The Coffee Club: franchising or start-up?

This fast-expanding high-street franchise cafe chain is turning over $400 million a year across the globe. According to its director John Lazarou, there is a simple secret to their success. 'We want to be in particular countries, focus, grow, turn them into profit centres, get the brand really recognisable and then move on to the next location,' John Lazarou said. For any franchise chain, establishing a brand identity is critically important. The success of the brand will attract not only customers but also new franchisees. The marketing is designed, managed and implemented centrally, and is supported by high quality collateral, marketing tools and ongoing training designed to drive business growth, customer relationship and brand awareness. James Maitland, a Coffee Club franchisee based in Cleveland, Queensland since early 2008 is a qualified accountant who spent the previous 11 years as finance director for a sporting goods wholesale company. James came across The Coffee Club first as a customer then after researching possible business opportunities in the financial press. Next, after having a chat with an existing franchisee in the area, he thought the business opportunities, especially across Australasia, were good. The case explores the pros and cons of a franchise.