Michelle HammondFollow on twitter www.startupsmart.com.au
Cafe2U unveils 10-year franchisee hiring spree
Mobile coffee franchise Cafe2U has highlighted opportunities in the US market, after announcing plans to appoint more than 1,000 additional US franchisees within the next 10 years.
Founded by Andy Simpkin, Cafe2U has grown from 12 vans in Australia in 2005 to more than 200 vans in Australia, the United Kingdom and the United States.
The company was born on Sydney’s beaches, serving coffee to surfers before quickly expanding to service workers in industrial areas and remote office locations, starved of quality coffee.
After establishing a presence in the UK, Cafe2U turned its attention to the US, which, according to the National Coffee Association, has the world’s largest coffee market, valued at $19 billion.
Cafe2U says its first US franchisees – located in California and Oregon – have exceeded sales projections, partly because the mobile espresso niche has been largely overlooked in the US.
The Oregon-based franchisee is now establishing a second operation in order to meet demand. Meanwhile, Cafe2U is planning to launch in Colorado, Georgia and Texas later this year.
The company says it plans to appoint more than 1,000 additional franchisees in the US in the next decade.
According to managing director Derek Black, there is limited growth capacity in Australia, so going offshore makes sense, and the US appealed because of its size and coffee culture.
“The US market represents a mature coffee market, with many significant opportunities to stimulate growth,” Black said in a statement.
“[For example,] the USA… has a lot of business parks that are a great distance from the nearest Starbucks.”
“Those characteristics fit well with Cafe2U’s model of only operating more than 200 metres from a bricks-and-mortar café. However, the USA is already served by mobile food vendors.”
Black said the US has a long history of food vans servicing businesses, but they typically use large vehicles that take up space and stay for an extended period of time.
“Our model is to be there for ten minutes, then we’re out and back tomorrow,” he said.
Black said despite America’s economic woes, the country is ready for mobile coffee in the workplace.
San Diego was chosen as the location for a pilot scheme, which involved finding and fitting out a suitable van, tests of the company’s coffee blend, and the size of the cups customers expected.
The company also retested its assumptions about customer demographics to ensure the territories it offered US franchisees would work as well as those in Australia and elsewhere.
These tests allowed Cafe2U to fine-tune its offering and search for a master franchisee. Once it found a master franchisee, negotiations began with sub-masters to handle individual states.
“The sub-masters will spearhead the growth. We hope to have 200 units on the ground in four years,” Black said.
In addition to the US, Cafe2U has signed a master licensee for Germany.