Coffee conveyor: how much brings the franchise coffee bars Like Coffee

Co-founder of coffee shop chain Coffee Like Zufar Garipov

Coffee adventure

24-year-old Ayaz shabutdinov — tireless startups. He is the co-owner of more than 20 companies (hostels, barbershop, “coffee to go”, a language school, etc.), eight of which are developing through the franchise. Shabutdinov have relied on social capital — new partners and franchisees it attracts through publications in the business blog “Vkontakte” (176 thousand subscribers) and the clips on the YouTube channel (103 thousand subscribers).

Business in each new area Shabutdinov opens in conjunction with partners. “To be an expert it is impossible, therefore, in every business there is a partner who is immersed in the case,” says Ayaz. The same scheme works and the network “coffee to go” Coffee Like one of the first projects of the family Like. It Shabutdinov launched in 2013, together with the Izhevsk businessman Zufār by Karimovym.

Garipov then just sold his company to produce stone guard stickers on the car and was looking for a new idea for a business. The choice fell on the coffee-bars. It is now Izhevsk, according to 2GIS, has 27 Express stores, and in 2012 there was only one such point. “I was sitting in the car next to the coffee shop and held up a finger — counting how many people pass by, how many glasses a day sold”, — remembers Zufar.

Three months Garipov studied the market, looked for room, and negotiated with suppliers. And then I found out that he had a rival Ayaz shabutdinov already roll out a network of hostels Like, was planning to launch a coffee business in Izhevsk. Entrepreneurs met, decided that in a small town it will be crowded, and agreed to cooperate. In 2013 Garipov and Shabutdinov has registered OOO “Coffee-Like” with equal shares of ownership.

Coffee bar unlike the classic coffee shop sells drinks only take-away: no seats, the range is limited to only coffee and sometimes a small range of desserts. The market for “coffee to go” in Russia, the share is about 50 network marketing companies. Leader in the number of coffee bars network Garipova and Shubutdinov Coffee Like, which consists of 238 points. It is followed by “Cheerful day” with 143 points Red Cup (55 points), Coffee and the City (44 coffeehouses), Take & Wake (22 coffee bar).

Terms of opening outlets in all networks comparable. Thus, the standard lump-sum payment in the Moscow network of Coffee and the City is 290 thousand rubles., a royalty of 3% of revenue, as in the Coffee Like. Red Cup franchise package is 490 thousand rubles., but includes the purchase of equipment (245 thousand rubles), which then remains the property of the partner, the royalty is fixed — 10 thousand rubles. per month. “Cheerful day” offers two packages: for 100 and 490 thousand RUB thousand RUB. (includes equipment, fabrication of stands and a two-week supply of raw materials for coffee), royalty missing. Take & Wake more democratic than others: lump-sum payment for Moscow is 160 thousand rubles., in regions — 80 thousand rubles., € 3 thousand, or 3% of revenue, if it exceeds 250 thousand.

Photo: Evgeny Knyazev for RBC

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Photo: Evgeny Knyazev for RBC

The first three points of “coffee to go” entrepreneurs established themselves and after a couple of months after the start began to sell franchises. “Giants like MacDonald’s and KFC for years worked only in the state and we immediately embraced the half-Russian, — is proud of Zufar. — We told the boys that no guarantees are given”.

A key factor in the popularity of the franchise, the cheapness, the first time it cost only 80 thousand rubles For the first year the company received about 300 applications, mostly from young people 19-25 years. Partners almost never refused. In the pursuit of volumes suffered, recognizes Zufar: franchisees save on coffee machines, with coffee sold pasties, Shawarma and magazines. Open for the first year of 164 points closed 44.

Originally a franchise package Like the Coffee itself was not, says franchisee Coffee Like in Volgograd Daniel Prokofiev: the management company provides only the logo, fonts for design and suppliers contacts. “Not enough instruction from “A” to “z”, we operated largely on intuition,” admits the entrepreneur. Then, the network appeared the ERP system and prescribed standards of operation.

The sad statistics of survival points is forced to reconsider the strategy Garipov ceased to give the franchise to anybody. Franchisee Coffee Like — not College students with no work experience, while middle managers and senior managers, who decided to try themselves in business, says Zufar. Moreover, in the last six months, the founders conducted a “purge” within the network close points that are not the standards. Such franchisees disconnect from the ERP system and propose to change the name. Not all agree — right now the company is suing two former partners.

