The Daily Coffee Group - Business Media MAGS

Sunday Times Franchising Q&A

The Daily Coffee Group

SPONSORED Q&A: Everything you need to know about opening a franchise of this popular coffee café.

How did the franchise start and what is the background of your executives? 

Adriaan de Bruyn, CEO of The Daily Coffee Group, opened the first The Daily Coffee Café in 2013. A further two cafés were opened in the years that followed. De Bruyn conceptualised, set up and personally managed these coffee cafés until he was satisfied that The Daily Coffee Café would be a successful franchise model. He expanded the operation into a franchise business in October 2015.

The collective background of the group’s executive body lies in qualifications and experience in the hospitality industry, operations, finance, retail, marketing, interior design and corporate governance.

When choosing a franchisee, what are the criteria? 

The Daily Coffee Group is looking for the following qualities in its franchisees:

  • a passion and enthusiasm to make the franchise work
  • setting high standards with a drive to achieve them
  • full focus on the business
  • using initiative
  • being passionate about people
  • service orientated
  • relationship builders
  • financial independence.

How much do I have to invest before I can open my doors? 

The Daily Coffee Group offers two franchise models:

  • The Daily Coffee Café: the cost, including the joining fee, is R1.53m (excluding VAT). An additional R60 000 is required as initial working capital.
  • The Daily Coffee Express (food trailer): costs starts from R310 000 (including VAT, ex Cape Town). An additional R10 000 is required as initial working capital.

How much liquid capital will I need to maintain and cover the franchise until it breaks even? 

Breakeven point is usually reached within the first couple of months of operations. Franchisees should not need more than R30 000 to get to this point.

What are the ongoing fees? How do your royalties and marketing fees work? 

Management service fees amount to six per cent of turnover (excluding VAT). We currently do not charge a marketing fee, but may introduce this in the near future.

How financially strong is the franchise company? 

The Daily Coffee Group is financially sound and in a strong growth phase.

How many other locations are there and what is your success rate? 

The Daily Coffee Group currently has 29 franchises countrywide, with a projected total of 40 by the end of 2021 and 50 by the end of 2022.

 How much money can I make?

Franchisees can expect a net profit (before tax) of around 20 per cent of turnover. This could amount to between R40 000 and R80 000, or even higher, monthly. The amount is determined by several factors, including whether franchisees manage their franchises themselves, or whether they employ a manager to do so. We discuss these factors in detail with potential franchisees.

What sets you apart from your competitors?

The Daily Coffee Group offers more than just franchise opportunities. We provide a premium investment platform in South Africa’s high-growth and profitable coffee industry – a business environment where there is an increasing demand for good coffee and branded lifestyle coffee destinations.

The following, among others, differentiates The Daily Coffee Group:

  • Coffee is our business. We know coffee, we know coffee lovers’ requirements, and we make sure that they get what they want. This is what makes the world goes round (and profitable!) for the group and its franchisees.
  • We’ve done our homework. Thorough research and reasoning went into creating the unique look and feel of our coffee cafés – an ambience that captures the essence of café life prevalent from Cape Town to New York, but packaged in a way that resonates well with South African clientele. Part of this is the pleasing and much talked about New-York-meets-Karoo décor of our coffee cafés – a theme that takes patrons on a visual journey where they can expect to come across hints of upmarket Big Apple urbanism, combined with shades of customary down-to-earth Karoo appeal.
  • A destination for every taste. Our coffee cafés transform into what individual patrons want them to be. We offer seclusion to those looking for a me-time breather, a professional setting for business discussions over good coffee, and a relaxed environment where people can meet and where friendships are strengthened. Informal and casual, yet with a corporate elegance and flair.
  • We are suitably located. We prefer to select smaller, accessible and modern boutique-style shopping centres as locations for our coffee cafés. Not only does the upmarket nature of these premises complement our trendy style and approach, but it especially allows us to really show off what The Daily Coffee Café is about and what we offer.
  • The size is right. Our coffee cafés, on average, seat around 60 patrons. Not too big. Not too small. Just right!
  • Franchisees have leeway. We allow franchisees a certain leeway as far as their menu offering goes. Apart from our standard menu, we also have monthly blackboard specials that offer patrons an even wider variety to choose from. Franchisees, furthermore, are allowed to offer menu items specific to the taste and requirements of their particular customer base.
  • A flexible franchise fee. Franchise fees are not fixed, but linked to turnover. This greatly assists franchisees in their financial planning and cash flow.
  • We have the experience. Having successfully started and managed the first three The Daily Coffee Cafés ourselves, we’ve gained the coal-face – or even better – the coffee-brewing experience required to know and understand the requirements of successfully running a business in this industry and to offer the required know-how to our franchisees.

What support do you offer beyond the initial training? 

  • Turnkey start-up with ready-to-go franchises from day one. This includes finding the best location, shopfitting, installing the equipment and recruiting and training personnel.
  • Point-of-sale systems that give franchisees full control over their businesses and finances.
  • Skills transfer and backup from the franchisor. Full-time support from the operational team and from franchise management, who conduct regular visits to the franchises. These members of staff are also only a phone call away, should they be needed.
  • Social media launch programmes are included in the opening of new franchises, while ongoing support is provided to established franchisees running their own social media campaigns.
  • Guidance and suggestions for improvements to individual franchises, based on their monthly financial reports.
  • The franchisor with its experience and authority is directly involved with each franchise’s lease and other negotiations.

How do you resolve disagreements or disputes? 

We have an open-door policy and encourage franchisees to contact any member of the franchisor management, including the CEO, directly when they have matters to be resolved. In doing so we can deal with matters directly and immediately and resolve disagreements effectively. Franchisees and the franchisor are in business together, and an open dialogue is part of the management process.

What are your expectations of your franchise owners? 

We expect franchisees to take full ownership of their franchises, to pour their hearts into it and to follow the franchisor’s guidelines to ensure success in their businesses.

What will my territory be and how will it be protected? 

The locations of The Daily Coffee Café franchises are determined in such a way that their operational areas do not interfere with those of neighbouring franchises.

What kind of input will I have in marketing and advertising? 

Through various training activities, franchisees are equipped to run their own neighbourhood marketing programmes. These programmes are supported with marketing material compiled by the group head office with input from franchisees’, both ideas and requirements.

What is a typical day like for a franchisee?

A typical day starts by opening the doors from around 07:00 onwards and closing between 17:00 and 18:00, depending on the location. We place a high premium on the franchisee to be hands-on at all times, be it in the kitchen, or mingling and interacting with customers in the front of house to ensure their satisfaction and build relationships. Housekeeping, staff training, ordering of stock and administrative duties are done during quiet times.

Can I speak with current franchisees about their experience? 

Certainly! We encourage potential franchisees to first touch base with existing franchisees.

Prepared and issued on behalf of The Daily Coffee Group by:

Johan du Preez

The Daily Coffee Group

E-mail: johan@thedailygroup.africa

Tel: 083 445 0650

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