An Australian Franchisor Interview
Name of franchise: Degani
Name of interview: Dan Gallo, CEO
Tell us more about how/when the business started and the motivation behind establishing Degani
Founded by Melbourne-based entrepreneur George Pezaros in 1999, Degani started with a single bakery café in Victoria’s Clifton Hill. In the past 15 years it has grown to 70 stores and become a much-loved local brand in Melbourne, synonymous with chic interior fit-outs, superb coffee and great food.
Having started under a licence system, the company is now moving to a franchise model as it expands into Queensland.”
When and why did Degani decide to go down the franchise route?
The decision to pursue franchising as a growth and market strategy was explored during early 2012.
Since that time a great deal of research, both in markets acrossAustralia and globally, has taken place. We have been focused on creating a best-in-class franchise model with all the expected systems, tools and resources of a matured system, but with the flexibility to embrace our franchise business partners’ individuality.
What have been Degani’s biggest achievements/successes to date so far?
Degani has grown from one store in Clifton Hill in 1999 to 70 stores in 2014. This is an outstanding achievement, most certainly within the discerning market that is Melbourne.
Founder George Pezaros has stewarded this growth, and maintained a market-relevant offer through his considered approach and strong desire to be a successful brand offer.
What challenges have you had to overcome?
The challenges of creating a franchise system that allows flexibility has been the largest obstacle.
Much of this challenge was in my own thought process, and it took many market visits to understand what is working, not just in franchising, but in the retail and food landscapes. Degani already held this intelligence within its 70 market and location specific sites –we needed to embrace this culture and way of doing business and then create our systems to support it.
What differentiates Degani from the competition?
Degani has a unique franchise model, bringing consistency across all stores, but allowing franchise business partners the freedom of individuality, which remains true to the brand. With this in mind, Degani places a huge emphasis on providing the strongest of business support for franchise business partners to create just that –a partnership. Degani stores change to fit their environment; they do not expect to move into a community and offer the exact same thing. This is why no Degani store is ever the same. Degani franchise business partners have the freedom to mould their business to meet the needs of their customers.
In terms of the customer experience, Degani is focused on delivering all expected areas of the holistic guest experience, but also provide an environment of local relevance and engagement.
Our customers should feel that ‘My Degani’is a café or restaurant offering that assimilates with their needs both physically and emotionally.
In your opinion, what makes a successful Degani franchisee?
A successful Degani franchise partner integrates themselves and their business within their local community. They become the provider of exceptional coffee, food and service and place themselves firmly in
mind as the only option to fill the café-restaurant consumer’s need.
They need to be business minded. As there is on-going support for our Degani franchise partners, we expect them to be proactive in business operations and we look forward to hearing ideas on how they can grow their businesses on a local scale and also grow the Degani brand.”
What changes have you seen in your industry over recent years? How have you adapted?
The food service industry has changed dramatically over the past five years. Much of this change is consumer driven, through education. Our guests have become much more aware of what they should be receiving in relation to the food, coffee and service experience.
We have seen a spike in the home cooking area as evidenced by the major grocery chains and their line changes to meet with the ever-demanding consumer.
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