FRANCHISE PROSPECTUS

Transcription

1 FRANCHISE PROSPECTUS

2 FRANCHISE PROSPECTUS Dear Prospective Franchisee. Thank you for taking the time to read this introductory prospectus. The Creams Cafe concept started back in The first UK franchise took 2 years of meticulous research and planning. After several trips to Italy, the heart of fine desserts, the authentic gelato ice cream was carefully selected to bring you the best experience in quality desserts. Creams Cafe is a unique and independent, quality food brand. We are a fast-casual operation with dine in and take-away elements. The decor and theme are centred around 50 s retro Americana, the black and purple colour scheme, as well as the distinctive lighting adds a trendy cutting edge to the design and feel. Customers find our cafes attractive, atmospheric and appealing. Our Cafes have become the place to visit at any time of the day and for all age groups. We have created the ultimate range of sundaes, waffles, crepes, coffees and other desserts creating a range of distinctive and indulgent taste experiences.

3 THE ALL ROUND EXPERIENCE Over 40 different flavours of freshly made gelato- a tasty, healthy, low fat, authentic luxury Italian treat. Authentic American style waffles and crepe s served in many wonderful sweet variations Complemented by coffees, sundaes, smoothies, juices and desserts An all day Cafe and dessert experience A Lifestyle brand a unique and fun experience, through the combination of food, design and service Re-imagining and combining old American and Italian ideas, introducing them with a stylish and fresh twist. The hot cooked food sector is very much saturated with new ideas in food, being competitively priced is an uphill task. In this light there is very little competition and much synergy in being positioned near eateries The lenient position of local councils toward A1 usage for coffee shops means that there is an abundant availability of retail units there is generally no premium or goodwill for such shops None of the hygiene, and specialist staff associated with a full back of house kitchen

4 OVERVIEW OF THE UK COFFEE SHOP SECTOR The Allegra Strategies Project Café report is considered to be the definitive guide of the retail coffee sector produced to fully describe the latest developments in the fastest growing UK coffee shop market. According to the latest Allegra Strategies Project Café 11 report published in December 2011, the total UK coffee shop market continues to show solid growth with estimated sales of 5.4 billion in 2011, representing annual growth of 6%. In particular, branded chains have shown resilience in the face of the challenging UK economy. The 5.4 billion total UK coffee shop market displays robust annual growth of 6% in the last 12 months The UK coffee shop market reaches 15,084 outlets, with annual growth of 4.5% in 2011 Allegra predicts the total UK coffee shop market will reach 18,000 outlets and 7 billion turnover by 2015 The branded coffee chain market, with estimated turnover of 2.1 billion, delivers sales growth of 10%. This significantly exceeds the estimated total UK retail sales growth of 0.7% in 2011 The UK branded coffee chain market is expected to grow at 6% compound annual growth and exceed 6,000 outlets by 2015 Also according to the Allegra report, customer insight reveals the number of coffee shop visits increased in 2011 supporting positive like-for-like sales growth and as such coffee drinking remains an integral part of consumer s daily routine. Espresso based beverages are considered an indulgent but affordable treat for a significant proportion of the UK population. 39% of consumers visited coffee shops more often than they did in 2010 Coffee shop visits continue to be important to consumers who maintain and even increase their visits as part of an affordable treat to counter the overall feeling of austerity in the current economy 19% of coffee shop visitors in 2011 state they visit daily compared with just 12% in in 10 UK adults visit coffee shops on a daily basis in 2011, compared with 1 in 16 in % of consumers state the current economic climate does not impact visit frequency, illustrating the coffee shop market resilience in the economic downturn The Allegra report states the market outlook in the coffee shop sector will continue to outperform retail sales growth. Overall, the trading performance was robust in 2011, with 78% of operators experiencing positive like-for-like sales growth. Furthermore, 61% of industry leaders believe the current trading environment remains positive.

