The Inside Scoop About Café And Bakery Franchises
Oct 12, 2020
Often people consider Cafes and Bakeries as simply another restaurant. In some aspects that assumption is correct, and no one will argue they fall into the Food & Beverage industry. However, they really constitute a category or at least a sub-category all on their own.
Let’s review step by step why they are different, evaluate the positives and negatives of those differences, look at what that really means for those considering doing franchise business with a Café or Bakery franchise, and finally look at a combo Bakery Café franchise that is looking to expand within Asia.
What is different in a café or bakery compared to a normal restaurant?
There are many basic differences:
- More focus on drinks instead of food. While most cafes and all bakeries sell food, it is normally not what draws the customers into the business. Typically guests will also have a reduced expectation on the variety, size, and even quality of food offered. We have seen some cafes be successful by focusing on their food menu, but it is not common, and I would then suggest they would fit more into a restaurant category than the typical Cafes we are talking about here.
- Higher focus on take-away and delivery. Not many foods are as good when they get delivered or picked up and transported from one place to another. This is part of the reason that restaurants were hit so hard during the recent/current Covid-19 pandemic. Cafes and bakeries however, travel well, and except for the ambiance are virtually the same at home, your office, or walking down the street, as they are in the café itself.
- Purchases now for later use. A few foods like pizza or fried chicken reheat well and can be served at a later time. Most restaurant food does not. It is designed to eat while in the restaurant, typically at fixed meal times (breakfast, lunch, and dinner). Coffee and other drinks, baked goods and pastries can be enjoyed anytime of the day. Bakery products can also be easily purchased to be eaten later. We often buy items in the afternoon on the way home from work to be eaten for breakfast the next morning.
- Smaller kitchens and storage. With smaller less complicated menus, kitchens can be much smaller, less expensive to build, and have a much lower manpower requirement. Normally chefs and other highly specialized talent is not required. This also means for the same size space, a café or bakery will have more available customer space (more seats).
- Footprint (size of the location) are more flexible. A restaurant typically has very specific requirements when it comes to space. A concept that is designed for 200sqm will normally find it difficult to fit into 100sqm or even 150. Likewise, there is often no advantage for that same concept to be put into a 300sqm space, which would just increase the occupancy costs with little to no return on investment. Yet, I have seen (and built), cafes as kiosks, or in very small spaces of just 50sqm and also very large cafes of 300+ sqm. Obviously the smaller locations may have limited or even no seating but it is possible and common. This, along with the reduced menu typically will mean that most cafes will require less CAPEX (investment) per location than your average restaurant.
- Simpler, less complex operation. As a restaurant entrepreneur, I often say you are either a F&B person or you are not. That goes for investors, franchisees, and even staff. The mindset of working in the restaurant industry is quite different than many other types of business. Cafes and bakeries are still different than running retail or education franchises for example, but do not require the same level of understanding and experience that a full restaurant needs. They require less R&D (research and development) for example as most consumers order their same favorite drink or bakery bite each visit. Restaurants need to be continually re-inventing themselves or at least their menus to keep guests coming back and stay ahead of their competition.
- More dependent on convenient locations. Of course you may not travel for 1 hour to go to a fast food restaurant for lunch, but a certain amount of travel is acceptable. There are also very popular destination restaurants that cater to special occasions, parties, or have such good food that people will travel 1 hour or more to visit. A café or bakery is not like that. It needs to be very close and accessible or people will chose other options, even if they do not like the product near as much or it is more expensive.
- Less dependent on service. People go to restaurants for many reasons. Food, ambiance, fellowship, a desire to be served, a desire not to cook today, or a need while traveling. Regardless of the reason and with the exception of things like fast food, the service is a big part of the overall “experience” and is often where many restaurants struggle, especially here in Asia.
- Bakeries also play a larger part in consumer meals. Items like bagels, croissants, various breads, and similar items are often part of home cooked meals. This provides a whole other revenue stream unrelated to normal restaurant behavior. These types of purchases are also very fast, profitable, and do not require seating. They allow for a much higher revenue/sqm than traditional restaurants do.
- Bakeries often need a commissary (central kitchen). While some things can be done in store, normally a bakery and often a café chain once it is large enough, require a central kitchen. Some cafes chose to use suppliers and not do their own food, although that creates a different set of problems.
As we see from the above list, there are a fair number of significant differences. Both have rewards and challenges, and there are many successful restaurant, café, and bakery franchise brands across all countries in our region. Being aware of the difference and how that affects the strategic planning is what is important.
There is one more point I would like to mention about Bakeries specifically. There is a limited number of brands focused on Bakery. While I can likely think of 100+ restaurants off the top of my head, the number of chain bakeries doesn’t hit 10. Many people have to get from the local supermarket which is never quite the same and has no opportunity to dine in. This leaves quite great potential franchise opportunities in many countries around Asia for a great bakery concept like Delifrance to be launched with success.
Delifrance is one such bakery café concept that I have had the pleasure to work with over the past several years and it provides a good case study for this article. Interestingly enough they break the traditional mold of being either a restaurant or a café, as they do have a Delifrance Bakery Bistro version which moves quite far into the restaurant category with a wide menu of hot food, sandwiches, soups, breakfast, salads, and more.
With more than 100 years in the bakery business, and 36 years as a franchise, Delifrance is a mature brand with the experience to support their franchisees well. Their Ecole de Boulangerie et de patisserie de Paris (A school for bakers and patissiers) was opened back and 1935 and still remains today as the world’s premier training grounds for French Bakers. This prestigious history doesn’t mean they don’t innovate however. A few years ago they completely redid their store design to the amazing current bold Parisian-style that tells their brand story, showcases their bakery products, and provides efficient customer service. This was done after significant analysis and wasn’t just a simple makeover, but part of an in-depth strategy that allows for a truly versatile concept.
Already successful in hundreds of stores in a dozen countries, including Indonesia, Malaysia, and Japan in our region they continue to seek out multi-unit operators in remaining countries across Asia. I had a chance to ask Delifrance’s Director of Franchising, Ms. Jacynthe Omglin, what they looked for in their franchisees and she says “Since we are seeking partners to operate a multi-unit network, it is highly important to us to work with experienced people who have an existing corporate structure so they can manage a successful expansion”. A proven track record in the F&B industry, a strong knowledge of the local market, experience in franchising, and being well capitalized rounded out her preferences for new franchisee partners.
I also asked what advantages Delifrance has over a traditional restaurant or café as there are many of both in almost every market in our region. She answers “Our group is owned by a cooperative of farmers, which means we can trace the origin of our products right from the farm to the customers table. Our menu is dynamic and vibrant to match the latest trends, and has the ability for local customization to match customer taste preferences. Our formats are versatile and can be adapted to any location right from a small kiosk to a full bistro restaurant. Lastly, we appeal to a wide audience from Gen X, through Millennials, and right up to the Boomers”.
If you are looking for a new franchise brand to add to your company profile, looking to convert a local café chain to an international franchise brand, or an investor seeking a franchise opportunity with a fast ROI, please check out more details about Delifrance: CLICK HERE and you can email me at [email protected] with any questions.
About the author
Robert has over 30 years of F&B and Franchise experience and has lived in ASEAN for more than 13 years. He is currently the Director of Franchise Development & Operations at VF Franchise Consulting, based in Ho Chi Minh City, Vietnam.