16/06/2011 - 00:00

Franchise model fits for Croissant Express

16/06/2011 - 00:00

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CROISSANT Express opened its first Perth outlet in 1987, entering a marketplace that offered significantly fewer options than consumers enjoy today.

Franchise model fits for Croissant Express

CROISSANT Express opened its first Perth outlet in 1987, entering a marketplace that offered significantly fewer options than consumers enjoy today.

The business has changed hands since then, but current general manager Glenn Evans said the basic premise of the business hadn’t altered – a focus on espresso coffee and home-style takeaway food.

Croissant Express was built on strong store coverage of the CBD market, and when Mr Evans took over the business in 2004 he recognised the growth opportunities in the suburbs.

A franchising model was adopted as the best way to achieve this growth, so as to avoid spending unnecessary time travelling between corporate stores.

“Our operations team was constantly being distracted by the day-to-day running of a business, and that is becoming less and less as we divest these corporate locations; we can focus our attention on supporting the franchisees,” Mr Evans said.

“We know it is very difficult to staff ‘out-of-line’ locations, so franchising really is an opportunity for us. That was our motivation – how do we grow our business quickly?”

It was when the business was coming out of the GFC in 2009 that Mr Evans realised the number of franchise locations outweighed corporate locations.

“You are really at the crossroads then, do you want to be a franchise company or a corporate body,” Mr Evans said.

Three corporate locations remain in the Croissant Express portfolio of 23 stores, and Mr Evans said it was likely the company eventually would divest itself of all but one store, which it would retain for training purposes.

The company is still in the throes of growing into ‘better franchisors’, according to Mr Evans, and developing the staffing model had been an important element of this.

The intellectual property held among Croissant Express staff – some of whom have been with the company since it was established – is significant.

“The IP they own in their hearts and minds is invaluable,” Mr Evans said.

Having those staff on board has also helped with developing franchise locations.

“These are high-value locations and subsequently not necessarily attractive for an owner/operator type business. We had lots of loyal, dedicated senior employees so we have very successfully managed to partner some of these long serving employees with investors who are looking for a passive investment,” he said.

During the past 18 months, the business has opened eight more stores and Mr Evans is confident Croissant Express will reach the goal of having 25 stores by its 25th year in 2012.

The company is aware of its core market – more often than not the time-poor office worker who wants a quick take away lunch – but has experimented with different markets from time to time.

Mr Evans said a move to open a new, more relaxed type store taught management a good lesson.

“It is a matter of focusing on what we do well, we cater to a time-poor customer who is in a rush ... that is the convenience offering we have,” he said.

The business has used its shopping centre locations, including Garden City, to extend its coffee offering, but has remained focused on the take away market in the inner-city locations.

“We dipped our toe in non-traditional marketplaces and what we have found is often Croissant Express customers are heavy users throughout the week, but on the weekend they are not necessarily looking for that option, and we don’t compete as well in those marketplaces.”

 

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