Franchise success

13 February, 2009
The fastest growing bakery retailer in the British Baker Top 50 league table puts its growth spurt down to opening franchise concessions and baking-off in-store. Georgi Gyton finds out how they went about it
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Jumping up six places in British Baker's Top 50 bakery retailers table this January, was UK coffee chain Coffee Republic. Currently at ninth place, up from 15 last year, the firm has seen massive expansion in the last year and shows no signs of slowing down.
It may still be behind Starbucks, Costa Coffee and Caffè Nero in terms of store numbers, but it managed to more than double its estate in 2008, from 102 outlets at the end of 2007, to just over 200 stores at the start of 2009. And it plans to achieve a total of 250 outlets by the end of the year. So what is the secret of its success? Successful franchising it seems.The coffee house, established in 1995, has franchised outlets in the UK, as well as concessions in Cineworld cinemas and pub retailer and brewer Greene King. According to head of franchising Kath Cooper, the expansion was achieved due to an aggressive recruitment marketing programme throughout 2006 and early 2007, as well as a drive to find suitable concessions partners, which saw them strike the deal with Cineworld."Our concessions department grew from 36 at the end of 2007 to 111 by the end of 2008, and Coffee Republic will continue to grow its concessions profile in 2009," says Cooper. "Our strategy is to target different market sectors over the year, with the opportunity to add incremental sales through our premium branded coffee offer."In terms of bakery, Coffee Republic offers a wide range of products, including traditionally popular pastries such as croissants and pains au chocolat, and it believes the quality of the food is equally as important as the drinks it offers. "We bake most of our pastries and baguettes, from raw, frozen dough, in-store daily," says Cooper. "Where we gain the edge on our competitors is by baking fresh every day."The company says it always tries to improve its food range and introduce new products. "We wouldn't compromise on the quality we provide to our customers, no matter how tough the market is. The best way to drive footfall into our stores is to offer our customers some special offers and promotions on the products that we provide to them."Cooper says the business has felt the threat of other high-street coffee chains, but that this can often be used in a positive way. "For example, Christmas 2006 was all about the gingerbread latte at Starbucks. Guess what drink we included on our Christmas 2007 menu?" One of Coffee Republic's strengths is its ability to change procedures or promotions quickly, she says. As with a lot of businesses, the UK's current economy has stifled expansion plans somewhat. "Potential investors are being cautious, as are the banks and other financial institutions," explains Cooper. "What we have found is that we are attracting candidates from different backgrounds - for example, candidates who are now coming into the system have good operational experience but, due to the current climate, have faced redundancy or have simply not found a suitable job. Franchising is a good option in this environment."The chain has also expanded its reach into overseas coffee culture, with franchises in Malta, Dubai, Bulgaria, Kuwait and Turkey to name a few. Cooper says that, despite the fact many people put the popularity of coffee shops down to them often being focal points in US television series, such as Central Perk in Friends, few people realise that coffee houses actually originated in Turkey."Coffee Republic has international operations in nine countries, with further expansion plans in place for Asia, Europe and the Middle East," she says, adding that it's the business' aim to cater for the varying tastes of the different cultures in which it is located. Coffee Republic may not be about to knock Costa from its number three spot in the current Top 50 table, but it is definitely going to try.



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