-That is, by paying a lump-sum payment, the franchise buyer receives an individual financial model for the chosen location?
-Yes, but I always say to the franchisee several times that this is forward planning. It’s just that franchisees are very often met, who then say: "And you promised us such and such percentages." Firstly, we do not promise, but predict. Secondly, I always try to build calculations from pessimistic forecasts. Better then to be optimistic than to build even according to the average forecast and after a few months to fall into pessimism. Well, and the third - I always emphasize that by the human factor, management, you can kill even the best point on the cross. And with the same management, you can extend the average location to a very good result.
-Okay, you made a prediction, then what?
-Then we are fully opening. This is a design project, construction contractors, furniture makers, manufacturers of advertising structures. All of our trusted suppliers. Moreover, we do not have a task to put a person in a cage and say: you should act only this way and nothing else. We always say that the first point is strongly recommended only with our contractors. They have special prices for our franchisees, they are at least 10 percent below the market. Now, after the first point was rebuilt and understood as it should, the next you can do with your contractors, we do not mind. But the first is better to work with our contractors. Incidentally, we do not make money on this, we give direct contracts to contractors. And we also give suppliers' contacts directly, we do not resell anything through ourselves.
Is the design project included in the lump-sum fee or does the franchisee pay separately for this?
-This falls on investment, is paid separately. The cost of such a project with 3D visualization is now 30 thousand rubles, it does not depend on the area. This is a very good price, as a whole, in the market, prices start at 50 thousand.
- What is the total amount of investment obtained by the franchisee?
-If turnkey, then 1.5-2 million. This includes one month rental deposit, design project, lump-sum payment. Furniture, advertising, first purchases and so on. After the opening period, the franchisee must be assigned a support manager. These are such magical fairies and elves, as I call them. 24 hours a day in touch on any issues. And at one in the morning they drove from the flood, and at six in the morning they put out the fire. And, of course, they solve all standard issues with suppliers,
-That is, you are not engaged in transit trade at all?
- There are a lot of cases on the market when the franchisee accuses the franchisor of earning on supplies at an inflated price: in cups, Pepsi-cola, furniture, croissants. We have left this, we are trying to build open, transparent relationships. All franchisees see direct prices, but we take responsibility for working with suppliers. That is, we ourselves find them, hold tenders, and taste. We push prices because we have a very tight financial model. We even have a plus or minus one ruble affects our financial result in the end.
- So, if the franchisee still wants to work with his supplier. He can offer himself?
-He can offer. If the supplier meets all the criteria, we will first test at several points, and then introduce it to the entire network. That is, we listen to the franchisee for new products, but only if we can introduce it at all points. I personally go to the production of suppliers, because quality and safety are important to us. We have a holy work - to feed people, we carefully check everything. We still have a very important condition for suppliers - to deliver directly to the points. These are fresh products, we do not produce anything, everything is brought to us. If our guests see croissants at 8:00 in the morning, it means that they were baked at 3:00, and at 6:00 the supplier brought them to the coffee shop.
-You managed to update the menu, was this work with suppliers and franchisees?
- This spring for the first time there is a change of position, new items appear. We will have four times updated menu, according to the seasons.
-How do you regulate access to the same inventory base? Does the franchisee ban the establishment of a new counterparty?
-Yes of course. In general, I always separate the front and the back. The front part is suppliers, menus, prices. We have uniform prices everywhere. The menu is a single city, that is, it may vary by region, but in one city it is a single matrix. But the back part - the building and so on - is carried out by the franchisee at his place.
-If the franchisee says that he is not doing business, there is turnover, and there is no net profit - do you go into his financial accounting?
- Honestly, we’re climbing. Not with everyone it is easy and simple, but it is very important for us, since the brand is young. We only get on our feet, we need not just the total number of points, but the number of highly profitable points. In the most extreme cases, when we understand that we made a mistake with the location - unfortunately, and this happens, no one is safe from this - we, of course, close the point, move it to another place. But this is direct in the most extreme cases.
“My barista won't clean!” Something like that?
-Yes Yes Yes. And this is not from the barista itself, but from the franchisee. Well, if you buy a franchise with ready-made, polished rules and recommendations, you must follow them. Classics of the genre: "Because I know better." Or here: "I do not want to sell your high-margin drink, which goes everywhere, because I think it is tasteless." And then questions of margin, profitability of the business pop up. Therefore, now, while we are still young, we can accustom the franchisee to the fact that we climb into the managerial team. This is normal, and we honestly do it. Well, we ask you to provide all the detailed investments for the opening ... Sometimes we grow franchisees in terms of financial literacy. Not everyone can distinguish receivables from payables even. In franchising, 80% comes to those who had no business before. We grow franchisees, set sales plans, and increase the average bill. We ask you to fix where what expenses were, suggest what should be excluded. We cannot take the final management decision for it. Yes, the franchisee may eventually hire a cleaner, but we show on the numbers that if the barista is removed, you can save half a million a year. This argument is usually valid.
-You oblige the franchisee to keep management records, right?
-We highly recommend it. It’s like with any business: if you invest in it, at least by forces, at least financially, you begin to appreciate it. If everyone does it for you, it will always seem to you that they have been doing for a very long time and somehow not like that.
-What rake were you stepping on?
-Oh, last year I was advancing - a constant desire to find a cheap person for the super-tasks. All these hopes that we will solve some of our Napoleonic plans with small resources. I am not saying that this is impossible, but we must understand that there is a triple on this issue: price, quality and time. If we like the price, then either the time that the specialist must spend to grow to a certain level sags, or the quality will suffer, that is, initially the person does not have the necessary parameters, let’s say so. One thing is sagging.
-That is, in a fast-growing business, it is better to take a ready-made specialist who clearly understands what, how, and where to run?
-Yes, but we have grown our own all last year. I'm not saying that this is wrong, you just need to either adjust the plan or look for ready-made professionals.
-Technical question - what are you doing management accounting in 1C?
-Yes, 1C - both for those who are developing their own points, and for those who are developing franchising.
- So you do not have a single management company?
-We have two separate teams, each with 15 people. This was my proposal, because cases are well known when one team deals with its own and franchised points. Own points will always be closer to the body, while franchised ones will always have a lower priority. It's like, excuse me, a booty sitting on two chairs.