- Players: Adriaan de Bruyn (left) and Kobie Malan
- Franchise: The Daily Coffee Café
- Established: 2013
- Visit: thedailycoffeecafe.co.za
In 2013, banker Adriaan de Bruyn gave up his job in the risk management department at Capitec Bank and decided to take his friends’ advice literally.
“They always made fun of me saying: ‘You’re sitting in coffee shops all the time, why not buy one so you can have coffee for free?’” he says. Today Adriaan is the Group CEO of The Daily Café Group and has expanded his coffee café franchise faster than he ever dreamed possible.
Entrepreneur sat down with Adriaan to uncover his formula for success. And it goes far beyond The Daily Coffee Café’s exclusive coffee blend and modern-meets-rural atmosphere.
How did the idea of The Daily Coffee Café come about?
I researched why only some coffee shops do well. The answer was what I’ve built the success of The Daily Coffee Café on.
People go to coffee shops to connect — food and drinks are secondary to the experience. I didn’t just want a typical coffee shop.
I wanted an atmosphere that would attract men and women. I told my brand designer I wanted an industrial look, with copper, steel and wood and dubbed it New York meets Karoo.
Related: Coffee Shop Business Plan
Describe The Daily Coffee Café’s growth path
After opening the first store in Paarl in 2013, it immediately took off. I opened another and it also did so well that my third café followed 18 months later. Patrons enjoyed what we offered and their interest in the concept was so overwhelming that I decided in 2015 to franchise the business.
I had my systems in place for profitability and no other coffee chain in South Africa offered this trendy and modern type set-up. They all looked like one another, even serving the same tasting coffee. It was time to introduce something with appeal.
Kobie Malan joined me as my business partner and together we focused on expanding our franchise nationally.
Our objective is to continue growing in all the major locations in South Africa and to bring our franchise concept within reach of all South African franchise investors.
Who is your ideal franchisee?
It’s important that the franchisee relates to and buys into the franchise; someone who’s willing to follow the rules and follow through on our systems.
We know what works and what doesn’t. But as we also encourage independent thinking, franchisees are given 10% leeway in what they want to offer.
Distinctive specialties are allowed in addition to our standard menu. For example, some of our cafés are located close to gyms, so their menus are tailored to the lifestyle and dietary preferences of these patrons.
Why is The Daily Coffee Café a solid franchise investment?
Not only the individual parts, but particularly the combination of what we offer makes investing lucrative and rewarding.
It’s affordable. For a financial outlay from only R900 000, the franchisee gets a stylish turnkey start-up business, operational within 45 days.
Growth is certain. The investment is made in a fast-growing and sustainable café life industry in South Africa where there is increasing demand for good coffee. And it’s made in our established and sought-after brand.
We offer dedicated skills transfer and back-up. Franchise fees are not fixed, but linked to turnover at 5%. It’s therefore just as important for the franchisor as it is for the franchisee that the franchise is successful and profitable.
The bottom line? An average return on investment of 48% is not to be sneered at.
How important is a new menu in the franchise landscape?
We feel good when we continually delight our clientele. We therefore vary our menu three times a year to provide for seasonal adjustments and to offer only the freshest ingredients. We consider what’s trending in the marketplace and, most importantly, we listen to, and implement feedback from our patrons.
Our policy to adjust our menu and our ability to do so with ease is a competitive advantage.
How much does purchasing a Daily Coffee Café franchise cost?
The capital investment is from R900 000 (excluding VAT) for a full turnkey café. A further R80 000 should cover the rental agreement deposit, opening stock and initial working capital.
No joining fees is required. Those who have bought in believed in our business even before committing to it. There is no need to pay to prove that.
What kind of training and support does The Daily Coffee Café offer?
During start-up our full team is involved to prepare the café for opening day. This includes shop fitting, recruitment and skills transfer to all members of staff. We also ensure that they understand and buy into the ethos of the business.
Our executive head office team consists of an operations manager, two corporate chefs, a corporate barista, a brand developer and a content writer, with Kobie and I actively leading the way in supporting our franchisees in matters ranging from managing their businesses through to quality control and refresher training.
Talk us through your expansion plans
Besides our home territory — the Western Cape — our objective is to escalate our expansion in KZN and Gauteng because the market between Cape Town and the main centres in these provinces isn’t that different.
