Chewy Junior – A New Addition to the Canadian Franchise Scene

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Chewy Junior, a cream puff franchise from Asia (do they come from anywhere else?) has just launched their first Canadian flagship location in Vancouver.

This light article at Wayne Out There sheds some light on the Chewy experience.

Part of the Chewy Junior story is founder Kevin Ong’s repeated failure in business.  Failure in business will typically lead the casualty in one of two directions: a) towards eventual success if they recalibrate and don’t quit or b) towards a jaded life of anger towards the world that has wronged them (or so they believe).  Based on our quick review, it looks like Chewy may be on the former, not the latter path.

There is no question that the Chewy Junior product offering is both unique in the market (there aren’t that many cream puff shops in your average block) but also further unique in that they offer a very high quality product with an amazing display.  A quick look in the new flagship store display fridge and the customer will find it very difficult to resist taking a box home.

Wagers are already on as to whether or not such a concept will succeed, but before you wager, make sure you both see and eat one because from our first reports, experiencing is believing.

“…experiencing is believing.”

Stay tuned for more on Chewy Junior and other Vancouver franchises.

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Life in the World’s Top Coffee Cities

Recently the BBC did an interesting article about living in the world’s top coffee cities.  Just the existence of this article underpins the importance of coffee in our lives.  The very fact that a city is rated by its coffee is more than intriguing.

It seems as though coffee is becoming a tourism pull – and why not?

It must also be somewhat bothersome for Vancouverites that Vancouver is not featured (it would have fit perfectly on the cost of living graph) but proves we need to step up our ‘coffee game’ further.

 

 

 

Is Blaq Sheep a Black Sheep in the Coffee Industry?

Is Blaq Sheep a Black Sheep in the Coffee Industry?

A new player seems to be entering the Vancouver coffee market – Blaq Sheep Fine Coffee.  Although they have a website, it does not do any justice to the actual brand experience which indicates further that something is bubbling under the surface.  For example, on the day of this post, you can go through most pages of their website and not come across their very cool logo of the sheep.  Yet, a quick search the image section of a major search engine will reveal a more accurate display of their shops, signage, and branding in general.

So what is a black sheep?  Turning to the never-failing and always true Wikipedia we read that  a black sheep is usually a negative term of someone who doesn’t fit in or has gone wayward.  Essentially, it’s someone awkward, eccentric, or ‘too unique’ who doesn’t fit in with the crowd.  But don’t forget that Jesus left the herd to go and find the one sheep that went sideways.  Jesus cared deeply about the one black sheep.  The most well-read book in the history of the world, the Bible, constantly teaches that it’s not wise to follow the herd (those who surround you) because they are heading towards destruction.

But what does this mean in the Vancouver coffee industry?

This means opportunity.

Vancouver is saturated up the yin-yang and out the other side with coffee shops, but if you ask espresso drinkers where the good coffee is, there aren’t too many enthusiastic replies.  In a land with so many coffee shops (and sushi shops while we’re at it), most of them seem to fit under a handful of brands. When you get out of the Kitsilano, Gastown, Main Street or the Commercial Drive ‘coffee zones’, the story gets even worse.  So, for a city that has so many coffee shops, there is a surprisingly low number of either extremely high quality shops, or shops that are stepping out on a limb to be different.  Most of them are slight variations of each other but following a very similar model of Italian espresso drinks with some pastries and the odd panini – nothing wrong with that and there is probably good arguments against breaking what might not be broken, but where are the boat-rockers or the feather-rufflers?

Blaq Sheep Fine Coffee, on the other hand, appears to be totally separating themselves from the herd.  Our first reports are that they have a ‘very good coffee’, unique and good food program, and a decent selection of alcoholic drinks coupled with a unique atmosphere.  Their slogan on their sandwich board ‘Outstanding in our Field’ right under their logo should be both entertaining to the customer, but a concern to competitors.  It’s a bold statement of who they are and what they are planning.

It will be interesting to learn more about their products, their business model and ‘black sheepness’ of their branding as they grow from two locations.

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Vancouver Franchise 1-800-Got-Junk? Celebrates 25 birthday

Anyone interested in the franchising business model, especially in the Vancouver area, should take keen interest in this article written about the history and success of the famous junk company 1-800-Got-Junk?, and not just because it was birthed here.

