Cookie Man gets to bite into the future
Four years ago Peter Elligett, the former Cookie Man employee who bought the franchise system, sold the business to Allied Brands. At its most prolific, the now defunct umbrella group of franchised brands also included BaskinRobbins [now handled direct from the US], Kenny’s Cardiology, Villa & Hut, Awesome Water and Awesome Entertainment. Elligett stayed with the company and for the 15 months prior to the liquidation had been looking after Cookie Man’s international development. In September 2010 the biscuit retailer went into liquidation.
What led Cookie Man to the brink was its part in the Allied Brands portfolio, Elligett insists. "The Cookie Man business is profitable and running fine. The liquidator was always going to sell it. The process wasn't as painful as it could have been, they made it easy."
In the brand's darkest hour it was Elligett who approached Andrew Benefield, managing director of Mrs Fields. "We've never really run head to head, we have somewhat different demographics. Mrs Fields customers are mainly 15 to 30s, we've got all ages but our core is 30 plus. We're in the process of changing this, getting more Gen Y by offering different products; that's been our focus for the last few years," Elligett says. "Mrs Fields is packaged differently. I'd like our business to look a little more vibrant and modern."
For Andrew Benefield, the synergies with the two cookie businesses are obvious — and buying out the competition is a strategic move. "It's part of our strategy, we would rather we owned them than saw another aggressive operator take over," he says.
Keeping competitors at bay is one thing; operating two biscuit brands side by side is another. There will be little in the way of shared resources for starters — just the accounts, says Elligett. But down the track there will be opportunities for the existing Cookie Man manufacturing facility to supply the Mrs Fields network with a variety of menu items. Benefield is keen to stress however that the Mrs Fields cookies, which are the backbone of that retail offering, will continue to be imported direct from the US.
"We can't manufacture the cookies, but there are some items in the Mrs Fields menu that it's not economical to import to Australia, but we can manufacture them here," he says.
It will be essential for brand integrity for the two systems to remain independent; it is in fact part of the agreement with the US franchisor of Mrs Fields that this should be so. "Both Cookie Man and Mrs Fields are quality operators and we can control the businesses and keep them separate," says Benefield. He is predicting a favourable future for the newly acquired brand. "Franchisees have invested in a good brand and are looking for a solid future. It didn't fail because of anything Cookie Man was doing. It inherited added costs as part of a public company, but if you run it as a private business, it will be profitable," he believes.
For Elligett, once again heading up the Cookie Man brand, it is business as usual but without the interference and overheads, what he describes as "the yoke of a public company in which the focus was lost". “We have a very low debt to equity ratio and we are in a very strong financial position going forward. We'll go back on the expansion trail but the liquidation has in no way impinged on our ability to sell franchises. The consumers are not aware because the stores are still trading, franchisees didn't have any setbacks. There were no supply issues and they have been very supportive. I don't see any prospective franchisees going to current franchisees and getting a bad rap."
At the time of writing, the Christmas period was still ahead of the retailer. Elligett reports that December figures account for 25 percent of sales.
"The reality is this is a very busy period, and we’re lucky to have a consolidation time. Expansion will be focused on quality, not numbers. We have always concentrated on super regional and regional shopping centres and Brisbane, Sydney, Melbourne and Adelaide will be our focus. Victoria is certainly under represented.
"We have a good bunch of franchisees and we've supported them through this time. It's a non-royalty based system, and we give better support than some other systems. We supply everything except Coke and milk, through our supplies, and these are very reasonably priced. We always try to better our purchasing to help the franchisees.
"We want the franchisees to be profitable."