In this interview with Stockbox Media, Aidan Keegan, the CEO of Cook’s Coffee, offers a glimpse into the successful world of coffee franchises. He talks about the companys unique approach, expansion tactics and upcoming endeavors all centered around a love, for coffee.
Table of Contents
- The Brand Identity and Differentiation of Cook’s Coffee
- The History and Evolution of Cook’s Coffee
- Management and Operations
- The Franchise Business Model
- Support for Franchisees
- Current Performance and Future Plans
- How does the revenue sharing model work with franchisees?
- What support does Cook’s Coffee provide to its franchisees?
- Where does Cook’s Coffee currently stand in terms of store openings and financial outlook?
- What are the future targets and growth strategies for Cook’s Coffee?
- How frequently will Cook’s Coffee provide updates to the market?
- What should investors know about Cook’s Coffee?
- Frequently Asked Questions
The Brand Identity and Differentiation of Cook’s Coffee
In discussing the brand image of Cook’s Coffee in Ireland Aidan Keegan shared that their public facing brand is Esquires Coffee, recognized as “the organic coffee company.” This branding strategy aligns them with offering premium organic coffee products.
Keegan went on to explain how Cook’s Coffee stands out among coffee brands in the industry.
We find ourselves positioned between the major coffee chains such as Starbucks and Costa on one hand and the food centric brands like Gails and Pret on the other. We’re genuinely proud of our coffee which has undergone extensive development in terms of its recipe and intellectual property. Additionally we’ve invested significant effort in providing training both on site and in store to ensure a top quality product.
I believe what sets us apart is that we offer food prepared fresh, on the day. Unlike prepackaged sandwiches and similar items our offerings are made on location, either upon request or earlier in the day.
The unique blend of top notch coffee and fresh cuisine seems to set Cook’s Coffee apart. Keegan highlighted the advantages of this strategy.
That introduces an aspect. Additionally it contributes to our expenses by minimizing waste and related factors based on our business approach. However from a consumers standpoint it means receiving a product and we believe that’s what fosters repeat purchases and customer loyalty.
The History and Evolution of Cook’s Coffee
Keegan shared some insights, into the companys past and its progress over time.
Prior to being known as Cook’s, the brand had its roots as Esquire’s in the UK dating back to 2001 and making its debut in Ireland around 2002. This expansion was part of a franchise agreement, granting rights for both regions under a license from the then established Esquire’s Coffee in Canada.
Over time, the company evolved and Cook’s, previously known as Cook’s Global Foods in New Zealand, started acquiring the franchise rights for various regions. They operated as a public limited company in New Zealand and their approach involved absorbing these franchises into their operations.
That’s the company that has recently gone public through a listing on Acmez in the UK. And that’s just a brief overview of their journey.
Management and Operations
When inquired about the individuals involved in overseeing and running Cook’s Coffee Keegan elaborated.
As of April, I’m currently the CEO of Cook’s overseeing operations, in the UK and Ireland. Throughout the summer we’ve brought on UK based non executive directors to our board and we’re planning to relocate the entire board to the UK within the next year.
Keegan also mentioned that although they will always prioritize shareholders in New Zealand their plan is to shift operations to the UK.
We plan to relocate to the UK with a focus on operations and management. The entire operational team for both businesses is based in the UK and Ireland.
The Franchise Business Model
Keegan provided an explanation of how Cook’s Coffee functions through a franchise system.
Franchise owners are required to pay us a six percent royalty based, on their revenue. We split this revenue equally, with our regional developers throughout the UK. However the arrangement is a bit different in Ireland.
Keegan elaborated on the economic consequences of incorporating additional outlets, into their network.
From Cooks point of view when we onboard a new store into our system it contributes around £20000. We anticipate needing to allocate some resources, for HR in the upcoming year but not significantly. Almost all of that revenue is expected to flow into our profits within the next two to three years.
The company plans to expand its business by opening approximately 20 to 20+ new stores each year. Keegan explained how this expansion will impact their revenue.
During the initial year of operations they are expected to bring in around twenty thousand. This is the current framework, in the UK. In Ireland due to the regions size we maintain ownership and there’s a more significant increase. Each new store adds approximately sixty thousand euros to our revenue.
Support for Franchisees
Cook’s Coffee offers assistance, to its franchise owners especially when launching a new outlet. As Keegan put it.
They also have an accounting system in place that can identify issues related to key performance indicators (KPIs) such as product costs and labor expenses. This allows us to detect trends within a few months. On the other hand if someone is transitioning from a role and isn’t accustomed to analyzing data it might take them a year to notice those changes in the financial reports.
Keegan pointed out that one of the hurdles faced by franchise newcomers is the expense associated with labor.
In general when starting out people often find the labor costs to be a challenge, which is completely understandable. There’s a guideline that suggests it takes around six or seven individuals to handle the tasks involved in opening a store. However over the span of weeks that same workload can be accomplished by just three or four people. While there may be some expenses, initially it’s crucial to effectively manage your staffing schedule as you progress.
Current Performance and Future Plans
Keegan shared an update regarding how the company is doing right now and what its future goals look like.
We’re getting started, earlier than planned with our store openings. So far this year we’ve opened eight stores and based on our contracted volumes it looks like we’ll exceed the target of twenty stores by the end of the fiscal year.
In the future Keegan outlined key areas of focus for the company.