For the entrepreneurs, the most intriguing part of the article will be the David and Goliath aspect of how Brian Scudamore put his own challenges aside and courageously went the road less travelled.  For the person who tried this path and lost for whatever reason, there is a deep-rooted, heart-warming and tear-jerking sense of ‘way to go, kid’ – like how you feel when the underdog hits the home run in a movie.  It is usually followed by a kind of depressing feeling as we think about how much money we lost trying to travel a similar road (or even roads…).  One thing is certain and that this is one of the most inspiring entrepreneurial stories because of the perceived ‘simplicity’ of the business.  Anyone could start a business picking up garbage, couldn’t they?  How is this any more revolutionary than the guy who picks the cans out of my recycling bin (without my permission please note) every Wednesday evening?  For the student studying business, this should be their first chapter example.  They should pose this question in bold italics at the top of the opening page.  Then, they should have Brian Scudamore come in and blow their minds open with what it was really like building a large company.  It would not be surprising if ninety percent of the students in that class were to drop out and change majors while the other 10% went on to build similarly inspiring companies.

Anyone considering any kind of business, should pay special heed to the following extraction from the article:

“When the time came to franchise, well-meaning friends and colleagues said junk removal could never be franchised.”

This is the first lesson learned in every business.  Avoid well-meaning friends and family at all costs.  Thankfully Mr. Scudamore was able to block out their noise.

Another important part of this story is how Scudamore was quoted as feeling like he was getting more out of building his business than from attending school.  Our current education system is very much like our well-meaning friends and family.  It tries to do the best it can but it’s built by people who are incubated and hatched in school where they where they set goals to eventually teach in them and ultimately retire from them.  They do their best to teach the stuff they should but they fail quite notably to teach finances and business – especially in the arena of creativity and boldness.  At what point were any of us encouraged to be different from each other?  There are countless stories of getting penalized for such behaviour, though.

Franchising, as many have learned from reading our articles, is a very different business model compared to the corporate structure.  The successful franchise (over the long term) is able to create legitimate win-win relationships.  In a successful franchise, the Franchisee feels content when their Franchisor is making money because they are making money too.  Although we have not even begun to investigate the satisfaction level of 1-800-Got-Junk? Franchisees, we would not be surprised if we discovered just such a synergy.

We look forward to hearing stories of successful franchising as 1-800-Got-Junk? grows.

 

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 Ranked as Lawsuit of the Week by Business in Vancouver (BIV)

Blenz Ranked as Lawsuit of the Week by Business in Vancouver (BIV)

Well respected and well read local business publication Business in Vancouver not only picked up on the court filing made by three former Blenz Franchisees against its former Franchisor, but ranked it as their ‘Lawsuit of the Week’ – and rightfully so.  Blenz has enjoyed for many years a natural windfall of sales produced by loyal customers who feel warm and fuzzy about the ‘local Canadian brand’. No doubt the very presence of this filing surprised the author.

Although the BIV article covers fairly well the claims of hindered store sales and lease renewal problems common to the three plaintiffs, a $6.00 download of the very large filing reveals that it didn’t even touch upon one of the most devastating claims against the Franchisor – Kormi’s doomed, mandatory, and very expensive renovation and surrounding events.  This part of the claim alone covers pages and pages and, if these claims are proven in a court of law and picked up by local media (ie. Steele on your Side), they will certainly have the potential to evaporate a good percentage of the ‘warm & fuzzy’ mentioned above.

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It is also noteworthy that there was no mention of the first court filing of 2014 against Blenz by Elizabeth Jacobo.  Reports from those who have read this filing indicate that it is on par or even more potentially devastating to the Vancouver brand than the claims found within the Taylor, Sahdra, Kormi suit.

Read our March 14th report of the growing number of lawsuits Blenz is facing in 2014.

Check back regularly for updates on this and other similar stories.

 

 

Franchising, Suffering, and Stockholm Syndrome

Franchising, Suffering, and Stockholm Syndrome

Over the last couple of months, we have been involved in painful conversations with several coffee shop Franchisees which was not unlike the dialogue a parent might have with their children about the dangers of drinking and driving or getting involved with gangs.  The older, wiser parent explains – from their own experience – the death and pain surrounding these important life decisions and why it’s important to avoid bad decisions at all costs.

In the first dialogue, the Franchisee had already been abused by their Franchisor when asked to cough up a large amount of money that was clearly for the unilateral gain of the Franchisee and the unilateral pain of the Franchisee.  Yet the Franchisee paid.  The Franchise also told us that the business was for sale and has been for a long time.  We explained that the commercial agent the Franchisee was using was highly questionable and may have other motives than the sale of the shop.  Yet, the Franchisee continued to use this agent.  This person even went so far as to explain that there was no happiness surrounding the business and it is not making much if any money.  Yet this person remains the Franchisee on record for that location today.

In the second dialogue, a Franchisee who has watched several other owners in the same chain get raked over the coals by exorbitantly priced – and forced -renovations (which lead to their eventual demise) reached out to us for our advice.  Can you guess what our advice was?  You guessed it.  We said, “Run for the hills and do not look back.”  Yet, it is rumoured that this Franchisee is about to hand over the money!

