What started as a bakery café in Greenside, Johannesburg ten years ago is fast becoming a sought after restaurant franchise with its sights set on various trendy spots throughout Gauteng and eventually expanding to other parts of the country.
Doppio Zero owner, Paul Christie, moved to Johannesburg in 1992 after studying in Cape Town. He opened a number of convenience stores and small restaurants, but it was in 2002 that he and his business partner, Miki Milovanovic secured the Greenside site. Christie explains that at the time, the site didn’t have restaurant zoning and Milovanovic had a baking background, two factors that combined to create a great business opportunity.
“We got around the restaurant zoning issues by opening a bakery with tables,” he says, adding that the concept was very well received as there were no café bakeries at the time. The store got busy and the demand was there for evening trading, so the owners decided to extend it beyond the store.
Offering Something Different
Christie’s Greek family, coupled with his partner’s skill, meant the pair had significant experience and access to bakers. According to Christie, his family was involved in developing the recipes for Doppio Zero’s meals. He says the concept for Doppio Zero is that of a casual eatery. “We try not to be too formal. We offer good food in a bistro environment.”
With a refined concept that was becoming increasingly popular, Christie and Milovanovic opened two more stores in Bedfordview and Fourways. They later decided to franchise these and then opened the Rosebank branch as a franchise store.
Developing the Franchise
Turning Doppio Zero into a franchise was always a debate, says Christie. They first looked at the joint venture model, but the structure couldn’t handle the growth. “We looked at outsourcing, but didn’t have the capital to open shops,” he says, adding that a restaurant is a more challenging model than franchising a takeaway business.
Once the first three stores were opened, all owned by Christie and Milovanovic, the business was becoming difficult for them to control, and Christie says they didn’t have the infrastructure needed to run the three operations concurrently. The owners met with Franchising Plus who took them through the necessary steps of franchising their business. Christie says it was an “interesting process” that saw them having to develop an operations manual, recipe books and more. “It is an evolving, ongoing process. We never sit still as there are always new laws, systems and ideas.”
For Christie, the starting point was finding good people that he could teach the systems to. They didn’t necessarily need experience in running a restaurant but had to be good at dealing with customers.
Doppio Zero now maintains a balance between franchised and co-owned stores. “The restaurants we are running allow us to understand the business because we are in it,” he explains. There are currently eight stores in total, seven of which are located in Johannesburg and one in Cape Town. Four of the stores are owned by franchisees, two are company owned and the other two are joint ventures.
Growing the Brand
Christie admits that growth through franchising has been slow. He attributes this to the difficulties facing business owners when trying to access money and negotiate with landlords. Banks are making it harder for potential franchisees to secure loans and landlords are charging inflated prices to lease property.
Notwithstanding these challenges, Christie says business has been satisfactory, with the group’s results up by 13% on the previous year. But, 2011 also saw the closure of two restaurants in Cape Town due to the franchisees’ financial circumstances. Christie says the decision was made to keep the brand in Gauteng to get the systems more refined before looking at Cape Town locations again. The only remaining restaurant in Cape Town is located at Mandela Rhodes Place.
But, in Johannesburg, the flagship stores, namely Rosebank (which is the biggest) and Greenside, are booming. A new store will open in the new section of Sandton City shopping centre later this year.
Christie says the process of growing the Doppio Zero franchise has always been an informal one, but this is changing as new procedures become more structured. The product is the same in all restaurants, but the atmosphere and set-up vary. “We are looking at making this more consistent. In the beginning we wanted every restaurant to be unique, but this doesn’t work in a franchise environment.”
According to Christie, the menu is consistent, as is the quality of food and service. In all the restaurants, he wants to express the European café culture. One area that does allow for a bit of flexibility is the retail side. “Franchisees can be more proactive on the baking side, but the bakery only accounts for about 20% of each restaurant.”
The Business Concept
The ideal location for a Doppio Zero restaurant is a combination of numerous factors, which Christie lists as character, availability of outside areas, vibe, atmosphere, proximity to other businesses and residential areas, and parking space. “We need to make it more of a science; now we rely a lot on gut feel. The overheads of running a restaurant are high, so we need high turnover. The turnover of ten years ago is now what the wage bill is so the location has to be right for the brand, but also have the potential for high foot traffic,” he explains.
During the day, Doppio Zero positions itself as a café bakery, and in line with this stays away from accessories like table cloths, but in the evening it has more of a casual dining feel offering sophisticated food, which Christie calls ‘interesting food’. “We try to keep the menu local so that the restaurants are seen as a local hangout, but the meals are generally Mediterranean/Italian so we try and stick to that.”
