plus stock of about $125,00.

“A total outlay starting from about $525,000 to own a Nosh store is remarkably low, when we’re talking about a high-end branded store in the fast-growing gourmet food sector, a business with excellent support provided from the franchisor.”

Leng believes that franchisees — who can purchase one or more of the stores on the market — will be able to indulge their passion, “by concentrating on the food side of the business”.

“All the advertising and promotion, buying power and additional head office functions will be taken care of for them by the franchisor, just as you’d expect them to be.”

He points out that, having already franchised its Mairangi Bay and Mt Maunganui stores, the NZX-listed Veritas has good reason to believe additional Auckland-based Nosh franchise operations will succeed.

“Mairangi Bay and the Mount are out-performing the company-owned stores, in terms of Key Performance Indicators (KPIs), proving once again that having an operation run by a motivated operator with skin in the game is a winning formula.

“When a passionate owner-operator is there watching every cost and making sure sales happen, they’re likely run the business more efficiently and offer above and beyond service levels.

“The long accepted principles of franchising have already proved themselves in this industry, especially since the Nosh stores already have the right products and the right locations.”

Leng ticks off some “compelling points”, including excellent design values, layout and fit-out; trained staff, who in many cases possess strong backgrounds in the food business; a supply network delivering fresh high-quality produce and products daily. There’s also the established public profile, providing goodwill and customer loyalty across the wide catchment of those frequenting Nosh stores, he says.

Low res Nosh Pakuranga.jpg

Nosh Pakuranga is among the six stores for sale.

“Basic elements are all in place at these stores — all that is missing is the presence of an owner-operator who can add their own flair and ambition,” says Leng.

He believes the high-end grocery business is one whose time has come — a phenomenon now fuelled by popular TV cooking shows like MasterChef and My Kitchen Rules.

Quoting Statistics New Zealand, Leng says New Zealanders seem to be spending more on groceries than ever: about $20 billion a year, a 10 per cent increase, year-on-year, in the three months to the end of June.

Sector growth is exceeding both inflation and the natural population increase, he says.

“The high-quality end of the market is an obvious stimulant, forcing some supermarkets to compete with premium food retailers like Nosh.”

Within that overall context, value for money is still a factor, as is locally grown Kiwi produce and ethical considerations, including health and wellness, fair trade, organic or free-range products.

Immigration is another driver in the market, with a wider than ever range of tastes out there, says Leng.

“There is a huge following of cooking shows, while new immigrants and cultures are bringing in new foods and new ways of doing things. People are also more keen to experiment.”

“Nosh is New Zealand-owned and operated and well recognised in the area of the market,” says Leng.

Food giving customers pleasure and satisfaction is the goal; Nosh has an exclusive distribution arrangement with leading UK grocer Waitrose and a wide range of international food products, including lines from chefs such as Heston Blumenthal and Delia Smith.

“We’re seeking franchisees who will fit in with the Nosh brand and values, plus have sufficient capital to fund and run the business. They must have a passion for food and, ideally, retail experience.”

Leng says franchisees can expect head office to take care of all supply arrangements (including pricing, trading terms, logistics and promotions); branded and private label products to boost customer loyalty. Head office would also handle marketing and advertising; point of sale and back-office systems; ongoing business and systems support; product sales benchmarking information; training support and operating manuals.