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How technology is helping drive a coffee venture

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How would you like to visit a drive-through cafe outlet and have your favourite cup of coffee freshly poured and handed to you as you arrive? That's the latest technique that brand new franchise chain Sunriser Espresso is adopting with its licence plate recognition technology. 
Although it's a fresh name to franchising, the Sydney based business has been operating in Concord for a few years and has evolved the café-on-wheels concept over time. 
It's just undergoing a sharp redesign, the striking sunshine yellow and black colourway just the start. The yellow topped takeaway cups make for easy brand recognition when customers arrive at work with their hot drink - and that has helped expand the client base through word of mouth, building by building, says founder Nathan Smith, a former marketer at Nestle. 
But there is much more to the new look. A big awning reaches over the customer at the café point; a display case at car-window height tempts the customer to indulge in the baked goods; wooden panelling is used to accentuate the café feel - most evident in the sticker graphics that wrap around the box trailer and create a sense and perspective of a lively coffee shop complete with a queue of customers!
It's a far cry from the test vehicle that Smith began with. The trailer box had been purchased from online site e-bay, and fitted out with just enough room for one barista to work the equipment - the order-taker was positioned outside. 
"When we started out we set up the machines in the garage and practised and practised until we knew we could make the coffees. We had happy neighbours," Smith laughs. 
The idea came together when Smith was researching a business venture, had seen the potential for drive-through sites in the US, and then passed an unused car park, a council site on the way to work. 
The first step was to lease space and gain access to power, and despite scepticism about the true nature of the business, the council finally came though, leasing two parking spots to Sunriser. 
"We had pitched it as asset utilisation and a service to the locals." 
The opportunistic choice of neighbourhood paid off with Smith developing a loyal and friendly customer base. "It is in Concord, an Italian area. We served a lot of macchiatos," says Smith. 
The model was developed in response to market conditions, he adds. "The problem is land costs are so high. We need 1000 sq m but can't afford to pay 24/7 rent for that. "We can just licence the space based on the trading hours and pay in the region of 10 to 20 percent of the full rental costs. We're always a sub-licence and take a five year lease that rolls over." 
The plan is to take a lease of three and a half years to start, allowing six months to set up the business and sell it to a franchisee as a going concern, with a follow-up three year term. Key to the success of the model for Smith, who handles the rent negotiations, is signing up with corporate landlords who have multiple sites. 
Marketing is mostly word of mouth, social media, and making a big noise when the business first opens up. "It's hard to break a morning routine," explains Smith. "Price offers can attract discount-focused customers who only come back when there's a special deal. For us it's about visibility." 
Key sites are major commuter routes either at the beginning or end of people's journey. "At the end of the journey, schools are a great volume multiplier," he says. "The trick is to be where locals leave the suburb, the back routes. It's about local knowledge. You don't always have to pay big rents." 
The first franchisee is one of the baristas, a vote of confidence in the brand, Smith believes. The site has been running since 2009. 
Smith wants to target baristas and people who love and have a passion for cafes. In setting up a business there's a line to cross - how do I set up, how do I negotiate rents? Buying a franchise answers these questions he says.  
The investment level for the new look package is $120,000 plus GST, with royalties to pay but no marketing fee. Out of this investment Smith expects franchisees to be able to draw a return on investment, a salary and a profit in their term. 
Vendor finance is being considered for the first few franchisees to help the typically under-resourced baristas get a foot in the business. 
So, back to the licence plate technology. 
When the licence plate is read, it's logged in the database and the last three orders brought up - if there is consistency in the coffee order, that's sent through to the barista. 
Now Smith is addressing how to bring in mechanical triggers that ensure cars don't tailgate so the plates are clearly seen.
The technology is a bolt-on to a standard quick service point of sale system; but it is an option, and it works independently - if the camera fails, everything else in the system keeps working. But there is an added benefit - efficiency: cutting down the service time makes the queue shorter, and means smaller sites can be an option - with suitably shrunk rental costs.
Smith has ambitious targets: just six new outlets each year for two years, but then the pace will step up and he plans to reach 70 outlets within five years. 
He has already attracted equity partners, two partners in franchise law firm Baybridge have invested in the brand, and he is looking for more private investment. "The reason we've gone premium is that we can't compete with McDonald's or Starbucks," he says. "Our customer is white collar, someone who likes a good cup of coffee. We're not about fast food, cheap coffee and bad service.
"We are good coffee fast. We are bringing the café experience to the commuter; we've driven the café to the side of the road."   

Sarah Stowe

Sarah Stowe heads up the editorial in the Inside Franchise Business group at Octomedia. Sarah is a hands-on editor who has worked in consumer and B2B titles in UK and Australia and she has been editor of the View More...
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