Ali Baba. The Recession Proof Franchise!
How Ali Baba ensures its 60 franchised restaurants continue to grow their bottom line in periods of economic downturn and maintains an affordable low entry cost of $250K (vs. competitors at up to $500K). 
 
 
Australia’s largest kebab and wrap chain are celebrating success in the face of economic adversity. The 30 year franchise operation openly discusses its strategies and franchisor determination to improve the probabilities of success for their franchisees over the next 18 months by focusing on the BIG 5: 
 
 
1. Keeping Franchisor – Franchisee Relationships Engaged  
 
Ali Baba has implemented additional communication forums with their franchisees, including road shows, additional Franchise Advisory Council meetings and internal communications to strengthen the knowledge and sharing of information across the group. Ali Baba understands the best ideas and operational advancements come from within the franchise network and have developed effective feedback strategies throughout the organisation. 
 
Fred Rouady, a valuable Ali Baba franchisee stated the following: 
 
“I am very lucky to be part of the Ali Baba franchise system during this period in the economic cycle.  
 
I have been a franchisee for 13 years and am financially involved in 10 Ali Baba restaurants at present. Other franchisees also own multiple Ali Baba restaurants and are sharing in the benefits. I enjoy being part of the ‘family franchise’ and the access I have to key support personnel at all times to discuss any concerns or visionary concepts. I have found Ali Baba a very simple operation and it can make you excellent returns.  
 
Ali Baba has helped me add value to the franchise business model by being involved personally in the ‘value for money’ menu trial and in the new product development launch included in the menu range.  
 
Ali Baba is guaranteed restaurant quality mediterranean cuisine and I am proud that the taste sensation is offered conveniently to Australians”. 
 
 
 
2. Critical points of difference & leadership values in the kebab and wrap sandwich category: 
 
Ali Baba established its $10 million World Class Executive Kitchen (WCEK) in 2005; where franchises receive 95% of their products through a high emphasis on quality management system. By enhancing the quality charter of the inputs of the WCEK, Ali Baba franchises are confident they are receiving 100% natural and preservative free ingredients as well as supporting Australian farmers and growers. The WCEK has the capacity to supply 400 Ali Baba restaurants. 
 
The unique conveyor toaster system at Ali Baba has also been enhanced to ensure customers receive the brand promise of a restaurant quality meal in every bite.  
 
Ali Baba is the only chain in Australia to open-toast their kebabs and wraps, a process that enhances the flavour and crispness of the K'Babs & Wraps before they are served. This also ensures consistency in quality every time you place your order at an Ali Baba store. 
 
 
 
3. Increasing Franchisor infrastructure for strong franchise support, effective implementation of business initiatives and response to change: 
 
The only constant in life is change. Ali Baba had gone against the trend of cost cutting and recruited an additional 4 operational area managers.  
 
Ali Baba has also recruited franchise development specialists. Some of these specialists have 30 years experience in franchising and will work one on one with the franchisees within the system. Franchise development specialists are a valuable asset to Ali Baba as additional benefits are delivered to franchisees. 
 
 
4. Intensifying marketing activities and increasing the level of advertising:  
 
The natural reaction of many franchisors downturn economic downturn is to cut costs in areas like advertising and promotion.  
 
Ali Baba has actively increased the level of advertising during economic downturn. This includes re-conceptualising its customer selling proposition to be more ‘value for money’, improving the quality of their product offering and launching new products relevant to the brand to continue successful trading through periods of downturn. 
 
Ali Baba’s brand building strategies have also incorporated more elements of direct response to ensure they maximise the sales potential for their franchisees during these activities  
 
One of the marketing strategies for financial year 2009 saw Ali Baba increase their level of involvement with the NRL wests tigers by becoming the Official Partner of their Performance and Nutrition team. Ali Baba is dynamically working with high profile sports players to capture their nutritional values and preferences and launch their healthy products designed for athletes in the mass market. 
 
 
5. Continuos Improvement in Operation Excellence delivering Simpler, Faster & Cheaper results for franchisees. 
 
Serving over 4 million customers per year, Ali Baba leverages its buying power effectively during this economic period to re-negotiate supplier agreements, streamline its supply chain inputs and pass on cost savings to its franchisees. 
 
Ali Baba Franchisees benefit from the one of lowest product costs in the marketplace for the highest quality in Australian meats. Franchisees have also stated they are happy with 90% of their products from the one supplier, delivered and ready to go.  
 
The low preparation in managing an Ali Baba franchise has also been improved, with most franchises being in and out for their franchise for opening and closing within 30 minutes. 
 
Ali Baba latest technology advancement to launch in November 2009 will be the automatic kebab machine slicers. This will further help franchisees with cost savings and build hygienic associations with the Ali Baba brand. 
 
For more information on becoming 
an Ali Baba franchisee call Frank Rechichi on 0424 161 942 or email franchise@alibaba.com.au today! 
 
 
 
Author: Nagey Kastoun 

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