These two dialogues have resulted not only in the hurt of the Franchisee while they operate but also in the hurt of the people who advised them – much like the parents who watch their children drink and drive against their advice.  One can understand the teenager making life decisions like this but it does not explain very well the adults because they are… well…  adults.

One former business owner presented the idea that these people are suffering from Stockholm Syndrome.  Don’t worry, I didn’t know what it was either so here is a pretty good video link that will bring you up to speed.  I believe this person has hit the nail right on the head.

Franchisors (and the courts of law know this) are in a position of power over the Franchisees.  There are no two ways about it and even before signing the Franchise Agreements, everyone knows it.  If the Franchisor turns out to be highly ethical and wants a win-win business relationship you have done well and have obviously been an avid reader of VCSFA articles.  However, if the opposite happens, you are now a captive for the duration of your lease term unless the franchise allows you to take back your retail space and go independent.

We have witnessed, first hand, Franchisees begin to defend their Franchisors even though they had previously acknowledged them as abusive dictators.  Their mental condition began to change as the pressure was put on them by the Franchisor.  They began to think about their seemingly powerless situation and feel hopeless against their new Goliath.  They began to have thoughts that perhaps if they tried to work with the Franchisor amicably that their hostile environment would somehow turn out less hostile and they would have a better chance of coming out unscathed – both legally and financially.

From the non-business owner and former Franchisee’s perspective, this kind of behaviour is akin to the nice girl who insists on staying in the abusive relationship.  No matter what counsellor or agency you refer her to, she insists that she will be able to change this abusive man and that somehow things will get better and one day she won’t wake up with black and blue eyes.  In both situations, what they haven’t considered is that a man cannot change another man’s heart.  Whether it’s a corporation or an individual, a change must occur in the heart for outward change to manifest.

So how do you know which chain is oppressive and captor-like?  You will know them by their fruit. No good seed from a good tree will produce bad fruit and conversely no bad seed from a bad tree can produce good fruit. In a franchise environment, the individual Franchisees and their locations are the fruit.

No good seed from a good tree will produce bad fruit and conversely no bad seed from a bad tree can produce good fruit. In a franchise environment, the individual Franchisees and their locations are the fruit.

 

Need some advice? Considering signing up with a franchise?  We are here to help.  Shoot us an email at info@vcsfa.ca

Blenz Coffee at Cambie & 17th Closes Doors

Early this morning and without notice, customers were surprised to find the Blenz Coffee location at 3297 Cambie Street (17th & Cambie) in Vancouver locked and with Baliffs at the premises.  This event comes right on the heels of the 815 West Hastings closure location a few weeks ago.

At this point we do not have all the details but be sure to check back frequently as we bring you the latest updates on the recent string of sudden store closures happening at Blenz the Canadian Coffee Company LTD.

Do Customers Like Coffee Shop Franchises?

A small article in the Huffington Post BC slipped by many readers. It is most significant to us at the VCSFA not because of what is on the list, because instead what is not on the list.

Before reading the article, it is important to preface that the author Jesse Ferraras used the term ‘franchise’ towards Artigianos where was not a Franchisee/Franchisor business model but instead a corporate structure.  Be it known that Caffe Artigiano does not sell individual franchises as is therefore not on the VCSFA list.

Why this article struck us as notable was that we could not find one – no, not a single solitary name – coffee shop franchise. Don’t believe us, do your own comparison.

The VCSFA Comprehensive List of Vancouver Coffee Shop Franchises

The Huffington Post article of ‘The Best Coffee in Vancouver’ list

Not a single coffee shop franchise wowed the people enough to make it into this list which begs the two obvious questions:

What makes a coffee shop desirable?

Why aren’t coffee shop franchises desirable?

In defense of all those who were not included in this list, we at the VCSFA do not consider Yelp to be a reliable form of research data.  We have had many discussions with cafe and restaurant owners who have had very positive reviews end up ‘filtered’ at the bottom of their page, not contributing towards positively to their star count.  Further, we know of some horrific cafes that have been reviewed accordingly and those awful 1-star ratings still sit there filtered today, not lowering their star count to where it should be.  Finally, we believe that every food and beverage business needs a ‘jubilee’ every 1 or 2 years where all their entire ratings and history are magically erased and reset to zero and the business gets a chance to right the wrongs of the past, starting again with a clean slate.  Can you name one food/beverage business where the same bad (or good) staff are still working there two years later?  Or, is it not possible that a new owner has taken over and has improved upon or killed the previous owner’s work? For this reason, we acknowledge that the data source is not a reliable enough to be considered conclusive.

