IN a south Dublin sandwich bar, a one-time mortgage broker is whipping up a Subway storm, cheerful despite the requisite bottle green uniform.

A few miles away, a one-time marketing boss is planning the roll-out of a new fitness brand, having channelled her disillusionment with a Curves franchise into a fresh launch.

Elsewhere, a one-time marketing executive is planning Hell Pizza's assault on the Irish market, gearing up to sign the first franchisee in his 30-outlet plan.

And in the heartland of corporate Ireland, solicitors are drawing up legal agreements for one of the only sectors that continues to deliver deals and banks are vying to lend to one of the only sectors still seen as "safe".

Down the halls in some of those very same offices, a battle is raging to rescue the once-mighty O'Brien's Sandwich Bar chain from its slump into liquidation.

This is the coal face of Irish franchising, a landscape that's growing bigger by the day despite the recession, and sometimes even because of it.

But while the €2.5bn plus sector is getting bigger, it could well be getting riskier too.

Redundancy money and a quest for gainful occupation is driving scores of laid-off workers into the market, but if these new entrants don't have the business acumen to match their new ventures, the fall-out could hit not just them but their entire brand.

Fast food chain

It's not that long since US fast food chain Jack in the Box was colloquially renamed Sick in the Box after a salmonella outbreak, focusing franchisee minds on the importance of protecting the brand.

Meanwhile a desire for security is propelling interest from existing SMEs who see franchises as "safer" but their interest, coupled with the newly redundant workers, means competition in some spaces is greater than ever before.

The sheen of invincibility around franchises has already been broken by the implosion of O'Brien's sandwich bars and the collapse of the Lemongrass restaurant chain; further failures aren't inconceivable as the economy continues on its downward trajectory.

Put like that, the outlook sounds daunting but Subway's newest Irish operator, Juerg von Geitz, is brimming with an unwavering enthusiasm, undoubtedly enhanced by a recent stint at the almost cult-like 'University of Subway'.

Mr von Geitz first met Subway in 1988 but "didn't think Ireland was ready".

However, after recently quitting the mortgage-broker business, Subway was one of his first ports of call given the now-mature state of the Irish convenience food market.

Model

"With Subway there's a model that's clearly defined and it works," says Mr von Geitz. "You'll never meet a poor Subway franchiser."

The model sees would-be Subway operators go through months of rigorous checks and tests, culminating in a university experience he likens to "doing the Leaving Cert all over again".

Successful franchisers also have to pay a one-off €10,000 fee and get their sites approved by Subway's local 'development agent', or DA as they call it.

Once in business, the franchisees pay a percentage of their turnover, all their prices are approved by head office, all their sourcing is done through head office and scheduled and surprise checks are made to ensure everyone's compliance with an exhaustive list of policies and guidelines.

Some experienced franchisees question the percentage of turnover payment, a standard in many franchises but something that ultimately sees harder-working franchisees paying more than their lazier peers.

Others point out that the apparent stranglehold Subway has over almost every aspect of the business would be a challenge "to any creative person or anyone who wants to have control over their own profits".

Mr von Geitz, however, thinks the whole process is "brilliant" since it copper-fastens the standards of all Subway operators and acts as an added system of checks and balances on his own business and staff.

William Fry franchising boss David Cullen lists "retaining exclusivity over a zone" as one of the key things to push for in a franchise deal, echoing comments of experienced franchisees across several industries.

Exclusivity is a concept Subway has failed to embrace.

"If someone wants to open near you and you think your business could suffer you can appeal in the US," says Mr von Geitz. "I've never heard of anyone in Ireland winning an appeal ... "

The lack of exclusivity poses the obvious issue of Subway saturation.

"The DAs are sensible," argues Mr von Geitz. "I wanted to open a Subway in Ringsend, they wouldn't let me because they said the turnover wouldn't justify it.

"We're 10 years off being saturated in Ireland."

So confident is Mr von Geitz that he and business partner Paddy Maloney are planning to open between five and seven Subways over the next few years since "the mortgage business is screwed".

Enniskerry businesswoman Lorraine Sweeney shares his passion for franchising, but her zeal for the genre is borne of decades at the front line, first through Bewley's and Four Star Pizza, and more recently through Ramada, Best Western and Barney's Coffee.

"I'd be very pro-franchising," she says. "People who have no experience can get something that's tried and tested, and a big brand can really pull in customers."

Ms Sweeney stresses that franchise selection is crucial, diplomatically pointing out that not all franchises work as well as others, while some good performers are at market saturation.

"It doesn't have to be food," she says. "There's a lot more out there now."

Operator

"People should look beyond Ireland, if you go to conventions in the UK or the US you'll see things out there that you never knew could be franchised," she adds, pointing out that bringing a new franchise to Ireland can give the operator more flexibility over pricing and ranges.

A quick online trawl throws up a raft of little-known franchising prospects like sign makers Signarama, small business advisers Relax the Back, home cleaners Maid Brigade and children's fitness firm Stretch 'n' Grow International.

