Healys Corporate Department recently worked with Bread Ahead, an artisan award winning bakery and baking school based in London.Karen Lord, Partner & Head of the Corporate Department, and solicitor Charlie Pattihis worked with Matt Jones of Bread Ahead to launch the franchise and joint venture arrangement with a large family-run company in the Kingdom of Saudi Arabia. The deal involved negotiating a detailed development joint venture agreement and supporting franchise and commercial agreements.We caught up with the Founder and Head Baker of Bread Ahead, Matthew Jones, to get his thoughts and reflections on the deal, how this opportunity came about and what it takes to launch a franchise in a foreign jurisdiction.
1. Firstly Matt, thank you very much for sitting down with us today and agreeing to chat a bit about Bread Ahead and your recent deal in the Middle East. To start things off, could you tell us a little bit about your background and how you came to create Bread Ahead?
"As a restaurant chef, I am passionate about food; and the core principle of Bread Ahead is selling good, delicious food to enthusiastic people. I started working as a chef, pastry chef and baker as soon as I left school and spent 10 years working in the London restaurant scene. I always had a particular love for baking and in 1997 I ended up running the Soho Conran Bakery. It was while working there that I got the idea to open up my own business; and Bread Ahead was born."
2. What is Bread Ahead and how would you describe the business in one sentence?
"We are a multi-faceted bakery that specialises in giving the customer not only a great food experience, but also inspiration. Education is one of the company's key underlying principles, and it's immensely rewarding to have the opportunity to teach tens of thousands of people each year in the art and craft of baking."
3. The business has gone from strength to strength and even Covid hasn't seemed to stop you. Can you tell us what you did to pivot or adapt to manage the pandemic?
"Lockdown was naturally challenging, but our response has been to adapt and keep moving; and I'm proud to say that our bakery didn't close for a single day during the pandemic. We were fortunately able to pivot our baking school to an online experience. It was something that we had been considering for a while, and it really resonated with people and rode a social media wave. Our online community has now grown into a global audience, with customers from the US, Japan, the Middle East and Brazil."
4. As your company has expanded you've tended to open new bakeries or shops and run them as part of Bread Ahead; but you have recently made the decision to franchise. What is it about franchising that was an attractive option for you and Bread Ahead?
"Frankly it looked like the correct business option for us; and since the teaching aspect is such a core part of our business, it seemed to be the perfect way for us to expand into different countries. We approach franchising a little differently to other businesses. It's more of a joint venture with key partners as opposed to the conventional model."
5. Earlier this year we completed an exciting new franchise development deal in the Middle East. How did this opportunity come about?
"That's an interesting story. It was purely word of mouth. The wife of a senior member of a very large family in the Kingdom of Saudi Arabia (KSA) visited our store in Borough Market, tried one of our signature doughnuts and loved it - and it all came from there………"
6. Negotiations were quite intense at times. What are some key points you'd recommend a potential franchisor should bear in mind when granting an international area development agreement?
"My advice to anyone looking to do something similar, especially in the Middle East, is to be aware of the differences in societal and cultural norms compared to the UK. We quickly found that, even though the agreements were all subject to English law, we were going to need to incorporate a number of changes to account for the commercial realties of actually operating a business in the KSA."
7. This was your first cross-border transaction. What were some of the key challenges you faced as a result of this and what was something that surprised you about this deal?
"It quickly became apparent that there is much more to a cross-border venture than formulating and sharing recipes! I can remember there was a huge amount of work behind the scenes to set up the infrastructure required to make this work, quite aside from the negotiation of the actual development and franchise agreements. I would strongly recommend anyone embarking on a similar venture to take your time, be organised, get a strong team around you (including a good legal team!) and above all, do your homework."
8. Why was this deal so important to you, and what opportunities do you think this will open up for Bread Ahead?
"The first stage in any journey is always the most difficult - but also the most exciting. This deal was so important for us, because it gave the company a foothold in the Middle East and will hopefully open up a gateway to a much bigger world."
9. What are your plans for the next 12 months?
"The pandemic was a game-changer in every way. Regional cities have become much more attractive areas to live and work in - and with many people still working from home, there is a great deal of opportunity for us in those areas. On an international level, we plan to refine the model that we have established in the KSA and continue expansion into other territories in the Middle East."
10. Is there anything else you'd like to add?
"The recent pandemic has led to unprecedented challenges for individuals and businesses alike. But alongside these challenges come opportunities - and it is possible to adapt and flourish. I really hope that people use this time to get into baking, hone their skills or reposition their businesses; and that we can welcome new talent into the industry."For more legal insights, please visit Healys LLP's website.