Xpresso Delight- Franchise Fix

Written on the 17 November 2010 by Media Monitors

And it is the increasing sophistication
of the Australian coffee market that has
seen Xpresso Delight's revenue grow by
186 per cent in the last year. The Sydneybased
franchise places automated gourmet
espresso machines into workplaces free of
charge, giving coffee lovers their fix for $1 a
cup.
The firm was established in 2004 when
Stephen Spitz and Paul Crabtree were looking
for a business for their own partners to run on
a part-time basis. However, they quickly saw
the benefits of franchising and now have 72
franchisees servicing 800 businesses across
Australia and New Zealand.
"We got our partners up and running in
a very short space of time and realised we
had a number of different options in terms
of duplicating the business," explains Spitz.
"We could have set it up as a corporation and
gone out and bought hundreds of machines,
employed staff and built up a whole network
that way, or we could franchise it. We saw
immediately that this was conducive to that."
Key to Xpresso Delight's success is the
support is the flexibility it offers franchisees.
Some 80 per cent of those who join in are
husband and wife, father and son or mother
and daughter teams looking to supplement
a full time income with a second wage that
requires just a few hours a week. Entry level
for franchisees is $59,000 plus GST, which
provides five machines. However, according
to Spitz demand is so great that the average
franchisee has nine machines.
The education of the general marketplace
has mushroomed," he adds. "Coffee is the
most recognised smell today, and 60 per
cent of Australians drink the stuff. When we
started, there was a real lack of awareness
that you could have cafe quality coffee
available in the workplace. What we've done
is created that awareness.
"Our national average is around 150 coffees
per system per week. So if you have ten
systems that's $1500. Take off consumable
cost of roughly 30 per cent and you're looking
at ten hours to do ten machines and earning
more than the national average wage. It's a
no-brainer."
The firm also provides a strong support
network, with each state having its own
master agent who deals with franchisees
on a day-to-day basis. Once a prospective
franchisee is identified, has gone through
all the criteria and comes on board, the
master agent trains them intensively over two
days on the firm's systems, operations and
marketing. They also undergo a six-week
marketing action plan and a location sourcing
system, where the company and franchisee
work together to identify suitable locations for
machines to go into.
The business model has been so
successful in Australia and New Zealand the
firm is now looking to expand internationally.
Spitz and Crabtree are currently undertaking
due diligence on several opportunities to
take Xpresso Delight to Europe, Asia or the
Americas, and expect that plan to become a
reality by next year.
There is also Xpresso Delight coffee&go,
which services business through the use of
mobile coffee vans. In filling this niche, Spitz
and Crabtree believe they have created a
"world first" commercial grade pod system
fully fitted out in the van - a cafe on wheels.
Spitz has complete confidence in both the
product and business model, and believes the
only challenge comes from motivating people.
"Franchising in my mind is very similar
to a recipe," he says. "We understand the
ingredients and more importantly the order
in which those ingredients need to be used
and that gives us a very similar result each
time. When we franchise all our systems,
operations and machines are the same. There
is only one variable and that's the individual.
By and large, businesses don't fail, people
do. So our greatest challenge is identifying
suitable people coming in and having to remotivate
someone. But it's a double-edged
sword. It may be the biggest challenge but for
me it's also the greatest reward."
As with most successful entrepreneurs,
Spitz cites passion as the most important
characteristic for anyone looking to start a
successful franchise.
"You want to wake up in the morning and
think to yourself that it's great to be involved
in that business. If you're not passionate
about something you're not going to do it
well. When we look at franchisees coming in
we want to know that their main motivation
is to change their current situation and have
destiny in their own hands. You've got to
have that hunger and appetite to get yourself
in a better position."
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