With that preface, Yelp is good for one thing: collecting the ‘extremes’.  So, if a review does make it through the Yelp filters, it is likely that the person who wrote it is pretty fired up in the positive or the negative.  It is even more unlikely that someone will blog a positive review so all the kudos to the shops that got some.

With all that preamble behind us, here is the important stuff that we have pulled out of this work:

What seems to make people like these shops:

  • quality food
  • unique atmosphere
  • niche java (ie. serving South American style, Clover machines, freshly roasted, organic/fair trade, etc)
  • niche skill (ie. latte art)

One reason why a Franchise coffee shop may not have made it on the list is because people, by the nature of the way they view a multi-location chain, don’t consider it special.  They may get a good drink but because it’s part of a big chain they might not consider that experience unique enough to blog.

The VCSFA is well aware that the food programs at most if not all coffee shop franchises is abysmal.  In many cases the owner of the store is forced to order over-priced product from a vendor that has no idea what the customers in his neighbourhood are demanding and/or has no authority or ability to provide a solution.  In one case, a group of franchisees from a major Vancouver chain reported to us that their sandwiches were made in Vancouver and then shipped for sale to their store in the Okanagan!  We could understand this model for a low-priced, high-volume chain, but we were shocked that this was occurring in a chain claiming to be trying to carve out a piece of the high-quality market.  Needless to say that as soon as the customers found out, sales slumped.

Coffee shop franchises should be on alert and take much heed to this casual list.  Franchisees of the chains that were not included on this list (which is every last one of them) should start immediately asking their Franchisors what went wrong.

 

 

Before you Buy a Coffee Shop Franchise in Vancouver – Commercial Agents

Buyers Beware

A lot of people will start looking for a business to purchase on their own.  They might search the net for ‘coffee shop franchise Vancouver’ and up comes a bunch of ‘stuff’ – mainly private websites of commercial agents who are listing coffee shop franchises for sale.  So, you look around their sites and you see that they have lots of listings so they must be good!  They must be great.  How could all those listings be there if they weren’t great? Don’t be too sure.  Also, be super cautious if an agent seems to only work with just a couple of chains (ie. Blenz only, Wave’s only, etc.)  This would indicate there ‘may’ be a back room relationship with head office and the agent and this may not be to your advantage.  You will learn why this is the case when we publish Part 2 “Before you Sell a Coffee Shop Franchise in Vancouver”.  We just ask that you, for now, not consider this an advantage until you learn more about the possible implications.

Let’s say you decide to move forward with such an agent.  Typically they are ‘double ending’ the deal so you should be extra careful that the agent is looking out for your interests. What ‘double-ending’ means is that they find the buyer themselves and get paid by the seller and since there isn’t another agent involved, they keep all the money themselves. $$Cha-CHING!$$

By law, this agent has a duty to protect both the buyer and the seller, but let’s be realistic – the agent gets paid when the store sells and usually the more it sells for the more money the agent makes.  Use caution. The agent may have very high integrity, but if that person doesn’t… yikes.  The VCSFA strongly, strongly recommends bringing in another commercial agent with whom you have trust to help you close the deal to make sure you are not buying a bad deal, especially if this is your first business purchase.  This is for YOUR protection and it’s worth it.  If the agent suddenly disappears when they find out you are bringing in another agent, you might want to question ‘why’.  A better strategy would be to not contact the agent first from his/her personal webpage or advertisement if you happen to find it on your own. Instead, find yourself a good commercial agent and then have that agent contact the seller’s agent on your behalf.  If that agent refuses to work with another agent, quietly contact the owner of the store and tell them what’s going on – they deserve to know that their agent is not looking out for their interests and turning away perfectly good buyers.  Yes, we are writing this because it really happens out there.

If you are looking for a professional agent to represent you during a purchase, please see our VCSFA Approved Agents listing who have proven to be professional and hold the interest of their clients at the top of their priority list.

If the agent is NOT listed here, and they are based in Vancouver you could contact us and we will research the agent and give our opinion.

Here are some questions you should have answered by a listing agent who is listing a coffee shop franchise in Vancouver before you decide to work with him/her regardless of how much you think you want the business that’s listed:

  1.  Is this agent on the VCSFA approved agent list?
  2.  If not, ask the agent why and have that agent contact us at info@vcsfa.ca for consideration of inclusion.
  3. Ask the agent to produce some reference from some buyers who bought a business through him and ask those buyers if they were satisfied with their experience.
  4. Check to see if the properties are listed on the ICX website as well as the place you found it.  If not, why? They could be avoiding other buyers with agents for the purpose of selfish gain, not the interest of their client, which would indicate this person may not be an agent you want to deal with.  NOTE: many agents do ‘exclusive listings’ but this is usually agreed upon with the listing story.
  5. Ask if they have any problem working with your agent (if you decide to contact them on your own).