Going forward, Christie says the group is going to establish a central bakery which will supply most restaurants, but that some will continue to bake their own products. He says the reason for this is the high electricity costs and scarcity of skilled staff. “It doesn’t always make sense to have a full bakery, but it is part of our character so we won’t take it away completely,” he adds.
While Christie considers competition in the market to be a challenge, he says it is a good one as it keeps the industry going. The rise of new entrants into the market is positive as it forces businesses to improve and differentiate themselves.
What differentiates Doppio Zero from its competitors is the menu and the bakery element. “The menu is a big factor, in terms of the dishes offered and the way we cook.” Another strength is that the restaurants offer a non-threatening atmosphere. “We have a diverse customer base, ranging from guys in shorts to tuxedos.”
According to Christie, the target market is adults aged between 26 and 40 years old in the eight to ten LSM bracket. However, he says the restaurants are becoming more and more popular with families, which was never intended. This could lead to more child-friendly stores in future.
Finding the Right Franchisees
Many people have approached Doppio Zero because they are interested in becoming part of the brand, says Christie, but the challenge is finding people with the right experience and the cash required. Christie explains that if he finds an operator with all the right skills but they don’t necessarily have the cash, he tries to find an investor. “We try to give them the chance to get into the business if they show that they are really passionate about it.”
Christie says a lot of enquiries come through the Doppio Zero website.
The first step requires franchisees to fill in an application form. If the franchisor is happy with the information provided they will set up a meeting with the potential franchisee and then make a decision about whether or not to go forward with them. According to Christie a new process has been introduced which requires the franchisee to secure the lease first. As the franchisor, Doppio Zero will assist the franchisee with negotiating rentals, training staff and building the restaurant. New franchisees are trained in other stores for between one and two months, while new staff are trained for between one and two weeks.
Christie says the success of Doppio Zero is due to its high regular customer base, which has ensured consistent growth. But adds that the focus for the group will be on the head office structure. Another important aspect will be maintaining the standard of food throughout the franchising process. “We have to keep a certain amount of integrity with our cooking methods.” Doppio Zero will be looking at moving towards more responsible buying, including free range or organic products.
The next phase, he says, is to present food in a more appealing way while still offering good value portions. Christie says the group chef is constantly developing new ideas for the menu and the restaurants will soon be introducing smaller portioned helpings during the day at lower prices. Christie believes that the Doppio Zero brand remains relevant with its target market by innovating. He adds that better training techniques and good front of house staff are important, as is keeping the stores fresh. This is done by renovating the stores every three to five years.
In terms of opening new restaurants, Christie says the focus will be on opening smaller Doppio Zero bakery sites in Pretoria as well as the West and East Rand of Johannesburg. “We want to focus on those areas now and in 2013 we will start looking at Cape Town, KwaZulu Natal and other areas of South Africa. We want to grow Doppio Zero into a national brand so we are going to be putting our foot on the gas and opening more franchises,” he says.
The Importance of Customer Service
Offering the customer a pleasant, unforgettable experience is key in the restaurant business. This is something Christie knows all too well. “The big thing with restaurants is people. You are only as good as the last experience a customer had.” While the restaurant is operating, usually from 7am to 10pm, there are many opportunities to give great service or miss the boat, says Christie, adding that customers should be regarded as guests.
Apart from driving training programmes for waiters, Doppio Zero is also proactive when it comes to customer complaints. “If someone loves a place, they will tell a friend, and word of mouth is so important for the business.” Christie says a lot of feedback is received through the group’s website and that an effort is made to address it immediately.
He claims that with 95% of the issues raised, Doppio Zero is able to turn disgruntled customers around. He says a franchisee can’t be controlled, but people can be directed to company stores. Franchisees, however are trained to get customers back.
“We all make mistakes, but it is the way we recover that counts. What really angers people is when a company doesn’t care. Service is a very big thing because people have other choices.”
The origin of ‘Doppio Zero’
The name, Doppio Zero, means double zero. This is a grading of flour in Italy. Type 00 is a fine flour which the restaurant group uses to make its pizzas and pastas.
The Doppio Zero franchisee
The ideal Doppio Zero franchisee has restaurant experience and the ability to manage people. Paul Christie, founder of Doppio Zero, says the right character can make it work. He explains that the restaurants are very people intense businesses, hiring between 35 and 60 people. “A franchisee needs to be capable of managing the process.”
Besides staff, they should also be able to handle customers. According to Christie, this takes a certain kind of personality and it’s easy to recognise whether or not a person has the right skill. Another characteristic he looks for in a new franchisee is compliance. While franchisees should think for themselves, there are certain set systems and procedures they are required to follow.
“The best franchisees are those who challenge us the most, they keep us on our toes.” Of course, he says, they have to work hard and be programmed to working hours that most people don’t work. Doppio Zero favours owner-managers as they should have a vested interest in the business.