Coffee franchise is anything but a grind for founders celebrating 100th franchisee

Written on the 30 July 2009

THE coffee beans are smelling even sweeter these days for Xpresso Delight co-founders Stephen Spitz and Paul Crabtree.

After starting the business in 2003 their franchised concept of placing fully-automated, commercial grade, gourmet espresso coffee machines into workplaces at no cost, with the coffee charged at just $1 per cup, has experienced nothing but consistent growth which culminated this month with the company signing its 100th franchisee.

The milestone represents another year of strong performance for Xpresso Delight which, despite the economic downturn, posted 70 per cent growth for the 2008/09 financial year after recording 71per cent growth for 07/08.

Mr Spitz said the ability of the business to provide impressive return on investment to franchisees was critical to its ongoing success.

“We have a solid business model which allows franchisees to leverage their valuable time to the fullest and earn a minimum return on investment of 40 per cent or better each year,” he said.

“Our franchisees’ sales growth has been very consistent. They start with five coffee machines and grow to an average of nine machines each, increasing their turnover by an average of 80 per cent.

“We also guarantee our franchisees will make a minimum 40 per cent revenue return on capital investment within the first six months or their franchise fee is refunded which reduces some of the risk of going into business.”

Mr Spitz and Mr Crabtree are now planning an aggressive expansion campaign for 09/10 to continue to build on their already impressive brand.

“Our expectation for domestic growth for Australia and New Zealand is to reach the 150 franchisee mark by the end of 30 June 2010. We will be backing this up with a strong advertising campaign for prospective franchisees across all mediums with a focus on television, we have also identified a new country which we will be expanding into very soon,” Mr Crabtree said.

With so many franchise opportunities on the market Mr Crabtree said the secret to Xpresso Delight’s success had been its low entry cost and entrepreneurial scope.

“With franchises starting at just $64,000 Xpresso Delight represents a very low-cost start-up business. Our model allows franchisees to expand very quickly or at their own pace without having to be ‘in the business’ five days per week.”

In 2008 Xpresso Delight introduced their mobile coffee van division ‘coffee&go’ to capitalise on growing demand for coffee franchises with full-time involvement.

“Coffee&go has been a great move for us at it appeals to a different type of franchisee. It has also given our Master Agents another alternative when speaking with a client. We can now tailor our business to their requirements even better,” Mr Crabtree said.

Xpresso Delight was ranked the 11th “Fastest-Growing Franchise” by outlet in BRW’s “Fast Franchises 2009” and for the past two years has been ranked in the top five “Fastest-Growing Franchises” by revenue. The company also won the “2008 Australian Business Award for Enterprise” in the Cafes and Restaurants category.

>> Find out more about Xpresso Delight franchise opportunities