We’ll continue to select smaller and modern boutique style shopping centres as locations for our cafés. Not only does the upmarket nature of these premises complement our stylish character, but it allows us to really showcase The Daily Coffee Café as the ultimate neighbourhood rendezvous where good coffee and pleasant company go hand in hand.
What makes The Daily Coffee Café unique to other coffee shops?
Our coffee is uniquely blended for us and is a special combination of beans that offers a cup above the rest.
Many coffee shops make the mistake of not playing for the crowd anymore. We blend our coffee specifically to go well with milk as 50% of our sales are cappuccinos. We’re not just selling good coffee or food, we offer an emotionally inviting space where patrons enjoy quality time with friends, conduct business discussions or enjoy precious me-time moments.
Besides free WiFi and comfortable chairs, every café has snug couches that add to the homely feel. In fact, interested franchisees often comment on how they felt at home when they first entered our cafés.
What does a franchise cost?
|Establishment cost||R900 000
|Initial stock cost||R30 000|
|Monthly royalty fee||5% of turnover|
|Average store size||150m2 to 200m2|
|Recommended staff||Up to ten, including manager|
|Average time to breakeven||Within three months|
|For more information email: firstname.lastname@example.org or visit www.thedailycoffeecafe.co.za.|
Get Your Franchise Running Smoothly – Even When You’re Not There
Does the thought of taking time off from your franchise outlet make you nervous? Then you have to learn to run your business instead of letting it run you.
“A sign of a successful business is one that can operate without your physical presence 24/7,” says Brad Sugars, start-up expert, author and founder of ActionCOACH. While your franchise systems and operations are designed to run smoothly and consistently, is your staff trained to be productive in your absence?
“Franchises are already by nature systematised operations, so it boils down to how you as a business owner hire and train people to get the necessary jobs done,” says Sugars.
If you know a sick day will cause havoc in your store, an assessment of how you’re running your business is needed. Are you really running a successful franchise if things fall about without your supervision? Take a step back and consider the following steps to manage your franchise without it controlling your life. Pretty soon you could book that vacation.
Determine your role in the franchise
Are you managing the franchise, taking orders, doing admin and handling every other aspect of the business? Then you’re not hiring the right people, because those roles should be filled by people who can be left to carry them out unsupervised.
“And if you don’t have the right people for the job then it might be time to start hiring, so you can free up your franchise’s most valuable resource – you,” says Pieter Scholtz, co-Master Licensee for ActionCOACH in Southern Africa.
“You need to get an idea of how you can hire people to take repetitive or administrative tasks away from you. Ask yourself: ‘Do I really need to be doing this?’” says Sugars. Your business cannot run optimally if you’re the single most-knowledgeable and capable person there.
Lead with clarity
You have long-term goals for your business, perhaps even acquiring more locations and running multiple units. While growth is good, you need to share the load and ensure everyone employed in your business is working towards the same goals, otherwise, it’ll be difficult to get there. Sugars suggests asking yourself the following:
- How will you make your vision a reality?
- What makes you different from other franchisees and business owners?
- What kind of team do you want to recruit and create?
- How does all of this deliver value to your customer?
Conveying your vision can help ensure employees know how to get to the end-goal faster and more efficiently.
Plan for long-term cash flow
Loyal customers ensure a constant flow of cash through the franchise and this requires exceptional service and the building of strong relationships. “Target your top-spending customers and establish a good relationship with them for long-term cash flow,” Sugars suggests.
Although the broader campaigns are covered by the marketing fee you’re paying to your franchisor, it’s wise to focus on your local’s tastes and suggestions when looking to deliver an experience worth returning for.
Are Your Employees On Board With Your Franchise’s Brand Promise?
You cannot run a successful franchise if your staff isn’t aligned to the brand’s values.
Are the people who work in your franchise outlet familiar with the franchise’s brand promise? As a franchisee, you’re required to deliver a uniform experience, so any customer who walks through your door feels like they’re at the same store the franchisor has across multiple locations. If your employees aren’t able to embody the franchise’s brand promise at every interaction, you have a challenge on hand.
“If your company’s brand promise is a warm and friendly atmosphere, you can’t deliver that if your employees aren’t warm and friendly,” says Robin William, Senior Practice Consultant at Gallup.
“Selecting the right employees is essential to providing the right brand service. Hiring people who can’t behave the way the brand wants them to will doom a service initiative.”