5 OVERVIEW OF THE ICE CREAM SECTOR The warm summer of 2013 provided a significant boost to the ice cream market with a more than 7% year-on-year rise in values when sales jumped from 1.04bn in 2012 to 1.12bn in 2013 and a more than 4% increase in volumes from 340m litres in 2012 to 352m litres in Volume sales have been even more impressive as sales are estimated to have tripled growing from 1m litres in 2011 to 3m litres in A third (35%) of all consumers worry about the sugar content when eating ice cream, but despite this, less than three in ten (28%) say they would prefer to eat less ice cream than switch to light versions such as reduced fat and sugar. This is great news for Italian gelato, lower in fat, higher in natural fruit content- the gelato positions itself in prime position to benefit from this trend. In the US, the ice cream and frozen novelty market, which struggled for positive sales growth in 2009 and lost sales in 2010, turned a corner in 2011 with a 4.1% increase in total US retail sales to reach $10.7 billion, according to a new report from Mintel. Sales are expected to increase another 4.1% in 2012 to become an $11.1 billion industry. New flavour profiles and ingredients: Reduced fat (38%), reduced sugar (38%) and reduced calorie (36%) are the most important claims consumers are looking for on the packaging of their favorite frozen treat. However, gluten-free and dairy-free products are rapidly growing in popularity with 15% of Mintel respondents saying that they are very or somewhat important" to them. Creams production facility boasts of producing fruit sorbets that are delicious, low in fat, gluten free and dairy free. Serving size is important to 69% of survey respondents who buy frozen treats, and especially so among those aged (74%) who are the most likely to eat away from home directly after purchasing it from the grocery or convenience store. Portion control containers also would fare well with those concerned with low-in claims. Ice Cream and Frozen Novelties - July 2014 "While more than half of frozen treat buyers express the importance of product price in their purchase decision, flavor rules. In practice, gelato (with its corresponding higher price point) has driven growth in the category in recent years." Beth Bloom, Food and Drink Analyst This confirms the appeal of ice cream as an indulgence in itself, particularly in its more complex and sophisticated forms, for example in the premium and super premium segments. However, ice cream is also popular as an accompaniment to other desserts, with 39% eating it in this way. This reflects the breadth and versatility of ice cream in its suitability to be served in a number of ways. Speaking of high-quality products, Mintel s August 2013 report says that gelato- an Italian word for ice cream is one particular indulgence that s moving into the mainstream. Not only does it contain less fat and cream than traditional ice cream, but it is also churned at a much slower pace, giving it a denser texture. The Americans and the British love it.

6 OBJECTIVES & STRATEGIES OBJECTIVES Be the leader and consumers brand of choice in the gelato/coffee segment in any chosen market Gain significant share of the QSR (Quick Service Restaurant) gelato/coffee market Deliver returns to our stake holders in the top quartile of the QSR sector STRATEGIES Establish Creams Cafe as the gold standard of gelato/coffee experience Stretch the brand to compatible formats, products and distribution points Grow brand presence through a franchise centric mix of company-owned and franchised stores

7 OUR PRODUCTS

8 FRANCHISING FAQ s What is the cost of investment in a Creams Café store? Typically between 200,000 and 350,000 (excluding VAT). The pricing can be above or below this range and it very much depends on the specific retail shop in question. Is demolition required? Are there electric and water utilities there? Does the premise have an existing air conditioning or fresh air system? The estimate is more specific after a technical drawing is made for the said retail unit. I would like to open a store in a specific area is that possible? We can talk to you about specific areas at a later stage, please indicate on your application form which areas you are most interested in. I have my own premises & would like to open a Creams Cafe there is that OK? We are always on the lookout for appropriate property. One of our acquisitions team will be able to advise you on this. What do I receive for my investment? At the start of the franchise agreement there is an initial fee payable for each unit, this gives you the right to use the Creams Cafe trademark, its system for preparing, marketing and selling food products, its information and other confidential and proprietary information. The package normally includes: All fixtures and fittings, signage, internal signs, estate agents fees, legal fees, marketing fee, project management costs and preopening expenses. How long does it take from applying to opening a store? This depends on whether we have a suitable property available in the chosen area, but typically the timescale is between 2 and 3 Months, on possession of the site keys. How long is the training programme and where is it held? Creams Academy will be responsible for this process and grant a Certificate at the end of the program. The staff and management will receive an intensive 21 day training program. What franchise and royalty fees does Creams Café charge? The franchise fee is VAT for each franchise unit. In addition there is a franchise royalty fee of 5% of the gross sales and a marketing fee of 0.95% of gross sales. Dedicated Franchise Support team and head office staff will assist you with recruiting and training new staff, marketing, product control and other operational areas. Included in the indicative total investment cost there is also some allowance for management and staff training as well as initial marketing support, prior to opening. Most of the start-up costs are comprised of the building fit-out and equipment costs which will vary depending on your site.

9 A RECIPE FOR SUCCESS Is previous catering or retailing experience necessary? It may help, however, due to our comprehensive training and ongoing support, previous experience is not essential. What are the staff numbers and trading hours of an average store? In an average new store 16 jobs are created, split between 40% full-time and 60% part-time. Operating hours are approximately 11am (or earlier, depending on location) until Midnight. What are the chances of success with Creams Café? We have a proven track record in our own stores and the success inspired the owners to invest in their own branches. These investments obviously prove that the owners believe in their own brand as being investible and the returns being attractive. Individual earnings are dependent on many factors, such as the overheads and operating costs of the individual stores. I am interested in developing a market outside of the UK what should I do? Creams has received interest from people wishing to take the brand as a master franchise to the Middle East Dubai, Qatar, Asia, and other European countries. We are keen to expand and the viability of a new country franchise will depend on various factors including previous business acumen in this field with other master franchises. Interested parties would be required to submit to us their interest in writing and we will respond after due consideration.