The cost of a franchise Coffee Like in 2016 increased to 300 thousand RUB: this works as an additional filter in the selection of partners, said Garipov. Alexander Kuzmin, the General Director of holding Rusholts specializing in the conduct of non-fuel business gas station, said such a price is too high: “in Order to run a successful coffee bar, enough to buy a professional coffee machine that will serve a service organization, quality grain and supplies. And brew delicious coffee, to get people back. How much is this information? Not at all.”

The coffee business is not so simple, do not agree to Coffee Like. Before you open a coffee bar, franchisees undergo a two-step study: first, the basics of business management, and then together with the chief Barista of the theory and practice of brewing coffee.

The parent company enters into with franchisees two contracts — license and contract support programs. To conclude a commercial concession agreement, which is registered in Rospatent, Coffee Like can’t the company still have not registered your brand. “After the filing of the first application we received the refusal, I had to slightly modify the trademark,” explains Garipov. “Denying registration, the examination proceeded from the fact that the claimed trademark is similar with a number of the previously registered trademarks, and also includes potentially unprotected element — Coffee”, — says head of Department of trademarks and industrial designs, Federal Institute of industrial property, Roman Zakharov. According to Zakharov, the new order “Coffee Like” received by Rospatent in February 2016, has a chance for approval: a trademark adjusted. While the company works on the basis registered in the chamber of Commerce of the trade mark.

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How to open a coffee bar

The process of opening a coffee bar takes on average 62 days: during this time, you need to make repairs, to make stand, set up the coffee machine, pick up the staff. Some franchisees ignore the help of the parent company to open fast — will develop a design project of interior design and signage: the Treaty does not prohibit.

Point “coffee to go”, you can open on the street, in a shopping Mall or business center. To open in the shopping center is usually cheaper — front, equipment, raw materials for coffee, pay the Barista for the first month and the payment of the lump sum will cost 400-600 thousand rubles., at the opening of the street in the pavilion — in the 700-1100 thousand RUB Main costs fall on the equipment: coffee machine and coffee grinder right quality cost of 220 thousand rubles., stand manufacture, display cases and shelves — from 200 thousand to 450 thousand roubles, depending on the format.

The contract has a clause that allows the franchisee in the course of the year to start the work two points without re-payment lump-sum payment. In fact, this recommendation is binding: the contract is only with those who are in the first six months ready to open three to five coffee shops. Now each franchisee on average work five or six points.

Coffee blend of the franchisee under the new rules are required to buy from the parent company. He Like buys coffee at the Izhevsk factory, where the beans are roasted. Supplies — cups and straws — franchisee also provides the Central office.

Economy Cup

Revenue coffee bar does not depend on the pixel format, Zufar says: “the Main thing here is traffic: the revenue depends on how many people a day hit his forehead on our sign”.

Mall shows better results when it’s raining or snowing, street point, on the contrary, popular in good weather, while demand in the business centre of the stable: on weekdays a lot of orders on the weekends — less. First Coffee Like actively opened at stations, but quickly burned. “In the flow of people at railway stations, especially in the provinces, not our target audience, although the traffic is huge,” admits Garipov.

General advertising Fund in the network marketing in this case is not needed, says Zufar, although some franchisees, according to him, manage to “merge in the is a huge amount. “Coffee to go” — very spontaneous purchase: flyer or banner will not force a person to go for a drink on the other side of town,” he says. The standard is Izhevsk points the founders is replaced by the promotion in social networks and special promotions. So, when you run one of the coffee shops buyers can pay for your coffee anywhere from 1 RUB. “30 people were standing in line, recalls Ayaz shabutdinov. — In return, the buyers had to provide their contacts. In the end, almost all have made repeat purchases”.

Figures Like Coffee

238 points Coffee Like work on the territory of Russia and CIS

100 franchised coffee bars were closed for three years of operation of the network

300 thousand rubles is the lump-sum payment for joining the network

RUB 346 million — the total revenue of the group of companies “Coffee Like” in 2015

RUB 15.5 million from 25 private investors, has attracted the founders of Coffee Like

Source: Coffee Like

After the fall of the ruble cost of the raw materials for coffee soared doubled, but retail prices have not changed: a Cup of coffee — the product is very high margin. So, before the crisis, the cost of a Cup of cappuccino, which is sold in Coffee Like 80 RUB. (for 30-50 rubles. cheaper than hospital coffee shops) was 23 RUB, then RUB 28 for Example, the cost of coffee beans in 200 ml cappuccino only 6.6 rubles., milk — RUB 7.2

The revenue of the management company is divided into three parts: from its own network of coffee houses (ten points in Izhevsk, belongs to SP Garipova), from the sale of franchises and royalties (managing company LLC “Coffee-Like”) and from the supply of coffee beans and consumables in the point of partners (LLC “Logistika Coffee”). According to “SPARK-Interfax” in 2015 revenue of Kofe Like” amounted to 11.2 million rubles., net profit — 5,4 million rubles, the revenue of OOO Logistika Coffee” — 34,6 million rubles, net loss — 678 thousand.

