A successful food service franchise knows that its growth requires well-trained, highly motivated franchisees - and that takes effort and consultation.
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Chief Executive Officer: Rod Wakefield
Company: The Coffee Club Group
Business type: Retail hospitality franchise group
Founded: 1989
Employees: Corporate office: 30; franchisees/staff: about 4500
Turnover: (2006 - 2007) About $180M
Head office: West End, Queensland
Contact details: +61 7 3010 3000
The Coffee Club Group Story
When Rod Wakefield was made CEO of a franchised cafe business, The Coffee Club, in 1998, he was determined to work with his board to develop a leading franchise business. When Wakefield arrived at The Coffee Club it had 30 franchises and turned over about $25 million.
Nine years later, the group has 180 stores and turnover is about $180 million. It has come a long way since the founders, Emmanuel Drivas and Emmanuel Kokoris, opened their first store in Brisbane in 1989.
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Key learning points:
- Consult - Communicate with franchisees on the basis of trust not hierarchy and compulsion.
- Training - Teach franchisees how to do their jobs as well as how to manage their businesses.
- Mission statements - What kind of culture are you trying to create? A mission statement should help staff or franchisees to live your organisation’s philosophy.
- Holidays - Plot your leave in your diary at the start of the year - before other appointments.
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Wakefield’s career had included work in education, as CEO of Amies the Family Jewellers chain and as an internal consultant at World Vision. This background led him to develop a consultative relationship between franchisor and franchisee and a curriculum-based franchise management training program.
He says: “You know a lot of franchisors say: ‘We’re the franchisor and you’re the franchisee; we’ll tell you what to do - and if you don’t do it, we’ll breach you’.”
The Challenge
The Coffee Club franchisees come from many different backgrounds with a wide variety of skills. Wakefield realised that The Coffee Club needed to improve its training: franchisees needed to be taught not only how to make an excellent cup of coffee and delicious food but also how to run their business. Wakefield says: “Franchisees must know how to work in the business and how to work on the business.”
The Solution
Wakefield, whose several degrees include an MBA, used his education background to develop a six-step building block system that is taught over six weeks. In order of importance, the blocks are:
- Mission and core values
- People issues
- Marketing issues
- Operational issues
- Property management
- Financial management
Each topic has its own textbook, workbook and a disc developed in-house. Wakefield says: “I don’t know of any other franchisor who does this. The franchisees come out as mini-general managers.”
The mission and core values blocks teach franchisees to live the company philosophy. The mission is to provide a welcoming, relaxed, meeting place that enriches contemporary lifestyle and provides good food, great service and excellent coffee. The core values insist that everyone within the organisation treat each other as customers.
Wakefield says morale is central to store success. “If there’s a problem in your own relationships, you bring that to work. If it’s a problem in the store, how on earth can we expect someone to serve a customer appropriately if the morale in the store is low? Our top stores have fantastic morale.”
In an industry where 80–85% of staff are casual workers, the people building block teaches franchisees about recruitment, selection, training, development, industrial relations issues, human resources management, coupled with leadership and management.
The operations textbook teaches franchisees how to make the perfect cup of coffee and the perfect meal. The property module covers aspects such as franchise agreements. Financial management covers everything from financial statements and bookkeeping to key ratios and benchmarking. And the marketing manual covers issues such as promotional strategy.
To develop and maintain the morale of each franchisee, Wakefield used to visit each store twice a year. But as the franchise system grew, demands on his time made this impossible. He now visits each franchisee once a year for one to two hours.
As the franchise continues to expand Rod says he will have to mentor key people to do the work. Last year, he made sure he put his recreational and vacation time in the diary first.
The Result
The six-block training system has cost The Coffee Club a lot in time and money. But the results are clear. The training course helped one franchisee take over a store in Brisbane and turn it from a $10,000 per week concern into an $18,000-a-week business within three months; a store in Melbourne recently sold for $1,000,000, up from its purchase cost of $570,000.
The Coffee Club’s international expansion has begun in New Zealand and discussions are underway with potential franchisees in Korea, Dubai and Thailand.