10 TYPICAL NEW STORE OPENING COSTS NB this is only an example not to be relied on as prices fluctuate. 105,000 (Approx) 73, ,000 (Approx) 123, , ,000 (Approx) 350,000 (Approx) The total cost is based on a typical Creams Cafe store. Additional expenses may be incurred dependent upon location, size and condition of the building. All prices exclude VAT at current rate. No allowance has been made for any property lease premium. All stores are project managed by Creams Cafe until complete. These figures are for guidance only as all stores are sold for an all-inclusive price. This does not constitute an offer or contract and is made without liability to Creams Cafe Ltd. This should not be relied upon in deciding whether or not to invest in a Creams Café franchise.

11 PROPERTY CRITERIA Creams Café is currently looking for property on local high streets, retail parades and neighbourhood centres that fulfil the following criteria: Frontage minimum width 12ft (4.5m) Minimum Area 1500²ft High Visibility for both cars and pedestrians A1 use (A3 preferred) Varied mix of social economical groups within proposed trade area High footfall and traffic Adjacent to supporting traders, i.e. restaurants, entertainment venues, takeaways Car Parking near to premises or good transport links A site can be introduced directly to Creams Cafe Acquisition Team. The relevant Acquisitions Manager will then liaise with you directly as to whether the opportunity is of interest or not. Contact Cream Cafe property team with all the above details, together with the annual rental requirements to property@creamscafe.com

12 COMPREHENSIVE SUPPORT TO FRANCHISEES PRE OPENING Assistance with site selection and design Assistance with business plan Broad pre- and post-opening training Full array of operations manuals Support in identification and set up of supply chain Marketing tools and collateral Store launch campaign PRE-OPENING & ONGOING Field visits and audits Refresher training Operational advice Menu development Marketing support and templates Website development Business guidance Creams Cafe franchise agreement is created by Cubism Law a member of the British Franchise Association (BFA)

13 10 REASONS TO BUY A FRANCHISE FRANCHISE PROSPECTS Advanced large scale production facility and warehousing means our Italian chefs manufacture our own fresh Gelato. In house design and direct buying power of equipment for multiple sites up and down the country means our store fit out costs are the most competitively priced. We cannot be beaten on the cost of fit out and yearly profit compared to any competitor. Always check with us before you even think of another franchise a competitive model can claim to be a cheaper start up with reduced royalty fees, however they may profit through supply chain with extra hidden costs. Creams are not a small family business nor an imitation; we are the original market leaders. Our multiple busy stores means huge bulk buying power and our savings are passed down to you the franchisee. Read below to find out how our franchisees work together as a team 1. Support Network Working for yourself can be a lonely experience. Having a support network of franchisees to advise on problems, share experience and offer tips on how to be successful can make all the difference. 2. Proven System A business model that is proven to work for others can give you the confidence that it can work for you also. By following the systems outlined by your master franchise, you follow in their footsteps and your new business benefits from the experience of an established enterprise. 3. Brand Awareness Operating under a trusted brand gives you a huge advantage over the competition and the best chance of success. Choose your franchise carefully and your customers and suppliers will have faith in you and your business from the very start. 4. Finance Banks are more likely to provide funding for a recognised Franchise Business like ours than a brand new start-up. Multiple franchises can even help you to secure funding. 5. Marketing Most franchises have a pre-defined marketing strategy which, aside from providing you with artwork for adverts, banners, etc. ensures that your small business benefits from the buying power of a larger enterprise and frees you up to focus on making your business a success. 6. Lower Risk Over 90% of UK franchise units are profitable. This shows that starting a franchise business can prove far less risky than a traditional start up business venture. 7. Training A franchise can offer invaluable training on how to drive your business forward, manage your team and teach you new skills to ensure your business in a success. 8. Location It is vitally important to ensure that the location for a business is the right one. A franchise can normally offer help in sourcing suitable premises at the best rates possible; they will also be keen to set you up in a territory where they see an opportunity for your business to succeed. 9. Business in a Box You can literally open up, assemble the parts and get on with the hard work of running your own business. 10. Purchasing Power Whether you re purchasing paper cups or national advertising, the combined bulk buying power of a franchise network can help secure discounts with suppliers. In addition, having a recognised brand name above the door can give you leverage which can lower your business costs significantly. Creams works in legal partnership with Cubism law, located in the heart of Chancery Lane. Creams Franchise finance is also available with our bankers at HSBC franchising.

14 CONTACT AND QUERIES Creams Franchising Ltd Unit 10, Midas Business Centre, Wantz Road Essex, RM10 8PS United Kingdom Contact Franchise Recruitment and Development Team M: +44 (0) E: