Case Study " Cafe2u" World's Best Value Franchising System [Low Cost High Profits]

Case Study " Cafe2u" World's Best Value Franchising System.

 Low Cost High Profit Business Model

 
Written by Mohsin Ilyas, Retail Professional

In 2000, first mobile cafe concept was introduced on northern beaches of Sydney Australia. The purpose of this concept was to test potential profitability and this new mobile cafe concept acceptance.

This concept gained highly attraction because it was low cost cafe by no rental costs and can easily relocate anywhere. There was need to grow this new concept in different locations. So later in 2004, business was purchased by current owners, who worked on restructuring and repositioning of this new concept.

In 2004, Business was purchased by current owners and they started to grow this new concept by restructuring and repositioning the business for longevity including:
  1. Design and feel of “Cafe 2 u” Brand as they train their staffs about customer services, customer experience management and customer lifetime value.
  2. Development of culture and core values as there were renowned cafes in surroundings, so to gain attraction of the consumers they worked on core values.
  3. Defining key products because it plays an important role in increasing customer lifetime value and brand equity. For example we see Zinger in Kentucky fried chicken, KFC.
  4. Development of Franchise Documentation, Operation Manuals and territory modeling system. It gave franchisee an attraction to invest in this new business model.
  5. Develop Franchisee training modules to help out franchisee network.
  6. System food safe accreditation.

Relaunching Of Cafe2u 


In 2005, “Cafe 2 u” relaunched in Australian Market with 12 Branches and all branches were Sydney based. They started to encourage their franchisee by training modules and easy documentation process. Cafe 2 u worked on Value Propositions as they found Franchisee needs and then architect values to meet the requirements. Profitability was incredible because of no costs, no expensive maintenance charges, minimum staff expense, no rentals and mainly there was no advertising or marketing expense. 

Today "cafe 2 u" is a part of  Retail Food Group .Business is performing very well as it is awarded several times as best value franchising system in Australia. By the end of 2011, there were operating 185 branches of this mobile cafe worldwide. Franchise network is increasing day by day and surely profitability is also increasing.

Challenging Cafe in the World


They are achieving the milestones by establishing high brand equity, recall value, customer attraction and worldwide expansion. It is also counted as challenging to Star Bucks Coffee. In my perspective, the reason behind this success is "Cafe2u" cares its franchise partners.

Profitability Measure

Revenue:

Yes, Mobility of cafe is an advantage because if sales are not going well in one area then it is easy to relocate, so it helps in increasing revenue.

Costs

Costs are very low because traditional cafes need high maintenance costs, operating costs and marketing costs as well to bring the customers in cafe. But we see in mobile cafe there is low maintenance cost because area of van is limited and also has no sitting area. Marketing costs are lower because it is itself a mobile advertising.


The main steps are;

Attract Franchisee by presented a business model of low cost with potential profitability.
  1. To train franchisee by operation manuals and training modules for excellence in business.
  2. Providing full support to meet requirements.
The main difference between traditional cafes and mobile cafes are;
  1. Mobile cafes are easy to start
  2. Mobile cafes lower marketing, maintenance and operating costs
  3. Mobile cafes are easy to relocate.


Note : PLEASE WRITE IN COMMENT THE NEXT CASE STUDY YOU WANT.

TAGS

 Case Study , Retail Food Group, Profitability, Low cost model, Best Franchising System in World, Cafe2u,Value Customers, Value Propositions, Value Architecture

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