Ms Sweeney has trodden the international boards herself, launching Barney's Coffee onto the Irish market in 2006 and growing the brand to four stores. "We intended to have a lot more," she says candidly, referencing the economic picture.

"Barney's are flexible, they know now's not the time to be opening stores."

Snap Printing's Irish daddy Michael Kearney is another man who knows the value of a good international franchise fair.

Having grown Snap to 16 outlets by 2004, Mr Kearney and business partner Ed Murphy set out in search of a new venture, travelling to shows as far afield as Washington DC before stumbling across home-help chain Home Instead.

"Their market wasn't something we were overly familiar with from a franchising perspective, but we were blown away by the culture and the potential," he says.

Launch

The model was proven by Home Instead's 500 outlets in the US and Ireland's ageing population convinced the duo that the franchise would be a winner here, prompting an Irish launch in 2005.

Four years later, Home Instead has 15 centres, including four that have opened in the last year. Another two are due to open by the end of 2009, pushing Home Instead closer to its "capacity" of 22 in the Republic and 4 in the North.

The growth has come despite a vigorous vetting programme that includes interviews, financial interrogation and psychometric testing, not to mention a start-up payment of €75,000 to Home Instead and the same again in working capital.

"We've turned down well over 200 franchisees," says Mr Kearney. "Some of that was about people's financial situation, others didn't have a genuine interest in the area, they'd tell us they wanted to get into it to be their own boss, but that's not enough."

Selection process

The selection process may sound harsh, excessive even, but it teams with Ms Sweeney's conviction that good franchises "should be careful some cowboy doesn't ruin it for everyone" rather than "just letting anyone in" and taking the sign-on fee.

After getting through the selection hurdles, Mr Kearney's franchisees are given exclusivity over an area and a 10-year contract with an automatic right to renew for another decade if they conform to standards.

"As well as growing the number of franchises we see great potential to grow the business of each individual franchise," says Mr Kearney, spelling out the long game that could run to 10 or 15 years and sees Mr Kearney's head office take 7pc of turnover for royalties and another 1.5pc towards PR and marketing.

While Mr Kearney sees his franchisees as long-term partners in sustaining Home Instead's Irish operations, not all franchise arrangements are as enduring.

US-born Morgan Price was Ireland's first Curves operator, launching the fitness business into the Irish market in 2004. Since then, the women-only gym has grown to 63 outlets but Ms Price has headed off for pastures greener and is rolling out her own Body Smart franchise.

"I didn't know anything about fitness and Curves was a really good place to learn, but there were things I wasn't happy with," she says. "With Body Smart I've changed those and I've done my own thing."

Ms Price's "own thing" is a high-tech gym that's tailor-made for athletes, as well as those exercising for medical benefits. The fitness enthusiast has been working on Body Smart for three years and expects to sign up her first franchisee before Christmas with hopes for another "half dozen" early next year.

"There's no lack of people who think a recession is a good time to set something up," she says. "A year ago it would have been different but now people are coming out of the fog."

Teleco O2 has the same faith in the franchisee marketing, and consumer sales director Tony Hanway says he's "confident" of signing up 35 O2 franchisees by the end of the year, building on the 25 that have already come on board since O2 began franchising in Ireland this summer.

The upbeat growth projections of many franchisers are in stark contrast to Ms Price's former mantel Curves, where a spokesperson admits the chain is "not widening distribution at this point", given "the current economic conditions in Ireland".

One of Ireland's earliest franchises, McDonald's, is another player that's closed to new entrants, despite getting regular expressions of interest from would-be operators.

"We've opened four stores in 2009, three were by existing franchisees and the other was company-owned," says a spokesman. "We think we have the optimum number of franchisees, they know our systems so it's better to expand with them."

Other fast-food outlets remain very much open for business, with newcomer Hell Pizza targeting particularly aggressive growth.

Launched by Bruce Wood and Ian Kartland earlier this year, Hell is hoping to have 30 outlets within its first seven years, although Mr Wood admits the bulk of the growth is likely to come after 2011.

"It's absolutely realistic to roll out Hell in this market," says Mr Wood, citing Hell's success in its home New Zealand market and further afield.

"There'll always be room for quality product."

While Mr Wood seems fearless about launching a new brand in the Irish market, bringing in new franchises isn't always such a smooth process.

Investors

In 2004 several Irish investors handed over thousands of euro to bring a UK service franchise to various areas of the country.

One recalls paying out €20,000 for equipment, technology and an exclusive area after being told operators in the UK were making £100,000 a year.

"I did it for two years, my total turnover was €30,000 and that was after working really hard," he recalls. "We tried taking it up with them but they just fobbed us off and told us to advertise more.

"After two years I handed it back. I'd been 22 years in business and I thought the franchise would be an easy way to make money. I learned my lesson the hard way."

- Laura Noonan

Irish Independent