Born and bread
Bread has been a staple of life for many cultures for thousands of years and today every high street has its baker. One prominent name in Australian bread retailing is Bakers Delight which this year is celebrating three decades in the industry.
The name is intended to convey everything about the business: it originated from the belief that every baker should be delighted by the product they bake and every customer should be delighted by the service they receive. Thirty years on the company insists this vision still drives its practices and culture.
Back in 1980 Bakers Delight was founded by fourth generation bakers and current CEOs Roger and Lesley Gillespie, together with Gary Stephenson. Their very first bakery was in Hawthorn, Melbourne and it is still going strong today.
Eight years later the Gillespies owned 15 bakeries; quietly confident about their proven formula they began to franchise and by 1991 had built a business of 43 bakeries. In the next two years, Bakers Delight expanded to 200 bakeries and just 10 years later, 600.
Now there are more than 700 bakeries across three countries.
Adelaide was the site of the first non-Victorian franchise, which opened in 1991. Just two years later Bakers Delight expanded to New South Wales, Queensland and Western Australia and in 1995 the business went international with the launch of bakeries in New Zealand. By 2003 expansion into Canada under the COBS Bread brand was underway.
And general manager of marketing and operational support for Bakers Delight, Chris Caldwell, reveals the company’s greatest opportunity is in Canada with its 62 bakeries and room to grow and expand.
That’s not to say the home base is being neglected. “In Australia there are still plenty of locations where we could open if we had more franchisees. It’s about looking for opportunities that complement and grow the business,” he says.
But, as for other franchisors, the path has not always been smooth.
There is franchisee dissatisfaction voiced on an internet blog and in 2008 the Australian Competition and Consumer Commission investigated a number of franchisee claims of churning (repeatedly selling a franchise site the franchisor is aware will fail) but these claims were dismissed.
“In terms of rumblings, these are always more of a concern to those outside the organisation than internally,” insists Caldwell. “We were very confident the ACCC would find Bakers Delight had not engaged in wrongdoing.
“We wouldn’t have grown to the level we have through unconscionable conduct. With a network of over 700 bakeries and 550 franchisees there are always going to be some franchisees that aren’t happy with the way the business partnership ended.”
The company maintains hands-on support and proven business procedures and systems are designed to assist franchisees in managing their business.
Included in the support is marketing (which takes in advertising, public relations, sponsorship, local marketing, research, design and product development); training for franchisees and bakery staff; financial assistance including rostering and payroll systems, disclosure of group reports, negotiating bakery public liability insurance, cash flow reporting and customer loyalty programs; human resources support, employee relations and for help with relevant legislation; group purchasing arrangements; and product safety and occupational health and safety standards.
And of course the key search for property, locating viable precincts and negotiating leases directly with landlords is also part of the franchisor’s support package.
Bakers Delight’s proven business model, it states, has remained strong during the downturn.
In a November 2009 ranking as the sixth top performing franchise in the industry in a survey conducted by strategic marketing intelligence company, 10Thousand Feet, www.topfranchise.com.au, Bakers Delight was commended for its strong brand perception, the operational support it provides franchisees and most importantly its return on investment when compared to the industry.
The standout result, however, was Bakers Delight’s brand recognition. A significant 94 per cent of franchisees agreed Bakers Delight is a well recognised brand, compared to the industry average of just 56 per cent. Additionally, 96 per cent of franchisees agreed they are passionate about their product, exceeding the industry by 10 percent.
In the Franchise Council of Australia’s MYOB Excellence in Franchising awards 2009, Bakers Delight was a joint winner of the Franchisor Social Responsibility Award, a happy achievement for a franchise that sets such great store in its community links and environmental actions. The bakery franchise regards its commitment to local communities as pivotal to its connection with the Australian market, enabling franchisees to reinforce to customers that these outlets are run by real people, not corporations, says Caldwell.
Environmental, community and social initiatives are integral to the network. Environmentally friendly calico bags and artisan ovens reducing energy by 25 per cent are two of the earth-friendly initiatives introduced.
Community support can be anything from supporting local primary schools, to Rotary Clubs, local hospitals, fundraising events, bakery visits or sponsoring the ‘best and fairest’ for the local footy team.
Franchisees are provided with tools to engage their local communities such as the Bakers Delight Dough Raiser program, so they can donate a percentage of sales to a community group of their choice.
Nationally, since 2000, Bakers Delight has raised more than $3.7million for Breast Cancer Network Australia; in 2009 its bakeries and breast cancer survivors joined forces in communities’ right across Australia to raise a record breaking $1 million for Australians affected by breast cancer.
On ‘Bundraiser Day’ March 20, all 650 Bakers Delight bakeries across Australia and New Zealand donated $1 from every six-pack of Hot Cross Buns sold, to raise approximately $123,000 and counting, for the purchase of essential medical equipment for seven major hospitals across Australia and New Zealand.
Franchisees also donate more than $143 million in bread to local charities each year.
Healthy living sponsorships are actively promoted with an aim to educate consumers on healthy bread options through sporting events and clubs, health bodies, community groups, schools and hospitals. It is linked with a variety of initiatives such as Go Grains, supporting the consumption of at least four serves of grain daily; it draws on the resources of Food & Nutrition Australia for ingredient research, product advice, health claims, and regulatory updates.
Bakers Delight’s campaigns include the launch of Fit2Go bars with essential B vitamins, iron, fibre and no added sugar, and the family-friendly Chia seeded bread range, high in nutrients.
Standards build profit
A compelling element of the business is to make its products relevant and competitive. The product and the standards required to sustain top quality are everything to the business, Caldwell admits.
“The system is so much about standards and these are continuing to evolve.”