The current emphasis is on the cost of goods. However I believe we also need to acknowledge that we lag behind in the realm. We’re not at the forefront of innovation compared to some of our competitors.
He went into detail about their strategies to enhance their presence.
We have put effort into the research and groundwork for features like loyalty apps and ordering systems. Much of this development is completed and expected to be implemented within the next few months. Afterwards we will need to integrate it into our existing setup, which will incur expenses.
Keegan mentioned that they intend to keep the market informed with updates.
We plan to conduct updates, every six months at the years end and again six months later. Additionally we aim to release information, on store openings, revenue and similar topics either monthly or every six weeks.
How does the revenue sharing model work with franchisees?
Franchise owners are required to pay Cook’s Coffee a royalty fee amounting to six percent of their revenue. In the UK this fee is split equally between the developers. However the arrangement in Ireland varies in terms of its structure.
Aidan Keegan discussed how opening new stores would affect finances.
Each store we incorporate into our system contributes approximately £20,000, to our revenue in the UK. In Ireland where we have full ownership of the area each new store brings in around €60,000, to our revenue.
He offered additional insights, regarding their objectives.
We aim to incorporate approximately 20 to 20+ stores annually into our network. During their year of operation each store is expected to generate around £20,000 based on the UK model. Anticipate a need for additional HR expenses in the next year or so but not significantly. Almost all of that £20,000 per store is projected to contribute to profits within a span of 2 to 3 years.
What support does Cook’s Coffee provide to its franchisees?
Cook’s Coffee offers assistance to franchisees, during their initial phases. Keegan explained their strategy as follows.
We offer a complete service to assist franchisees in launching their stores. This encompasses 10 days of training prior to the opening and approximately a week of support after the store is up and running where we guide them through the process. Our support continues after with check ins and operations personnel visiting the stores to offer assistance.
Additionally the company assists franchisees in tracking their metrics.
We provide them with a software solution that detects problems, before the franchisees even realize it. This enables us to track patterns in key performance indicators such as expenses and labor costs within a few months, instead of waiting for reports.
Keegan pointed out a struggle that franchisees often encounter.
Typically the initial challenge that individuals face is related to expenses. I have a guideline for staffing when a store opens. However it’s important to adapt your schedule as you progress. We’re here to assist you in recognizing those indicators and offering advice on how to adjust your staffing levels accordingly.
Where does Cook’s Coffee currently stand in terms of store openings and financial outlook?
Keegan shared a progress report, on their performance.
We’re slightly ahead of plan, when it comes our store openings. So far this year we’ve launched eight stores and based on our contracts we expect to exceed the target of twenty stores by the end of the fiscal year.
He showed trust, in their situation.
If you were to inquire about my level of comfort regarding our current position and financial plans I would say, without a doubt. We’re progressing well towards achieving or surpassing our goals this year.
What are the future targets and growth strategies for Cook’s Coffee?
Keegan discussed their strategy, for expansion.
What sets our model apart is that regional developers are accountable, for meeting those growth goals on our behalf. We have established growth benchmarks for them and we assist in reaching those objectives.
He pinpointed important areas of emphasis for the business:
Right now, there’s a lot of attention on the cost of goods. However I believe we also need to admit that we’re lagging behind in the realm. We’re not keeping up with the advancements of our competitors.
Keegan elaborated on their digital strategy:
We’ve put time and effort into studying and preparing for features like loyalty programs and pre ordering options. Most of this groundwork is completed and we expect to see results in the coming months. After that we will need to integrate these into our system, which will incur some expenses.
How frequently will Cook’s Coffee provide updates to the market?
Keegan outlined their reporting plans:
We will provide updates every six months – one at the of the year and another at the halfway point. The report will be ready by the of September. Moreover we plan to release information about store openings, revenue and related metrics on a basis, either monthly or every six weeks.
What should investors know about Cook’s Coffee?
Keegan highlighted important aspects for investors.
Our business model is straightforward and adaptable. What sets us apart is our emphasis on coffee and food prepared on location. We’re experiencing significant progress and are surpassing our timeline for launching new stores.
He also highlighted their expansion plans:
Our goal is to open 20 new stores annually each making a impact, on our revenue and profits. Additionally were focusing on enhancing our presence to remain competitive in the, coffee industry.
Frequently Asked Questions
What is Cook’s Coffee’s brand identity?
Cook’s Coffee, operating under the Esquires Coffee brand, is recognized as “the organic coffee company”. They carve out a niche, offering top notch organic coffee and freshly prepared food that sets them apart, from the big coffee chains and eateries.
How does Cook’s Coffee support its franchisees?
Cook’s Coffee offers support including training, continuous operational aid and financial tracking resources. They assist franchisees in choosing locations, setting up stores and overseeing essential performance metrics.
What are Cook’s Coffee’s growth targets?
The company’s goal is to open more than 20 new outlets annually. Each store is projected to bring in approximately £20,000 in revenue in the UK or €60,000 in Ireland.
How is Cook’s Coffee addressing digital trends in the coffee industry?
Recognizing that they lag behind rivals in this field Cooks Coffee is pouring resources into enhancements. Theyre working on creating loyalty applications and features that allow customers to place orders in advance with plans for rollout in the future.
How often does Cook’s Coffee report to investors?
Every six months Cook’s Coffee releases reports. They also intend to provide updates on store openings and revenue either monthly or every six weeks.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.