When employees know what’s expected of them, they’re able to keep the promise the franchise makes to customers – leading to higher customer and employee engagement, trust, and revenue.
More than a mission statement
Even if you’ve ensured every one of your staff members know the brand’s mission statement, how can you be sure they’re able to exemplify it in their behaviour every day? William suggests that you do the following:
- Create structures and mechanisms to consistently instil brand values in the franchise’s culture.
- Discuss brand behaviours daily.
- Demonstrate brand behaviours yourself every day.
- Praise the efforts of individuals who demonstrate brand behaviours.
- Hold employees accountable for not exhibiting brand behaviours.
Once you’ve clearly defined the right brand behaviours, it’ll be easier to have staff on board who deliver your franchisor’s brand promise.
Internalise the culture
Here’s a conundrum. Do your staff know what to do in a situation where a customer’s request might not be aligned with the brand promise, but the brand promise is always to deliver on customers’ requests? It’s a tricky situation, but if you’ve clearly articulated the promise, your staff will know how to “Behave the brand”, says William.
“Do whatever it takes to deliver on its brand promise. Whether it’s focusing quality, fast service, customer care, or low prices,” he says.
“Employees must execute brand and service behaviours consistently, and frequent reminders can help employees understand and internalise these behaviours.”
Empower your staff
Investing in your staff is the best way to encourage them to act in line with your brand’s promise. Once they understand why it’s important to act along the lines of your brand, they will feel empowered and motivated to do so.
Starbucks trains employees to memorise customers’ names and preferences in line with their promise of making everyone who visits their stores feel at home. Apple’s strategy of hiring nice, smart people who are passionate about service and the product aligns with the company’s belief that knowledge can be improved, but personality cannot.
How To Write An Operations Manual For Your Franchise
After establishing that your business is franchise material, ensure you’ve created a clear roadmap to success for your franchisees.
Documenting the replicability of your business is key to launching a viable franchise operation. Without manuals and instructions on how exactly you carried out your concept to its current level of success, your franchisees won’t accomplish the results you anticipate.
“Unless you can capture your business on paper, you cannot claim to have a business system to sell. Even detailed documentation may not be enough,” says Franchise Direct’s Lorraine Courtney.
“You may need to provide structured education programmes for new franchisees and their staff to teach them your business system.”
With the help of an experienced franchise consultant, you can devise the critical document that contains all the aspects of what make your brand successful.
Why you need a franchise operations manual
If you’re second-guessing the importance of crafting an operations manual, then you shouldn’t go into franchising. “Your operations manual is your go-to document for deciding who is responsible for what in any franchisor-franchisee relationship,” says Dani Peleva, Managing Director at online marketing agency, Local Fame.
According to Peleva, your manual should generally include each franchisee’s contractual obligations to you as well as the complete details on how you expect them to fulfil these obligations.
“On a basic level, it tells your franchisees what you expect of them. It gives them all the information that you’ve accumulated while operating your franchise,” says Peleva. After familiarising themselves with this manual, franchisees should know how the information can be used to build their own business up to be as successful as the original store.
What an operations manual will do for your business
When all your franchisees know what’s expected from them as they run their respective locations, the entire brand is then able to provide a cohesive, coherent customer experience, which is crucial to your success as a franchisor.
A good manual will also help you build better relationships with your franchisees as they won’t need to constantly contact you to clarify aspects of the business they’re not sure of. If they’re applying the information in the manual, they should know everything you know about how to run this type of business, meaning they’ll make good profits – for you and themselves.
“One of the steps most potential franchisees make before signing an agreement will be to contact your other franchisees. A strong manual will help your current franchisees return positive feedback,” adds Peleva.
How to decide which elements to include
Obligations detailed in your franchisee agreement will have to correspond with steps on how to achieve them in your franchise manual. As a new franchisor, you cannot be expected to have a manual as thick and wordy as your established counterparts.
Peleva suggests covering aspects such as:
- How to set up a franchisee location and start trading
- How daily operations will be conducted
- How development or expansion will be controlled.
“Your operations manual should always include as much detail as possible regarding operational practices that are to be followed,” says Peleva. “A simple list item that states ‘this obligation must be fulfilled’ is not helpful. Looks always to the ‘how’ of the issue and you’ll cover everything you need to.”
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