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Moscow vs the regions

Business “coffee to go” is good because it starts to make money. Coffee Like promises to its franchisees that operating profit will they be released one to three months, and will discourage investment in 6-18. The real experience of the franchisee shows that the point in a good place really quickly is a plus, but the profit is very small — 18-70 thousand RUB in a month. To earn coffee bars, open multiple establishments.

“I constantly read blog Ayaz and really wanted to buy a franchise” — says the owner of three points Like Coffee in Volgograd Daniel Prokofiev. In June 2014 Prokofiev together with a friend Nicholas Smackin opened the dot Coffee Like in one of the business centers of Volgograd. Outlay was about 320 thousand. personal savings. The point was to make a profit of 50 thousand. in the first month of work and investment paid off in eight months.

Seven months after the start of the Prokofiev opened another spot in the Mall six months later — a coffee bar in the pavilion on the street. The revenue of each bar is 180-200 thousand rubles per month depending on the season. Businesswoman working on the imputed system of taxation: it is more profitable due to a small area point, besides so you can do without a cash register.

The record revenue and the number of franchised outlets Coffee Like steel Peter Zhilin and Alexander Semakov: they have nine coffee bars in Arkhangelsk. His first coffee shop partners opened in early 2014, is also inspired by the blog Shubutdinov. The opening left 400 thousand RUB their own savings. Partners is located to 6 m in one of the Central TTS.

New for the product “coffee to go” were popular. In 2014 they launched six outlets, one coffee bar in two months. Now every coffee shop brings in an average of 250 thousand rubles of profit per month, but sometimes the figure exceeds 600 thousand rubles Arkhangelsk specifics: all points were opened in shopping centers. “We have the entire city center consists of TC: few green areas, and the weather is not conducive to long walks: winter cold,” says Peter.

Photo: Evgeny Knyazev for RBC

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Photo: Evgeny Knyazev for RBC

Constantine Safaryan from Murmansk before you open your business, more than ten years working in sales, confectionery, household chemicals, cosmetics and alcohol. Start in April 2016 Constantine spent a record 1.3 million rubles. Tangible part of the cost amounted to the cost of the lease of the islet with an area of 10 sq m, comparable with the Moscow rates. “I opened the largest on the entire Kola Peninsula shopping center, — the businessman speaks. For fun it had to pay.”

But the point begins to make a profit in the first month. Murmansk is now a coffee bar brings him 500 thousand rubles of profit per month net profit margin is 20%. According to Safaryan, such high rates have provided a good cross to the shopping center and the growing popularity of “coffee to go”.

But the Muscovite Kirill Kostyriv disappointed in the business model Like Coffee. Their first coffee bar in Moscow, Kirill has opened in 19 years immediately after it was deducted from my third year of University. Island with an area of 7 sq. m in the checkout area of the Express supermarket on the Garden ring he and his partner had rented in April 2015. The launch took 650 thousand RUB from an operating profit point came in the second month of work, but the money brought is not enough. In the low coffee season (January-February), the point brought entrepreneurs 90 thousand rubles of profit per month, high (autumn) — 180 thousand. In January, the entrepreneurs sold the point for 700 thousand rubles.

Cyril made a second attempt in April 2016, the entrepreneurs opened a second coffee bar in Moscow, but the financial results once again not impressed. Now they put it on sale. “The market “coffee to go” is crowded, the pace of development has slowed down, — said Kirill. — Dreams about a huge coffee shop chain in Moscow crashed about the lack of suitable sites and the wildest competition.” By now, he opens his own barbershop, this time he did not buy a franchise and does everything himself.

The “business “coffee to go” has gained great popularity due to the seemingly simple business model: people see it as a chance to grab the jackpot, ” says the founder of the Moscow network Take & Wake Konstantin Kuzmin. — When it becomes clear that not everything is as simple coffee shops to close.”

It seems that the Moscow market “coffee to go” and the truth is close to saturation, but in the regions still has room to grow. Peter Zhilin from Arkhangelsk believes that in the regions where capital innovations reach late, “coffee to go” is booming. In the near future he plans to open two more points, bringing the number of its coffee bars to 11.