THE MULTI-BRAND STRATEGY
The opening of Coffee World at Central Silom in June definitely marked a new chapter for Thailand’s food industry. It is not only the 100th branch of the multi-brand GFA Corporation (Thailand) Ltd, but also located only a few hundred meters away from its original 11-year-old Coffee World outlet on the same street.
Invented by French Fred Mouawad whos the fourth generation of a jewelry family, GFA of Global Franchise Architects first explored India with its Pizza Corner in 1996. A year later, the novice in food industry foresaw the influx American coffee trend into Thailand. Mouawad founded with a colleaque a new coffee brand name, Coffee World – a local coffee chain that offered international flavors and atmosphere. It wasn’t until 2004 that Mouawad abought the shares back from his investors in India and Thailand to become a sole owner of the brand. Since then, GFA never stopped stretching its wings in the food industry. Mouawad recently opened its first Conniza kiosk in Siam Paragon early this month (June).
The company now runs eight brands in Thailand; Coffee World, Pizza Corner, New York Deli, The Cream & Fudge Factory, Conizza, The Donut Baker, Golden Pretzel, and Juisomania; and premium Stone Fire Pizza Kitchen outside Thailand.
Although people are tightening their budget, Mouawad still enjoys strong growth. He doesnt find that the slowing economy has big impact because people are still looking for affordable luxurious products for themselves. “If you are on an average earning, you can’t afford a BMW but you can buy a good coffee.”
The Key to Reach 100
GFA spent more than Bt20 million on the “lucky draw campaign which provides a coupon with free products with every purchase of Bt. 100 or more.” It is one of the company’s biggest ever campaign during its over 10 years in the country. The campaign does not only aim to create awareness on the ‘brand experience’ but also introduce to its customers all the brands in its portfolio.
Multi-brand Strategy
One little secret to huge success for GFA is definitely the multi-brand strategy. To run the multi-brand strategy or a combination store isn’t easy, but GFA has turned the strategy into tangible in their combination store outlets at the airport, Robinson Bangrak, Esplanade, Avenue Pattaya, and many other locations in Thailand.
One size doesn’t fit all; a brand can’t offer everything. However, the multi-brand strategy combines solidarity and creates mutual strength. Once a customer walks into one of the brands, the customer is likely to try other brands run by the mother company. Or while parents are eating their pizza, the children can enjoy the ice cream available in the combination store.
Innovative Thinking
Although GFA is now responsible for nine brands worldwide, the company doesn’t stop their innovations. The R&D team is looking forward to inventing new food creation under a new brand name. “You cant be an expert in everything,” Mouawad explains that is why he has to separate each product under different brand names. Each brand can cater to its own customer group and grow independently, or in combination with other GFA brands.
Franchise System
Franchise system has always been the key to success for GFA. Out of 100 outlets in Thailand, the company now owns 76 of them while 24 are franchised outlets. However, the company aims to adjust its franchise ratio from 75-per-cent corporate owned and 25-per-cent franchise owned to 60:40.
One For All
GFA is the parents and the eight brands are their children. Each child has their own identity but shares the same DNA of quality and good value. Considering a brand manager as a traditional thinking, GFA works with a sole and solid back-up team. The parent company runs and supports every brand. “If we find a location, the team decides which brands to go in and fit the clientele,” explains Mouawad. The team also is responsible for marketing plan, franchising and R&D, with differentiation for each brand.
The Goal
Despite the sluggish economy, GFA did not only enjoy its 24-per-cent growth last year but also recently celebrated its 100th outlet in town. While other companies are pondering more investment thanks to the middle class’s slower spending, GFA doesn’t hesitate a second. The multi-brand company keeps looking for new potential locations. “If we can find 100 locations now, we won’t hesitate,” says Mouawad.
The Thailand-based company now runs eight out of nine brands in the country and has 100 outlets in Thailand alone. The other 105 outlets are in 11 countries including USA, India, China, Indonesia and Bangladesh. Mouawad plans for the same growth rate in 2008, expecting to open 20 outlets this year and to reach its 200th outlet in four-years time. Each outlet needs an investment of between Bt2 and Bt4 million.
Coffee World
Being the leading brand, 76 branches of Coffee World generates 75 per cent revenue for GFA. Although coffee market is reaching its peak, coffee chains are trying hard to find potential locations to expand their outlets. Plus, the recent arrival of McCafe has added more color to the coffee market.
“Each brand has its positioning and strength,” says Mouawad. So does Coffee World. The recent opening of newcomer McCafe, doesn’t affect a market leader like Coffee World. “Our same store sales are growing at eight per cent this year,” says Mouawad. Coffee World also shares the growth rate with the country’s over all freshly brew coffee market.
Being the third place, after home and office, Coffee World continues to offer unique services and products to its customers. While new products have regularly been added to its already wide variety, Coffee World recently beat its rivals with free Wi Fi internet in all branches. Its combination store strategy has more to offer. A customer entering the door of Coffee World has a chance to experience alternative brands by GFA.
While working in Thailand for over a decade, GFA also has been working hard on the international market. GFA has signed up Master Franchisees in Oman and Sudan earlier this year, and is expanding its operations in the USA, India, and the UAE. Its other Master Franchisees in Bangladesh, China, and Indonesia are all growing. “We are growing internationally and are able to attract highly qualified Master Franchisees because partners are recognizing the quality of our brands and the state of the art support structure we offer to assure their success,” says Mouawad.
