Coffee on the side

flatwhite2

OK, this is a bit long-winded so I will condense as best as possible.

I'm looking into purchasing a franchised business.........dont worry, its not a gloria jeans or anything like that. Without disclosing too much I am looking at a service based business where a portion of the business is people coming to the store and having things 'fitted' while they wait.

Where coffee comes in is I had the thought that while the customer is waiting I could give them a card / voucher which I had pre-purchased from a nearby coffee vendor. I would expect if I discuss with a local vendor and produce some cards which bear both company logos and purchase say 100 at a time then the price to my business should be significantly less than full retail.

Then I thought that maybe [and this really depends on whether there is a coffee vendor convenient to the business location and whether there is sufficient frontage at the site] I should segregate an area of the store as though it is a completely separate tenancy and start my own shop, not only to service customers and of course my own caffeine requirements but as a standalone shop to catch passing trade also. Being merely an enthusiast at this stage I would employ a barista/manager to start then get trained up myself so I can get involved if needed.

So my questions are:
What sort of discount should I expect if purchasing coffees 'wholesale' as suggested above?
Is anyone aware of a similar arrangement and can advise pluses and pitfalls?
Is it stupid to consider starting a second business in this fasion?

psaigh

Stepping away from that which you already know about (your franchise) and towards that which you don't (the coffee) will always yeild a higher risk. On top of this (thinking worst case scenarios), setting up your core business to be reliant on one (or a couple) of hired help (ie/ the baristas) also increases the risk factor. In general I love the idea of combined business'. It gives the coffee customer something to look at/think about while enjoying their coffee and gives the store customer something to do whilst waiting for his/her product/service. There's something about waiting and coffee that goes hand in hand. GJ's have signed national deals with both borders books and myer regarding this kind of symbiotic business structure, which i think shows (at least grounding) for a trends in this direction. I know myself that i've approached various different business' to suggest such an opperation, with rental worked out either by way of a fixed expense or percentage of turn over. I would be wary though of trying to put too much on your plate. There is a lot more to the coffee business than most new opperators (especially those looking for a 'sea-change') recognise. It might be worth speaking with some other proven operators to see if they'd be willing to take on the coffee side of the business leaving you more time to focus on what you do well. Having said that, if you feel confident in your ability to manage both, i think the idea could really appeal to your customers. Best of luck whatever you decide

flatwhite2

GJ's have signed national deals with both borders books and myer regarding this kind of symbiotic business structure, which i think shows (at least grounding) for a trends in this direction.

Now that you mention it, through previous business contacts I had heard from Brumby's that they had a very succesful partnership with 'The Warehouse' in NZ. Over there the warehouse stores are more like supermarkets than here in oz and they have a deal where Brumbys operates a bakery inside the store as a separate business. All the sales go through the main registers, the brumbys operators then get their sales less the rental....not sure on commission but from the warehouse's point of view they offer their customers an in-store bakery with 0 cost and make rental income, perhaps not as much money as operating their own bakery but with no startup or ongoing maintenance costs.

psaigh

That just sparked another example in my head, though not entirely related. BP (the petrol station) have teamed up with brumby's, subway, noodle box, some hot chicken franchise and 'c coffee' to create a full experience when filling up. I guess it's also a good way to supliment the high rental involved in running a petrol station.

cofffeee

Moving along from the current discussion. My office would probably slurp through somewhere in the order of 150 cups a week. We would like a good drop each time. We have a semi automatic machine that needs constant attention. There is a thought that we should get a serviced machine. ie beans etc are SEP. (someone else's problem). We are keen to pay for this type of service. So, who does this? Who has one of these? We are not in a CBD or anything. Sort of a wasteland in the nation's capital. :-[

askthecoffeeguy

try speaking to Attilio aka 'Fresh Coffee' of this forum or contact him at Phone: 02 6280 7511 http://www.cosmorexcoffee.com.au He's a Canberra local and what doesn't know about coffee is not worth knowing!