Star performance for franchisor Retail Food Group

By Sarah Stowe | 06 Nov 2015 View comments

Major food franchisor Retail Food Group has reported record figures for its financial year 2015 performance, with revenue up 63.4 percent from 2014 to $210.4m.

The business that includes Donut King, Michel’s Patisserie, Crust Gourmet Pizza and recent acquisitions Gloria Jean’s Coffees and Cafe2U, has boosted its global franchise footprint, adding 1012 outlets. That equates to a 73 percent increase in network population, driven by both acquisitions and organic outlet growth.

Store growth

Traditional division: Donut King 20 new outlets/ revenue $15.9m; Brumby’s Bakery 10 new outlets/ revenue $14.2m; Michel’s Patisserie 16 new outlets/ revenue $18m – a total of $48.1m. 

QSR division: Pizza Capers/Crust Gourmet Pizza 32 new outlets/ revenue $19.8m.

Coffee retail: Gloria Jean’s/bb’s/Esquires/It's A Grind 80 new outlets/ revenue $12.7m.

Mobile: Cafe2U/The Coffee Guy 42 new outlets/ revenue $2.1m.

Same store sales increased for Donut King and the coffee retail brands, stayed level at Brumby’s Bakery, dropped in the quick service restaurant pizza sector, and for the first time in four years achieved a positive figure at Michel’s Patisserie chain.

Andre Nell, RFG CEO (franchise), told, “FY15 is the first time since FY11 we’ve had positive same store sales, and that’s due in part to NBS rollout which is only part way through.”

The National Bakery Solution (which provides state-based baking facilities) has underpinned the patisserie turnaround, and is scheduled for completion in the first half of 2016.

What does it mean for franchisees?

Gary Alford, CEO (commercial) at RFG, said “Our topline message for franchisees is around being able to integrate businesses, which translates into scale and the benefits of purchasing products.”

Keeping prices down and offering synergies is fundamental to the business, said Nell.

RFG is also changing its training model for franchisees, creating an ongoing program with online learning opportunities. Traditionally there was training only on the five year renewal, said Nell, now there are seven modules to complete over a three year period.

The focus is on ongoing upskilling.

Alford said “We go to them, there are training events in every state.”

Plans for 2016

Looking ahead to 2016, the focus for the traditional brand systems is enhanced ecommerce and the digital offering for customers. There will also be regular innovative product development including day-part initiatives.

In the QSR division the Crust Gourmet Pizza Bar business will be focused on product and promotional innovation, with local area marketing tactics in partnership with franchisees. Outside the Queensland, northern New South Wales and Western Australia strongholds for Pizza Capers there was rationalisation and store conversion, affecting the overall performance – Pizza Capers will be driving customer engagement in the year ahead.

There will be a lesser reliance on shopping centres for the coffee retail division, with alternative sites such as drive-throughs part of the expansion plan. Project Evo, already undertaken by Donut King and Michel's Patisserie and evolving the brands in response to retail and consumer trends, will be piloted here. 

Internationally expect to see greater presence from Gloria Jean’s and Cafe2U.

In the mobile sector, Cafe2U has outlets in NZ, South Africa and more than 70 in the UK.

The mobile division is expected to have more than 25 new outlets next year, and in the first half of 2016 will launch The Coffee Guy container outlet model for business parks, a low cost entry for franchisees, and first introduced in New Zealand about three years ago.

Around the world, opportunities for the franchise brands to grow are focused in India, the Gulf , China, the UK, US and Eastern Europe.

China, Malaysia, and Turkey each have introduced more than 10 new outlets in the second half of 2015.