Franchise Investment (per store)
Number of outlets: 52 stores (franchise 20 stores)
Franchise fees: US$ 20,000
Equipments: US$ 15,000
Construction Furniture and Fixtures: US$ 30,000 to 75,000 depending on size of store
Total investment: US$ 65,000 to 110,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
Pizza Corner
After an overwhelming success in India, founder Mouawad introduced Pizza Corner in Thailand over 2 years ago under the Express format. However, the express model had its own limitation in the market. The founder commented that the local pizza market in Thailand is maturing and competitive. While the dine-in pizza segment is declining, home deliveries seem to be on the rise. Recognizing the challenges in that category, GFA is opening Pizza Corner express models in its combination stores along with other GFA brands. It is not planning on launching any delivery business.
Franchise Investment (per store)
Number of outlets: 5 stores (franchise 2 stores)
Franchise fees: US$ 20,000
Equipments: US$ 12,000
Construction Furniture and Fixtures: US$ 30,000 to 75,000 depending on size of store
Total investment: US$ 62,000 to 107,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
The Cream & Fudge Factory
Launched in 2005, The Cream & Fudge Factory has gone against the healthy diet trend and been the only player in the super premium ice cream market. While all the girls are going for low-fat ice cream, sorbet or light gelato Mouawad doesn’t seem to care. “It’s all about indulgence, flavors and mixing,” says Mouawad smiling. His The Cream & Fudge Factory ice cream has been rich, creamy and flavorful. And the rich quality made out of high quality imported ingredients will always be maintained. “We don’t want to be gelato.”
The Cream & Fudge Factory is one of the GFA leading brands. Being a part of the combination store, the ice cream attracts a large number of customers, particularly in tourism towns like Pattaya and Phuket.
Franchise Investment (per store)
Number of outlets: 8 stores (franchise 1 store)
Franchise fees: US$ 25,000
Equipments: US$ 30,000
Construction Furniture and Fixtures: US$ 40,000 to US$ 75,000 depending on size of store
Total investment: US$ 85,000 to US$120,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
Conizza
Going against the saturated traditional pizza, Conizza or pizza in a cone is a result of GFA’s R&D team. Invented as a Pizza Corner menu in India three years ago, Conizza became a popular choice and arrived in Thailand in June.
The first location chosen for a Conizza kiosk is Siam Paragon thanks to its high-end, trendy and open-minded clientele. The colorful kiosk provides small dining area and offers a wide choice of take-away. Priced between Bt90 and Bt120, the newly launched product targets students and young people as well as tourists. The pizza dough is partly baked and frozen from a central kitchen and the toppings prepared fresh at the store before being put in the pizza cone and baked.
Franchise Investment (per store)
Number of outlets: 1 store (start June 2008)
Franchise fees: US$ 20,000
Equipments: US$ 20,000
Construction Furniture and Fixtures: US$ 20,000 to US$ 25,000 depending on size of store
Total investment: US$ 70,000 to US$115,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
The Donut Baker
Created especially for Indian market, The Donut Baker has finally landed in Thailand at The Esplanade and Abdulrahim Building, HSBC building, ABAC (Huamark) and Chamchuri square. Despite the cut-throat competition, The Donut Baker has won the hearts of donut lovers with its quality, freshness and delicate texture. The secrets are being revealed. Every piece of donut has been baked by only well-trained bakers. And no donuts live longer than eight hours on the shelf.
Franchise Investment (per store)
Number of outlets: 3 stores
Franchise fees: US$ 20,000
Equipments: US$ 8,000 (no kitchen) / US$ 32,000 (with micro kitchen)
Construction Furniture and Fixtures: US$ 40,000 to US$ 75,000 depending on size of store
Total investment: US$ 68,000 to US$ 103,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
New York 5th Avenue Deli
New York 5th Avenue Deli wasn’t invented for any local shopping malls. The high-end products are made especially for expats who miss their original sandwiches, salad, and soups
Positioned in the premium market, the brand is a semi-QSR that offers a friendly atmosphere and a service that combines well with Coffee World, The Cream & Fudge Factory and other GFA brands.
Franchise Investment (per store)
Number of outlets: 6 stores (franchise 1 store)
Franchise fees: US$ 20,000
Equipments: US$ 12,000
Construction Furniture and Fixtures: US$ 30,000 to US$ 75,000 depending on size of store
Total investment: US$ 62,000 to US$ 107,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
Golden Pretzel
From the success from Auntie Ann’s – the only player in the pretzel market, GFA has found more room to sneak into the market. Although it may be too early to tell, the popularity among its customers after the launch of its first Golden Pretzel in Future Park Rangsit last year has shown a bright future for the young child of GFA.
Franchise Investment (per store)
Number of outlets: 1 store
Franchise fees: US$ 20,000
Equipments: US$ 20,000
Construction Furniture and Fixtures: US$ 20,000 to US$ 30,000 depending on size of store
Total investment: US$ 100,000 to US$ 190,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
Juisomania
Once the healthy diet trend spread throughout the world, juices and smoothies became the alternatives, replacing soda and sweetened green tea for many customers especially ladies. The trend allowed dozens of brands of bottled and packaged juices to hit the shelves during the past several years.
However, Mouawad commented that smoothies segment is growing more slowly in Thailand. The brand has only two branches as a part of combination store in The Avenue Pattaya and a kiosk in Crystal Park.
Franchise Investment (per store)
Number of outlets: 2 stores
Franchise fees: US$ 20,000
Equipments: US$ 10,000
Construction Furniture and Fixtures: US$ 12,000 to US$ 25,000 depending on size of store
Total investment: US$ 42,000 to US$ 55,000
Royalty fees: 6% of net sales paid monthly
Marketing fees: 2% of net sales for national marketing / 2% for local store marketing
