Rice Workshop is the latest franchise opportunity in the food scene

By Sarah Stowe | 29 Oct 2015 View comments

Westfield Sydney is an icon and benchmark for food courts, says Rice Workshop co-founder David Loh. And that’s why he chose the city centre site to launch in May the first interstate caf_ in the Japanese food retail network.

“The first store outside Victoria is crucial. Westfield wanted us to be in the flagship store.”

Melbourne based Rice Workshop began as an idea to bring authentic Japanese food with a western twist to an Australian consumer at an affordable price.

In Melbourne the two-year old business has seven locations, three more will open by the end of the year (Geelong, Fountaingate and Westfield). Only the company owned Chinatown outlet is a strip shopping site.

All other sites are franchised – the Westfield Sydney outlet will become available as a franchise in due course.

The aim is to take the concept to the heart of the suburbs, hubs of activity such as food courts in shopping centres.

“My partner is Japanese. We saw a niche market in Australia. The concept is Japanese food but westernised, its comfortable, not intimidating," says Loh.

An open kitchen format will allow customers to see the food is freshly prepared. On the menu are protein mainstays beef, chicken, salmon with salads and noodles, and dishes such as stewed beef and poached egg. There’s no sushi but there are seasonal dishes.

“What we do we do well. Burger places keep it simple and do it well.”

Rice Workshop will charge under $10 for most main dishes.

So how does the business keep down costs? Staying local when it comes to sourcing produce is an important part of brand strategy. And there’s little wastage, explains Loh. “The taste comes from the sauce, which we keep a secret.”

The franchisor makes money from franchise fees, and from supplying the sauces.

Cost of goods is about 30 percent, labour about 28 percent of costs, he says. The footprint of the stores keeps rents reasonable and ergonomic kitchens based on Japanese models allow for minimal staff to have all equipment within reach at all times for food preparation.

The smallest store is 30 sq m, the largest 130sq m including seating. This doesn’t include kiosk models.

Getting it right for franchisees

“The original theme is origami. There’s a lot of space to create visuals for our brand and it’s quite colourful. It was very black when we started, now it’s more youthful and more feminine.”

This is in response to the customer profile, particularly in the suburban locations, where lunch time trade caters predominantly for female shoppers.

But however good the designs and the ambience, if the stylish setting doesn’t turn into sales, the business collapses – that’s Loh’s view.

Brand awareness has been developed through social media and in-stores, with a current campaign offering a trip to Japan as a prize.

Australian tastes now have a strong Asian influence, so Japanese food is a very acceptable concept, Loh believes.

Franchisees are mostly owner-operators who don’t need to employ a chef because the food preparation is outsourced.

Loh’s partner Tomahiro (Tom) Suzuki is a chef and responsible for operations and food, Loh is the entrepreneur and manages franchisees. 

“Our brand is quite young and we’ve expanded rapidly.”

Loh is an accountant by trade and he first tried his hand in the hospitality arena running food outlets at university. Then he launched his own brand, a franchised bubble tea chain, Bubble Cup, which he has since sold to one of his franchisees.

Tea evolved into food, he says. “I have a strong interest and passion for food.” Still running under Loh’s guidance is the dessert chain, Dessert Story, launched three years ago and focused on serving Taiwanese and Hong Kong desserts. There are already 12 outlets, mostly franchised, in Australia and the brand has expanded into China and Cambodia: there are two outlets in Cambodia, and five stores in three provinces of China.

Dessert Story has been given cachet in Asia with its Australian tag.

But now the focus is Rice Workshop, Loh says.

“It’s very easy to say expand, but timing has to be right, and you have to have the right partner.”

And why choose franchising as a method of expansion?

“It’s a model where you can get a brand out quickly and it is not financially so restraining. If the concept is acceptable to customers and the franchisee makes money, it works. If they don’t make money it’s bad for the brand.”

For a turnkey operation, franchise buyers can expect an investment of $400,000 to $500,000 depending on size and location of store.

“The aim is to look for organic growth, not open just for the sake of opening. That can be disastrous,” he says. ”We make sure everyone is being looked after, that is more prudent growth.”