Second Cup Gets Serious Hires Former Starbucks Marketing Person Alix Box

February 3rd, 2014 it was announced that Alix Box, a former marketing person for Starbucks (and Holt Renfrew) was brought on to Second Cup as CEO.   If you are in the coffee business in Canada, this announcement would force you to take notice, but if you are in the coffee *franchise* business business, this announcement should have you somewhat concerned.

In Vancouver, Second Cup used to enjoy a fairly strong presence around town – at least to the extent that when you said the name most people knew what it was and where you could find one.  Over the years, they were slowly ground out of the business as more aggressive local franchise chains overshadowed them and the demand for higher quality drove customers to more boutique options. Many can still remember when Second Cup was ‘the place to meet’ in Richmond Centre until a few years ago when even that location evaporated into thin air.  Now there are just three locations in Vancouver – two of which I had no idea about.

But that may soon change.

If there is ever a place in the world a chain can test their coffee skills, Vancouver is it.  Perhaps Second Cup will put the gloves back on in Vancouver in an attempt to redeem the territory on which other Vancouver coffee franchises have taken from them.  If Second Cup can provide a win-win business model for their Franchisees (while avoiding the Supreme Court), provide a very high quality offering for their customers, launch branding that distinguishes them and replaces their fairly generic flavour, and re-launch with a bang – they have a fighting chance.  Vancouverites, if they like your brand, will give their loyalty.

 

Blenz gives White Spot Advice on Expansion into the Chinese Wild West

Here is an interesting article with comments from the former president of Blenz the Canadian Coffee Company LTD, George Moen.

Here Moen gives his feedback on why Blenz failed in China.  He says that China is ‘vast’ and ‘the wild west of franchising’ – quite evocative speech.  I thought this was common knowledge.  I bet you could go to China and find Brenz Coffee and Blendz Coffee and Blanz Coffee on many corners – right beside the Appel Store where they sell Ipeds

To me what is a more interesting question is why, after nearly ten years since getting shot up in the ‘wild west’, has Blenz not expanded outside of BC in Canada?  Is Ontario the wild west?  It could be argued that Alberta is with all those cows and stampedes, but after hearing countless hundreds of Ontario folk asking Blenz franchisees why they don’t exist in Ontario yet do exist in the Phillipines, UAE, China, Japan, I remain without answer. Maybe @georgemoen could tweet us an article we could link to entitled “Why Blenz hasn’t moved outside of BC in North America.”

So what is the best expansion strategy and is there a company that has succeeded in China?  Starbucks and McDonalds?  And how did they do it?  This would certainly be a good read.

 

Sampling and other Marketing Initiatives?

As a coffee shop franchisee, this article about Timothy’s sampling campaign raises some questions that should be asked by any franchisee or prospective purchaser of a coffee shop franchise.  Here are the questions you should ask your franchisor:

1.  Will you provide the sampling team or do I have to train and hire my own?

2. If you will train and set up this sampling team, is that coming out of my marketing pool?

3. If the marketing pool is being used to fund this sampling team, can you guarantee that my little store will have an equal share of the exposure or will you only focus on the ‘high profile’ locations?

Believe it or not, but there is at least one coffee shop franchise chain in the Vancouver area that not only expects their franchisees to pay for such sampling on the streets (labour and COGS) in addition to their marketing pool, but also insists on handing out 2 for 1 coupons while doing so.  When the customer comes to the till to pay (usually with a happy face which is always nice) for their one drink, the franchisee hands them two drinks and, get this, pays a royalty on the losing transaction! It’s one thing to have to take a loss in the name of marketing (standard business) but it’s something quite different to have to pay a royalty on that transaction.  For non-math students out there, this equates to a bad deal for the franchisee.

If this is your situation, why not ask your franchisor to train, send out, and provide the product for your sampling program from the marketing pool?  If they are not interested in this discussion, at least ask them to assure you that you will not be paying at 8-10% royalty fee right off the bottom line of the transaction!

This raises a more important discussion topic – How do you pull together a group of fellow franchisees to discuss such things?  This is where your FAC (Franchisee Advisory Council) comes into play.  Search this website with ‘FAC’ for more information on this important topic.  The VCSFA is dedicated to helping you start your own FAC so that these kind of discussions can start to take place.