Why Degani is changing its model

Sarah Stowe

Melbourne cafe brand Degani is making substantial changes to its business, most notably by shifting from a licensing to franchising offer, and significantly choosing to continue its individual approach rather than adopt a cookie-cutter model.

CEO Dan Gallo says “The move from a licensed to franchise model forms part of our growth strategy. We plan to have 30 percent of stores company-owned, and the other 70 percent franchised – licensees will eventually move over to the franchise model.”

With the emphasis firmly placed on being local – a local franchisee creating a distinctive business that suits the neighbourhood – the goal is for the consumers to think of their local cafe as different from the others.

“Our Melbourne stores are all different and driven around the local market – we are dead set focused on not becoming cookie-cutter.”

The key to the offer is flexibility – franchisees will be able to personalise the menu offer, drawing from the compendium of more than 200 recipes, and create their own d_cor.

“This is a true franchise business partnership. It’s about making sure we hit the mark in each store and it will take time and research. Compliance though will be standard.

“We want the consumers to know who we are, what we do and our relevance to the market. We want them to trust us as a brand,” he adds.

Stores can be espresso bars right through to full restaurants.

“We want to create a customer mindset that a store might be completely different, but it’s going to be good,” says Gallo.

A strong element of the brand awareness strategy is centred on social media, introducing the brand to new markets and building engagement, explains brand development manager Clementine Scott.

The plans for expansion include 20 further sites across greater Melbourne in 2015, and making the most of the opportunities that exist interstate: South Australia, New South Wales and in Queensland.

Adelaide, Brisbane and Townsville have been identified as potential launch pads and the franchisor has received been interest from parties in New Zealand and China.