From 0 to 50 coffee franchises in 10 years for Zarraffa's Coffee
Zarraffa’s Coffee started out as a roasting house based in Southport on the Gold Coast, with its founder and director, Kenton Campbell, launching the company’s first store in 1997 in the Australia Fair Shopping Centre. The 50th store opened in late 2011.
Kenton Campbell branched out from a naval career in the early 1990’s, and found himself in a temporary position waiting on tables in the US. Campbell describes the defining moment in his career, “I’d put through $800 one day, and thought, I want that, not my pay. I want to have a business of my own.”
He set himself up with his first espresso cart in Seattle, but admits he didn’t account for the costs that are taken out of the turnover, but nevertheless had set himself on a new path to entrepreneurship.
Back in Brisbane, Campbell took jobs in cafes, however; he noticed that no-one was carrying around coffee, and in just a couple of months he had come up with the Zarraffa’s name and brand.
After the opening of the first store, Campbell opened a Harbour Town site, but because the business was growing too slowly he had to consider other options to build the business.
Campbell investigated franchising as an option and realised that his brand had the opportunity to grow under this model, and in fact saw the 20th Zarraffa’s coffee franchise outlet open in just 24 months.
The focus on a support structure as a strength in business that eases the load is one that he employs when looking at multi-unit expansion within the network. A successful business unit rather than a network of stores growing for growth’s sake is the key.
He admits that financing the business has been a challenge and while other systems may step in and offer funding to franchisees, Campbell’s view is different in that he does not want to become a bank. Now the Zarraffa’s business is seen as a good risk, with both Westpac and NAB accreditation making it easier for franchisees to get the finances necessary to invest.
Work ethic, personality, ongoing ambition, life situation and expectations are all considered aside from any capital offered by franchisees.
Many franchise systems offer either a three or five year term, with maybe one or two options to renew, however; Campbell reckons a franchisee needs the security of a long trading spell in order to make any money.
High rent in major shopping centres also means customers will increasingly see Zarraffa’s Coffee outlets in suburban venues rather than high profile shopping centres. This move into suburban areas is by design, and makes franchisee costs viable as well as offering easy access and convenience for the customer.
The average franchise turnover is over $1m, and when compared with costs and profits, Campbell is confident that the Zarraffa’s coffee franchise system is holding its own in the competitive coffee and cafe marketplace.
Zarraffa’s 2020 vision is to be Australia’s and New Zealand’s premier coffee specialty chain, and in 2012 keep your eyes on the radar, says Campbell, as Zarraffa’s is looking to expand, but in a measured way, “once I push the button, I’m like a bull at a gate,” he says.