News Items

last updated 15/04/2020


Helping franchisees #2 – Cafés & Restaurants

last updated 15/04/2020


In this second case study in our new series looking at how franchisors are helping their franchisees during lockdown, we talk to The Coffee Club

Brad Jacobs of The Coffee Club

The Coffee Club is one of New Zealand’s largest café and restaurant franchises with 66 outlets around New Zealand. Brad Jacobs and business partner Andy Lucas are the master franchisees for New Zealand, having brought the brand here in 2005. Both the franchisor and individual franchisees have won multiple awards.

Brad, The Coffee Club team has a reputation for rolling its sleeves up and getting involved when franchisees need help – I remember the franchisee at Westfield Newmarket telling us how you and Andy were clearing tables and doing the dishes on opening day last year! But lockdown is a totally different challenge.

1. Are your franchisees able to do any part of their normal business at the moment and is any part of their business classed as essential? 

No, we are completely closed while on Level 4 and expect that on re-opening some restrictions will continue to apply for a period of time, especially around the area of physical distancing within the cafés. 

2. How are you supporting the financial well-being of your franchisees through this period? 

We have given franchisees a huge amount of advice and support on how to apply for the wages subsidy, what they need to do, how to pass on the funds to team members, etc.  The process is relatively clean and simple but still a little daunting at the same time. 

The initial reaction of some franchisees was that they expected it would be so hard to apply for the subsidy that they just wouldn’t do it.  When they understood the process was actually very straightforward and not onerous at all, they were quick to complete the application.

Fees

Our franchise fees and marketing levy are based upon a percentage of turnover and, as all the cafés are closed, that means franchisees have no fixed fees and there is nothing for us to waive. There is no income for the franchisor, either - we are all in this together.

Rents

As the head leaseholder for 99 percent of our cafés, this has been a huge area of focus over the last few weeks.  Landlord negotiations are taking a considerable amount of time and effort and we are certainly receiving a range of responses, from excellent through to very tough. At 9 April, we’re very much looking for the NZ Government to now release a Code of Conduct similar to what the Australian Government has done in the last few days setting out how landlords and tenants must work together on this.

Suppliers

We have also been working with major suppliers on payment terms/payment plans, and have emailed every possible supplier we could think of with recurring charges/subscriptions (POS, apps, payroll, music, printers/copiers, leased vehicles, financed equipment, etc) for both ourselves and our franchisees and asked suppliers to assist by pausing/waiving payments.  The response has generally been very supportive.     

Banks

Our major banking partners were very proactive in reaching out to us to offer support for franchisees and a number of discussions are already well advanced.  This has been very helpful, of course.    

3. How are you supporting the personal well-being of your franchisees? What communication systems are you using? 

We’ve been very conscious of using different forms of communication for different reasons.  For example, any ‘formal’ business communication is always going to be by traditional email and generally from a senior member of the team. 

The Business Development Managers and Operations team in particular communicate with franchisees heavily by WhatsApp, WeChat, Facebook or text (depending on the franchisee), and this is much more personal, relaxed and just making sure people themselves are ok. 

The BDM’s all have group chats with their franchisees (generally via WhatsApp) and these chat groups are about keeping the human aspect to it all. 

Of course, we’ve put out information to franchisees and team members about mental health, general well-being and keeping themselves positive during this difficult time, and this has been well received.  It’s very easy to get lost in the world of ‘what needs to be done’ and forget the people side of things. It’s key that people take a moment just to check in with themselves and others as often as they can.   

4. How are you supporting yourself and your head office team in working from home? What are they able to do?

Our Support Office Team are on an 80 percent work week with 80 percent salary topped up by the employer. In return, they are working a 4-day week and are being kept busy with lots of great projects ready for reopening. 

We have regular Skype/Zoom meetings both as a group and as individual teams/departments, and use other tools such as Facebook Messenger and Microsoft Teams.  There has been a great mix of fun, banter, work, support and encouragement across the whole team.  I have been very proud to see how well everyone is responding and supporting each other.

5. What steps are you taking to help franchisees to restart their business once this period ends?

The primary focus of the whole team, but particularly marketing and operations, is currently establishing what we believe reopening could look like at each alert level – what that would mean for operations in store and marketing messages to the public, and how we would implement those various levels across the whole country or region by region. 

There is also the consideration that we may move up and down through the levels for a period of time and that it is likely that different regions will be doing different things at the same time.  As always, it’s about systems, checklists, training documents and attempting to be ready for whatever might come at us!

Thanks for letting us see some of what’s going on behind the scenes, and good luck to The Coffee Club’s franchisees and team for a successful re-opening before too long.

See Helping Franchisees #1 - Home Services here

See Helping Franchisees #3 - Childcare & Education here

More info

Read a summary with links of where to get up-to-date and accurate information about the relief available for businesses.

Franchise Accountants has prepared a resource which outlines how employers treat the Wage Subsidy and related matters. This guide answers a lot of questions and covers off some practical examples and tips. Download your copy of the guide here.

Note: the Franchise Association of New Zealand is hosting a series of 45-minute Virtual Meetings via Zoom for all interested franchisors and/or their staff on the topic Positive Actions Franchisors Are Taking. These are open to non-member franchisors – to be invited, email robyn@franchise.org.nz.

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