With more than 20,000 café outlets across the country, it’s safe to say Australians love a fresh brew, and coffee franchises are some of the sector’s biggest draw-cards.
The $9.8bn industry is one of the food and dining sector’s strongest, with a fiercely competitive catalogue of caffeine providers eager to pour out the best cup. However, despite big brands becoming household names, surprisingly none of them hold a dominant position in the market.
The three leading franchised businesses are all multi-brand food retail operators; Retail Food Group with Gloria Jean’s Coffees and Michel’s Patisserie, Minor DKL holds The Coffee Club in its portfolio and Hudsons Coffee is managed by Emirates Group.
With customer profiles changing and tastes evolving, franchised coffee chains are continuously on the hunt for differentiation. It’s worth noting that independent, boutique coffee shops are now growing faster than chains, but a renewed focus on technology and sustainability could throw support back behind the big names.
Inside Franchise Business spoke with three coffee franchises, all with different consumer bases and product offerings to hear what they believe are the top trends in coffee.
Mrs. Fields
Q: How are you making the brand more adaptable to location and demographics?
A: We are adjusting our seating areas for every new lease to be larger, utilising a combination of seating options, to create a more inviting atmosphere for our customers. We are also developing a satellite store concept to allow us to open in smaller locations, particularly in transport hubs.
Q: How does your brand help franchisees stay compliant?
A: We hold quarterly seminars with our franchisees in each state with workshops ranging from Fair Work, payroll and employee management to continually upskill our franchisees. Mrs. Fields has engaged the National Retailers Association on behalf of each franchisee for the past two years, enabling them to have quick access to professional advice at all times.
Q: Do franchisees need to do barista training?
A: Absolutely. New franchisees undertake a five-day intensive one-on-one barista training course with our trainer in a controlled environment, then spend two weeks in a training store under supervision making coffee for customers.
We will then have our barista trainer instore for the first seven days to assist in training and consistency of staff, with follow up visitation ongoing.
Q: What are the brand’s growth plans for the next five years?
A: As a long-standing brand in the Australian market, Mrs. Fields is on a sustainable growth path and would like to have 55+ stores in five years, by opening three to five stores per year.
Bar Bellaccino
Q: How are you making the brand more adaptable to location and demographics?
A: A good design plan needs to be adapted for the different needs of each location. Bar Bellaccino in Pitt St, Sydney, has a very small space so the focus is on large coffee sales. This store needs a different layout to a more traditional cafe in a shopping centre. Importantly our Bar Bellaccino business model allows for the “local factor”. Our franchisees are encouraged to incorporate a local specials menu which focuses on the local community tastes.
Q: What is an average consumer spend?
A: Cafes have a $10 average spend – each cafe will still have a large amount of takeaway coffee every day.
Q: What innovations have you introduced in the last 12 months?
A: Bar Bellaccino has focused on instore (franchisee) profitability. We have developed delicious and different food options that maximise freshness and profitability while maintaining simplicity. Instore profitability is now being improved with technology to assist the barista, which will lead to consistency and profitability improvement.
Q: How many innovation projects is the business working on now?
A: With our partners Bar Bellaccino is working on two projects to develop innovative point of sale delivery options and customer interaction options.
Q: What are the brand’s growth plans for the next five years?
A: Bar Bellaccino intends to only expand into quality locations that suit our brand. We believe five to 10 new stores per year is achievable and aligned with our values.
Q: How will the business adapt to competition and revenue challenges?
A: We are constantly looking for ways to improve our sales and reduce franchisee costs. We are in a great position to expand into the current market offering high value, low investment franchises. With our bonus structure Bar Bellaccino is offering several premium locations for $140,000–$180,000. Note these stores will have a fitout and setup of around $300,000 – that is great value.
Lava Coffee
Q: How are you making the brand more adaptable to location and demographics?
A: Our fully systemised cafe in a box! We have recognised that by fitting out an amazing looking shipping container with the latest technological advancement, we can take speciality coffee to non- traditional locations anywhere in Australia. By doing this we have shortcut the time for approvals, reduced the costs of rent, labour, tainting and ongoing maintenance.
The concept makes it easier to get finance or just to buy it outright. At $139,000 + GST this is a perfect starter business and it can pretty much go anywhere. From car parks, industrial sites, unused lots, mines to marinas, office complexes, parks.
Q: What innovations have you introduced in the last 12 months?
A: We have introduced the most advanced brewing and dispensing coffee tools in the marketplace. Ubermilk and Puqpress are just some of the additions that help drive labour costs down and increase consistency.
Q: How does your brand help franchisees stay compliant?
A: We ensure that we keep our partners informed about all the latest local and federal regulatory changes. We harness our point of sale system and accounting software to ensure our partners are aware of these changes. We use these tools to make it easy for our partners to keep things on the right track.
Q: What are the brand’s growth plans for the next five years?
A: Lava Coffee is looking to roll out 50 locations in the next five years.
Coffee franchises
Australia’s love of coffee isn’t going to decline any time soon. In fact, demand is increasing tenfold as the years progress.
However, a fixation towards boutique offerings is changing the way coffee franchises operate. If you are looking to break into the café sector, be sure to do your homework and take a look at the demographics and demands of your local area.
Want to brew up a fresh future of your own? Take a look at these terrific franchise opportunities.