An Australian Franchisee Case Study
FINDING the right balance between work and family life is something most people aspire to and there are few business opportunities that accommodate this, but QLD business owner Bruce Spencer has found the ‘perfect blend’ with an Xpresso Delight franchise.
With a business model based on helping to generate a passive income stream, Mr Spencer’s business keeps ‘grinding’ to the tune of $1,200 each week with minimal time and effort.
“The Xpresso Delight concept works by placing fully automated, commercial grade, gourmet espresso coffee machines into workplaces free of charge, costing just $1 per cup,” he said. “It’s allowed me to swap my full-time job to work an average 15 hours per week and earn a yearly turnover close to $63,000.”
Mr Spencer knows more than a thing or two about franchising, working in the franchising industry for the past 15 years with recognised companies including Bakers Delight and Wendy’s.
“The beauty of Xpresso Delight is that it’s a simple business that doesn’t require a lot of policing by the franchisor. We’re in a business-to-business environment so we’re not as visible and because we’re dealing with a relatively small number of clients it’s much easier to maintain a high standard of service.
“I didn’t set out to start a franchise but I’ve always had a desire to own my own business and circumstances pointed me in this direction. Everything I’ve experienced so far has been great; I have access to professional support and proven systems that allow me greater autonomy than other franchises.”
Xpresso Delight was established in 2004 by Stephen Spitz and Paul Crabtree and has achieved phenomenal revenue growth with a 186 percent increase in the last year. Mr Spitz said crucial to the success of the business has been its ability to provide franchisees with an impressive return on investment.
“We have a strong business model which allows franchisees to leverage their valuable time to the fullest,” he said. “Once the machines are installed they require only weekly servicing to keep on generating income, cup by cup.
“We also guarantee our franchisees will make a minimum 40 percent revenue return on capital investment within the first six months or we will refund their franchise fee in full.
“The average franchise can earn better than the national average wage for working under 10 hours per week and our highest-earning franchisee has a turnover greater than a quarter of a million dollars per year for around 35 hours work per week.”
Stephen and Paul started Xpresso Delight in 2003 with 10 coffee machines and quickly realised the potential of franchising.
“Within eight weeks of establishing Xpresso Delight we had the foundations of a great business and we realised the business model and systems could easily be duplicated,” Mr Spitz said. “Franchising was the obvious model to accomplish this and we have grown from there.
“Our attitude is that we’re in a partnership with our franchisees and we try to encourage a good work ethic, excellent customer service and the importance of work-life balance. We want our franchisees to enjoy their business and not be run by it.”
Since 2004, Xpresso Delight has grown to a network of 76 franchises across Australia, selling over five million coffees per year and Mr Crabtree said plans were afoot to establish another 24 franchises by the end of 2008.
“We have a saying amongst all of our Master Franchise Agents which is ‘100 ’08’ or in other words ‘100 franchises by the end of the year’,” Mr Crabtree said. “We know there is a huge market waiting to be tapped and we have invested considerable time and money into finding the right technology, coffee blend and suppliers to become a market leader.
“Our long-term goal is to operate a network of 250 franchises by 2012 and the majority of our franchise growth will come from full-time workers and stay-at-home parents looking for an extra source of income or a flexible business opportunity.
“We have also been considering expansion overseas and in 2009 we will be investing in research to identify the best locations for our franchises. However, our primary focus will be on developing and growing Australia first.”