Greggs – Is It a Franchise?

11/09/2018 08:00 | Start a business

Greggs Franchise Cupcake

Greggs is possibly the biggest name in UK baking and one of the most beloved high street stores in the country. Most companies of its size would have considered expanding via the franchise model but Greggs is a little bit different. Here, we take a look at whether Greggs is a franchise, whether it's a traditional business, and whether there are any franchise alternatives to Greggs.

Greggs background

Greggs was founded by John Gregg in 1939. However, for the first 12 years of its existence, the business had no store and operated as a bicycle delivery service that delivered fresh eggs and yeast to the people of Newcastle. In 1951, Gregg opened the first Greggs bakery in Gosforth. John Gregg died in 1964 but the business was taken over by his brother, who soon began to expand beyond the city of Newcastle. By 1976, there were Greggs bakeries in Leeds, Glasgow, London, Kent, and Manchester.

The next three decades were defined by incredible growth and by 2011, the Greggs network had expanded to encompass 1,500 shops. In 2013, facing stiff competition from supermarkets, Greggs began transitioning from traditional bakery products to “food on the go” offerings. It is most famous for its iconic sausage roll and sells approximately 2 million units every week. The business also offers a wide range of pasties, sandwiches, and seasonal menus.

Greggs do not typically offer franchise opportunities

Greggs occupies a position somewhere between the franchise system and a traditional business model. In the vast majority of cases, it does not utilise the franchise model and will not offer individual one-off franchise agreements.

Historically, it has preferred to keep the management of its stores in-house and to retain control over day to day management of the entire organisation. Considering the fact that Greggs now boasts more than 1850 stores across the country, this is an impressive feat. Whereas most companies would have turned to franchising to facilitate this type of rapid expansion, Greggs was able to achieve it based on its quality products, appealing pricing system, and highly effective branding.

Greggs franchise for sale

It is important to note that there are some occasions on which Greggs enters into a franchise relationship with corporate partners. Currently, the business has franchised out over 11 stores in locations where it would otherwise be difficult to operate a company-run store. This includes service stations, petrol stations, and educational establishments such as universities. Generally, these partnerships involve a business committing to opening 10 or more Greggs franchise units on properties they own or manage over a scheduled period of time. Organisations that fit the criteria can register their interest on the Greggs website.

Greggs across the UK

Greggs advertises itself as the UK’s leading bakery “food on the go” retailer and is considered one of the country’s most recognisable brands. It employs approximately 22,000 employees and serves millions of customers every week. It generates an annual revenue of £960 million and a net income of roughly £57 million.

While it has suffered from declining high street foot traffic, the switch from traditional bakery to “food on the go” retailer breathed fresh life into the business and allowed it to rejuvenate its brand image. Over the last few years, it has focused on refitting existing stores as much as opening new locations.

Baked goods franchises in the UK

In the UK, there is a large number of franchises operating in the baked goods industry. However, there are few that can compete with Greggs for market penetration and brand recognition. The vast majority of franchises in the sector are single item specialists (for instance, Dunkin' Donuts predominately sell doughnuts or Cinnabon retail cinnamon rolls).

That being said, there are traditional bakery businesses currently using the franchise model to facilitate expansion. The most obvious example of this type of franchise is Warrens Bakery. Here, we take a look at these three different franchises in the UK and examine what they’ve got to offer.

Warrens Bakery

Warrens Bakery has over 150 years of baking experience and is completely devoted to the craft of baking. Their franchise network currently encompasses around 50 franchise units and the business is looking for driven individuals to help expand the franchise and penetrate new markets.

In order to become a Warrens franchisee, you’ll need to invest at least £18,500. This includes all of the required training, access to support systems, your operations manuals, site design, launch advertising, and £5000 worth of marketing and PR support. On top of this franchisees will also need to factor in property costs, working capital, and equipment hire.

Cinnabon

Cinnabon was launched in 1985 in the US. Its first store opened in the SeaTac Mall in the north-western city of Seattle and, when it succeeded beyond expectations, the business began expanding across the entire US. It specialises in retailing its world famous cinnamon roll, as well as a wide variety of complementary products.

A total investment of £140,000 is required to open a Cinnabon franchise. Franchisees can opt to run an in-line or kiosk-style store and will receive all the support, guidance, and assistance that you need to succeed in the competitive baked goods market.

Dunkin’ Donuts

Dunkin’ Donuts is one of the most recognisable brands in the world and a major US franchise import. Founded in 1950, the business has accumulated over 65 years of experience and expanded to set up stores in an incredible array of countries.

In order to become a Dunkin Donuts franchisee, you’ll need to demonstrate a desire to open a number of franchise units. You must also have liquid assets totaling £1.2 million and a net worth of £2.3 million. All franchisees must have previous experience in the food industry, though Dunkin’ Donuts will provide ample training to successful candidates.

Conclusion

Though Greggs does not offer individual one-off franchise opportunities, there is the possibility to partner with the bakery if you're a business with access to a petrol station, university, or service station real estate. However, there are a number of other franchises to consider if you're aim is to break into the baked goods market.

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