George Pezaros has identified Townsville as the first interstate market for his Melbourne-based coffee and cafe chain, Degani.

He is looking to open six new sites in locations including Castletown, The Strand, Stockand, Deeragun, The Willows and the CBD by 2016.

“That’s our aim at the moment. If we get to that target and everybody is successful and our customers are happy I think we’ll look to further expansion,” says Pezaros.

He told Franchising Degani has opted to expand into Townsville for two key reasons.

“I kept hearing from the staff in our Brisbane office that there was a huge coffee culture in Townsville and that it was growing rapidly, and we’d also heard from a lot of local landlords who were interested in us bringing the brand there.

“We came up to have a look and exactly what I’ve been hearing is exactly what’s been happening – there’s a very strong coffee culture in Townsville, one that I think we can add to and one that we would like to be a part of.”

Pezaros stresses Degani isn’t looking to increase competition in the area, particularly because the company’s offering is dissimilar from that of existing independent and chained operators.  

“We focus on what we can add to an area and hopefully draw more customers in rather than compete with other businesses – that’s always been our philosophy.

“It’s not a matter of us coming in, plonking ourselves in the middle and trying to destroy what’s already there,” he explains.

Pezaros believes it’s incredibly important that the Degani team recruit the right franchisees, and he has opted to travel to Townsville to personally meet with potential candidates.

“We have to have the right people on board, obviously to protect our brand but at the same time we have to make sure that we do the right thing by picking franchisees that are going to be successful – there’s no use signing somebody up that you know is going to end up in trouble at some stage in the future, whether it is because they are not cut out for retail or perhaps financially they are not in the right position.

“It’s a lengthy due diligence that we go through to make sure that not only we do well out of an agreement but the franchisee is going to make money,” he adds.

Pezaros explains no two existing Degani stores are the same, an approach that will be employed in Townsville.

“One thing that we’ve done with Degani right from the outset is design, build and operate our stores to suit their local area and environment – you need to have that flexibility within your brand to be able to open a store and meet your customers needs. 

“We encourage each franchisee and each chef in our stores to experiment with the specials board. We really want people to have a go at offering foods that would suit their venue, and if it’s well received by customers they can put it onto their regular menu,” he adds.

Initially new franchisee training will take place at the company’s head office in Melbourne, however Pezaros says it could potentially shift interstate as the brand grows in Townsville.

“Once we get the first store up and running in Townsville we might try and utilise it for training – it depends on who comes on board and how much training they need.”

Degani’s first Townsville stores start from $300,000.