Franchise brands continue to expand their commitment to sustainability, shrinking their carbon footprints with steps ranging from using solar power and recycled building materials to energy-efficient lighting. But for many companies and franchisees, creating greener real estate spaces is still just half the battle as they grasp their scope 1, 2 and 3 greenhouse gas emissions. From there it can be a very careful balancing act between costs and ROI.
There are plenty of examples of companies that are pushing the envelope to go "greener" with new use cases and a variety of sustainable initiatives. Elements of sustainable franchising are being incorporated into brand strategy and optimisation as the successful groups plan for future requirements.
Triple bottom line benefits
Green buildings and business has continued to gain momentum over the past two decades as brands and franchise operators discover the triple bottom line benefit that includes positive environmental, social and financial impact.
With a clear understanding of your emissions, a framework can be provided by NetNada that franchisees can use to guide design and operational practices and help improve the energy efficiency, waste, recycling, water usage, supply chain management and sustainability of restaurants. One of the big selling points for franchisees is that stores are approximately 25 percent more energy efficient than the previous restaurant model. The savings realized in terms of energy and water efficiency can have an impact on franchisees’ bottom lines, while the commitment to sustainability is something that resonates with customers and employees.
"So the value comes both from the positive reputational benefits, and also from the bottom line financial impact of utility cost savings," says John Herth, senior director of global design and construction services at Dunkin’ Brands.
A few big wins for franchise stores are:
- Reduced energy use by increasing the efficiency of the lighting and using high efficiency heating and cooling equipment to help lower energy use and emissions.
- Reduced water usage with low-flow faucets, monitored water usage, more efficient irrigation and regionally friendly plants that need less water.
- Reduced waste and increased recycling, monitoring the effectiveness of your waste management onsite and the diversion rates you achieve with your waste management service provider
- Supply chain analysis and management, that allows transparency on your scope 3 emissions and the impact of the products/services you buy and use.
- The focus on sustainability also applies to health and indoor air quality, which also has huge benefits to staff performance and customer satisfaction
With NetNada these metrics can be monitored and compared between stores to encourage performance
Eco-friendly concepts embrace green
For some franchisees, green business goes hand-in-hand with an eco-friendly business model. In addition to working with sustainable vendors and suppliers on building materials and fixtures, businesses are moving away from traditional ‘high waste’ franchise marketing tactics such as printouts, brochures and flyers.
Even those small changes encourage people to think about things differently in their everyday lives as it relates to reuse, reduce and recycle.
Weighing cost vs ROI
A big hurdle for franchisees is juggling the up-front costs associated with green store fronts and building. It’s becoming more and more prevalent, but high initial costs are the biggest challenge to overcome. Incorporating things like green plumbing solutions that use less water, to outfitting light ballasts to be LED compatible, analyzing carbon heavy aspects of supply chains and engaging staff to change processes such as waste management… every aspect of the businesses scope 1, 2 and 3 emissions must first be understood before they can be actioned. For this reason it is important to understand where the majority of emissions come from and which solutions are the best fit for each individual location.
Gamification of reduction strategies is a great way to engage stores and franchises to foster a healthy competition between locations as they strive for sustainability.
Certification is a good motivator for businesses to strive towards as each action contributes to the end outcome. Whether it be LED bulbs, reduction in water usage, blocking out heat via paints and tinting, high efficiency air conditioning, and/or using recommended janitorial chemicals and equipment, which are sustainably certified… each action contributes to the goal of accredited certification.
Many franchisees are still reluctant to spend that extra dollar on infrastructure amid other rising cost pressures, as well as other areas to invest, such as marketing, that can have a more direct impact on revenues. However it is important to note that most modern customers are interested in sustainability and the green aspect of your/their operations. However the data shows that while many recognise it as a priority, far fewer are willing to pay just for that and as such the business needs to incorporate these changes to positively shift their own bottom line. NetNada helps track the return on investment behind your changes and highlight the cost savings available.
Energy efficiency is one of the key focal points of green building, because the ROI on energy savings is usually an easy sell for operators. The common approach for franchisees is to cobble together different initiatives, such as working with one vendor to update lighting and others to add smart thermostats or upgrade HVAC equipment.
Franchisees are best off to take a more holistic view and upgrade lighting, along with other aspects such as HVAC and equipment to create a bundled approach so that the ROI is blended with short and longer-term paybacks. This helps companies see immediate results on their bottom line. You are talking big savings when you can reduce your energy consumption alone by over 30%!
Also do check out our blog on "Sustainable Business - Where is the ROI?"
Get in touch to find out more about how NetNada can help your franchise work towards carbon neutrality!