
Coffee Treat has found its niche in the crowded and fiercely competitive coffee shop marketplace. So what is it that makes this brand stand out to customers and to possible business investors?
Of course the coffee is first class, but it’s also a business that trades on convenience and friendly service.
Since establishing the business in 2016 founder Chelsea Hayward has fine-tuned the Coffee Treat business model. And it’s a model that has won over veteran franchise consultant Grant Garraway.
“Coffee Treat is a hole-in-the-wall business that has a small footprint and all the benefits that come with it,” Grant says.
What are the advantages of the Coffee Treat business model?
Lower investment costs
The advantages of the business model start with the investment required. A Coffee Treat can cost $200,000, instead of the $500,000 price tag attached to larger footprint, more established cafe brands.
“This means a franchisee’s borrowing costs are dramatically lower,” Grant points out. “The reality is that big investments can be hard to recoup in a single term, and there’s no guarantee of a renewed agreement.
“That’s why Coffee Treat is an appealing option; there’s a lower investment level, refit costs are smaller and lease renewals are less challenging than with the major landlords.”
Premium equipment
However, despite the lower investment and operating costs, Coffee Treat maintains the highest standards. Affordability does not equate to a cut-price business and franchisees will be using premium, reliable coffee machines, blenders and grills.
As the owner of a small brand Chelsea is very hands-on with the business. She has negotiated great deals with suppliers, and has commissioned a highly professional fitout design.
“There’s no compromise on anything,” says Grant. “Everything from the fitout standards to the quality of the coffee is first class – it has to be in a highly competitive market,” he says.
While the Coffee Treat business model appeals to people passionate about a coffee shop but without the upfront capital required to invest in a traditional cafe, it also attracts experienced franchisees from other brands who can see the business advantages, Grant says.
Minimal staffing
There are terrific operational benefits, he points out. Minimal staff can operate a Coffee Treat on quieter days.
“There is no specific seating which means no labour costs of table service, or keeping a cafe floor swept, or maintaining toilet facilities.”
And the benefits continue with the franchisor charging six per cent in royalties and one per cent marketing fees.
Ordering app drives custom
In addition to the low-cost operating model there’s a customer-focused efficiency which drives convenience.
At the heart of the business model is an app that enables customers to order their coffee for pick-up. It has proved a major advantage, in some stores now accounting for more than half the business.
“Time is the key today,” Grant says.“You can order your coffee as you leave home, drive up and park in front of the shop, and grab your coffee with barely any wait time.
“Toasties are ready made and refrigerated, then put straight on the fast grill.”
Speed and convenience with a personal approach
But while speedy service is key to business success, it comes with a personal touch.
“A Coffee Treat experience is what a customer wants it to be; they can dash and go or stay and chat,” says Grant.
Staff use every opportunity to use customer names, which appear with app orders, and that’s an easy way for people to feel connected, he points out.
“One of the skills of a barista is remembering someone’s order. If I walk up to the counter, and the barista nods and starts making my order, I feel connected and valued, that I belong. An app helps you do these things easily,” says Grant.
It is also an excellent tool for add-ons and effective direct marketing.
A robust operational system, first class product, and excellent customer service are delivering the goods at Coffee Treat.
Behind the scenes, Chelsea is very hands-on, creating new drinks and planning seasonal campaigns ahead of time, says Grant.
“As a franchisee you’re drawing on her expertise, and buying a bit of that entrepreneurial spirit and drive. Chelsea has found a niche that works.
“When you buy a business you must buy something you like and can do but it has to make money, and you have to get your money back,” Grant says.
“A Coffee Treat franchisee can charge the same price for a great cup of coffee as another cafe, but has lower operating costs so there is more profit,” Grant says. “If I was 10 years younger, I’d buy one!” he says.